Rio deploys troops, navy ships ahead of hotly contested oil field auction
The move to partially sell off Brazil’s most promising oil
reserves has been met with opposition, triggering mass strikes
and disruption to oil production.
A spokesperson from the Brazilian army said that around 1,100
troops are being deployed around the Hotel Windsor in West Rio
where the auction will be staged. Two naval ships will also be
anchored in front of the hotel. Officers will be equipped with
non-lethal weapons and riot armor.
“Intelligence officers and security cameras will be monitoring
the areas around the hotel to warn of possible protest,
guaranteeing the security of the public,” a spokesperson told
Brazilian newspaper O Globo.
Security sources told the news website G1 that the area around
the hotel will be cordoned off during the auction.
The increase in security was ordered by Brazil’s President, Dilma
Rousseff, in the wake of last week’s violent protest again the
oil auction. Moreover, the auction’s organizers fear the event
could be further disrupted by disgruntled oil workers who have
been on strike for the last 4 days.
A group of strikers has camped out next to state-owned oil
company Petrobras, waving placards saying “No to
Furthermore, workers at over 40 oil platforms are striking
against what they view as a step towards privatizing Brazil’s
massive oil wealth. However, analysts say the workers’ strike may
have more to do with a wage dispute.
“The strike . . . has more to do with wage negotiations than opposition to the Libra pre-salt auction itself, even though the latter is important for the more radical elements of the trade unions,” said João Augusto de Castro Neves, an analyst with Eurasia Group to the Financial Times.
The Libra oil field, which is up for auction, is believed to hold
Brazil’s largest pre-salt oil reserves. Current estimates say it
could hold up to 12 billion barrels of crude, attracting over
$180 billion in investment over the next 35 years.
In spite of protests criticizing the Brazilian government for
selling off the nation’s wealth to the highest bidder, officials
maintain that this is not a step towards privatization.
Minister of Mines and Energy Edison Lobao said Brazil was doing
quite the opposite and “exploiting the immense wealth in the
ground under the sea.”
According to the current conditions placed on the auction,
Brazilian state-run oil giant Petrobras will have sole operator
status at the oil field and a minimum of 41.6 per cent of oil
produced will go to the Brazilian state.
“We don’t know how many organizations are going to participate
in this auction. The important thing is that there are
participants,” Lobao told O Globo.
Among the 11 companies expected to take part in the bidding are
some of the world’s oil heavyweights, including the China
National Petroleum Corporation (CNPC), Spain’s Repsol, Colombia's
Ecopetrol and China’s Sinopec.
The US oil giants have shied away from the auction, discouraged
by the conditions imposed on the auction by the Brazilian
The Libra oil field was discovered by Brazil in 2010 and
effectively doubled Brazil’s oil reserves.