The Brazilian Congress on Thursday (26) passed part of a constitutional amendment bill authorizing the government to hold a mega-auction for the concession of pre-salt oil exploration areas early in November.

The move comes following a deal forged yesterday between Senate President Davi Alcolumbre, lower house speaker Rodrigo Maia, and Economy Minister Paulo Guedes. The agreement aimed to pass items already approved by lawmakers from both congressional houses. “The passing of this measure is key to the development of Brazil,” said Senator Alcolumbre, who presided over the hearing.

An appealing offer

This is widely hailed as one of the most attractive auctions of the last few years. The government expects to gain some $25 billion in signing bonuses. Of this total, $8 billion will go towards compensating Petrobras and $17 billion to be distributed among the federal, state, and municipal governments. No consensus has been reached as to how this distribution will be conducted.

Under the deal, the federal government agrees to give three percent of its 70 percent share of the $25 billion to producing states—in this case, Rio de Janeiro, where the blocks to be explored are located. The federal government holds 67 percent, municipalities 15 percent, and states 15 percent, with Rio de Janeiro earning an extra three percent.

“For Rio de Janeiro, the additional three percent is crucial funding for address the state’s current fiscal situation. It’ll come as another breathing space,” said Senator Flávio Bolsonaro, who represents the state.