Executives from oil industry giants including BP, Royal Dutch Shell and Chevron will meet today in Rio de Janeiro to fight over stakes in Brazilian offshore oil assets.
As the oil price keeps creeping upward, 16 companies will bid for four blocks of Brazil's pre-salt oil clusters located in the Campos basin, on the North coast of Rio de Janeiro, and the Santos basin on the South coast.
What makes the site unique is that beneath a thick salt layer under the sea bed, there are billions of barrels worth of oil, making it a very lucrative offshore investment.
Other participants in the auction includes Spanish oil company Repsol, French Total and US-based ExxonMobil.
Decio Oddone, director of Brazilian oil regulator ANP, said that the pre-salt auction might be the first where all blocks are sold, resulting in a 3.2bn Brazillian Real (£614m) addition to the currently struggling Brazilian government.
Oddone, who did not think the recent government changes in fuel prices would impact the auction, said: “Brazil has a history of respecting contracts and the assets are appealing.”
The state-led oil company Petrobras is expected to take at least 30 per cent of the stakes in all blocks it expresses an interest in prior to the bidding, under current Brazilian rules.
The government led by President Michel Temer decided to lower diesel prices last week after a trucker strike crippled the companies supply routes, leaving some areas of Brazil with shortages of food, fuel and medical supplies.
Also, after increased pressure from striking labourers, the chief executive of Petrobras Pedro Parente was relieved of his role.