Brazil's Rousseff rules out pre-salt auction, citing low oil prices

Sao Paulo, Jan 15 (EFE).- President Dilma Rousseff said Friday that due to the sharp drop in global oil prices Brazil had no short-term plans to auction off any blocks in its highly promising pre-salt region.

"No one holds an auction for an exploration block with the barrel below $30 unless you want to give it to someone," Rousseff said in a breakfast in Brasilia with members of the media.

The pre-salt region, so-named because its reserves - estimated at tens of billions of barrels of crude equivalent - are located under water, rocks and a shifting layer of salt at depths of up to 7,000 meters (22,950 feet) below the surface of the Atlantic, lies off the southeastern coast of Brazil.

The per-barrel price of Brent crude, the global benchmark, fell below $30 on Friday for the first time since March 2004 due to investors' uncertainty about the Chinese economy and a supply glut.

The Brazilian government, however, is considering awarding concessions for smaller areas, including onshore blocks, that are "less profitable," Rousseff said.

The drop in oil prices and the end to the commodity boom have not only affected Brazil - and state oil company Petrobras in particular - but all international markets as well, the president said.

Rousseff said her government was not ruling out injecting fresh funds into Petrobras, but stressed that despite the adverse scenario Brazil's largest company was strong enough to stand on its own, citing its ability to produce oil at low cost and adapt to the current circumstances.

"Petrobras has reduced investment, not because it wants to but because it can't survive otherwise," she said.

The company, which has been embroiled in recent months in a massive corruption scandal, recently announced a 24.6 percent reduction in its investment target for the 2015-2019 period and also cut its production target for 2016 by 1.8 percent.