November 5, 2019 / 12:43 PM / 16 days ago

Oil unions sue to block crude auctions, minister expects success

RIO DE JANEIRO (Reuters) - Brazilian oil workers’ unions have sued to block two massive deep-water crude tenders due to take place this week, while the country’s mines and energy minister said on Tuesday that the tender would be a big success.

In Wednesday’s auction, known as the transfer-of-rights (TOR) bidding round, companies are expected to pay up to 106.5 billion reais ($26.5 billion) in signing bonuses for fields that Brazil says may hold up to 15 billion barrels of untapped crude.

However, oil workers unions have sought to block the tenders, filing legal actions in federal courts.

In one lawsuit, filed in Brasilia by the FUP union against the Ministry of Environment, Ibama, and the National Agency of Petroleum, Natural Gas and Biofuels (ANP), the workers body decried “the losses of the auction and its environmental impacts.”

“The denationalization of Brazilian oil reserves will have very serious consequences for sovereignty, the economy of states and municipalities and the environment,” the FUP, Brazil’s largest oil workers’ union, said in a statement.

In another lawsuit filed in São Paulo, representatives of seven FUP-affiliated unions challenged the legality of the auctions.

In response, the court gave Brazil’s government 72 hours to comment. According to the federal court’s decision, “simply holding the auction will not cause harm ... On the other hand, its suspension at this time could cause damage, including to the country’s own image.”

In a local TV interview on Tuesday, Mines and Energy Minister Bento Albuquerque was bullish on the auction’s chances of success, saying that Brazil will become one of the top five global oil and gas producers.

“We believe it will be successful,” he said.

Reporting by Roberto Samora, Pedro Fonseca; Editing by Steve Orlofsky

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