Brazil plans to increase the volume of biodiesel blended with diesel sold at the pump to 10% from March 1, 2018, about a year ahead of originally expected, as the government works to lift the country's biofuels output, reduce oil-product imports and meet requirements under the Paris Accords.
"The decision to increase the biodiesel mixture has already been taken, but it hasn't yet been formalized," Marcio Felix, the oil and natural gas secretary at Brazil's Mines and Energy Ministry, told reporters on the sidelines of an industry event late Friday.
"By December, at the latest, it will be completed," Felix said.
Brazil's National Energy Policy Council will also have to approve the increase. The CNPE's approval will likely happen at its regularly scheduled meeting in December, Felix said, although a special meeting could be held before then if needed.
Brazil expects to announce the early increase to the biodiesel-diesel blend in coming weeks along with details about RenovaBio, a government package of incentives and regulatory measures aimed at opening Brazil's biofuels segment to greater competition, attracting investments and increasing output and consumption of biofuels such as biodiesel and sugarcane-based ethanol.
According to Felix, the government of President Michel Temer is deciding the best course to implement the new rules.
RenovaBio could be launched as a presidential decree or a bill, Felix said. Presidential decrees are typically quicker to implement and need less input from Brazil's Congress, but a flurry of the measures are already winding their way through the halls of government and clogging up the pipeline.
The current delays may make a bill submitted under rules ensuring urgent consideration by Congress quicker to get implemented, Felix said.
Each 1% increase in the biodiesel-diesel blend, which was increased to 8% on March 1, 2017, accounts for about 600 million liters of biodiesel production and consumption, according to several industry trade groups.
The increased biodiesel use also directly reduces the volume of diesel imports also needed to meet domestic demand for the fuel.
Brazil had previously planned to increase the biodiesel-diesel blend to 9% on March 1, 2018.
TRANSFER OF RIGHTS TALKS
The government and state-led oil company Petrobras also remain in tough negotiations to hammer out the final oil price for the so-called transfer of rights area.
Petrobras obtained the right to produce 5 billion barrels of crude from subsalt acreage next to producing fields in exchange for shares given to the government.
While Petrobras paid about $8.51/b for the oil in 2010, the contract called for a review of the price after the fields were declared commercially viable for development. Given the sharp slide in international oil prices since 2010, Petrobras was expected to be a creditor in the new calculation.
The talks need to be concluded by the end of 2017 in order for the government to auction off production from the fields exceeding 5 billion barrels in the first half of 2018, Felix said.
Brazilians go to the polls to elect a new president in October 2018, meaning all public tenders such as auctions of oil and gas exploration and production concessions, must be completed by May, according to Felix.
Brazil plans to hold three auctions next year: Brazil's 15th bid round, the country's fourth subsalt acreage sale under production-sharing agreements and the fifth sale of inactive fields holding marginal accumulations of oil and gas. A similar three-auction slate is already scheduled for 2019.
A total of 32 international and national oil companies were approved to participate in Brazil's 14th bid round, scheduled for September 27.
A total of 17 separate oil companies also applied to participate in Brazil's second and third sales of subsalt acreage under production-sharing agreements, Felix said, although he declined to offer any details on companies.
Brazil's National Petroleum Agency (ANP) said last week it was evaluating applications from 10 companies for the second bid round and 15 companies for the third bid round.
The second bid round will feature the unitized portion of four subsalt discoveries that extend beyond the borders of existing concessions, including Carcara, Gato do Mato, Sapinhoa and Tartaruga Verde.
The third subsalt round will feature the Pau Brasil, Peroba, Alto de Cabo Frio Central and Alto de Cabo Frio Oeste prospects.
