Brazilian authorities are likely to grant troubled state oil firm Petrobras between a billion and two billion barrels of oil in a bid to settle a long-running dispute about offshore reserves, according to Reuters citing a Brazilian newspaper source.
Talks about the so-called “transfer of rights” area in a part of the oil-rich pre-salt layer are expected to be resolved soon.
The government ceded the area rights to Petrobras in 2010 but since 2014 both the government and the company have each claimed to be owed billions of dollars based on contested readings of a complex contract.
Petrobras also contests estimates made by Brazil’s oil regulator ANP of the quantity of reserves in the area.
After the dispute is settled the government says it will hold an oil and gas auction later this year for leftover parts of the area.
And, in a separate development, the UK government has agreed to loan Petrobras nearly $300m to help the company finance the supply of oil and gas equipment plus services from Baker Hughes, a GE Company (BHGE).