Brazil's Congress helps clear way for huge oil auction in November

BRASILIA (Reuters) - Brazil’s Congress on Thursday approved a section of a bill concerning a massive oil auction in November that lawmakers say will allow the process to be carried out despite lingering disagreements between lawmakers.

The approved legislation concerns the sharing between states and municipalities of the proceeds resulting from the auction. While Brazil’s lower house and senate still disagree over aspects of how the proceeds will be shared, Thursday’s move allows the aspects they agree on to become law.

Negotiations over the remaining aspects of the agreement, known as the PEC, continue in the lower house.

The so-called transfer-of-rights auction, scheduled for Nov. 7, will give major international oil companies the opportunity to bid for production rights in offshore pre-salt areas that hold billions of barrels of oil. As state-run oil firm Petroleo Brasileiro SA has already done significant exploration work in the area, it is expected to fetch a significant premium.

The government has said it expects to bring around 106 billion reais ($25.5 billion) into public coffers via the auction.

Brazil-listed preferred shares in Petrobras, as the firm is known, were up 0.1% on Thursday afternoon, slightly underperforming Brazil’s benchmark Bovespa index, which was up 0.4%.

Reporting by Maria Carolina Marcello; Writing by Gram Slattery; Editing by Dan Grebler