The Petrobras-government tussle

A deal between the state-run firm and the Brazilian government could lead to a mega bidding round

Brazil has billions of barrels of oil it has to figure out what to do with. The government and state-owned Petrobras are locked in negotiations over the fate of as much as 15bn barrels of crude in the so-called "Transfer of Rights" (Cessão Onerosa in Portuguese) area, a cluster of fields in the pre-salt. In 2010, when the government was embarking on a record-breaking sale of shares in Petrobras, it struck an agreement with the state oil company in which Petrobras paid for the right to develop and produce up to 5bn barrels of oil equivalent from the fields. At the time the agreement was signed, the price paid for such reserves was $42.5bn, around $8.50 per undeveloped barrel of oil. However,