The state-controlled oil company has had a good first quarter as fuel price increases and spending cuts help improve its margins. 

A Brazil Confidential survey signals growing optimism in in the oil and gas sector as the country prepares to hold its first oil auctions in more than four years.

Our survey has shown a sharp fall in confidence among the low-income consumers whose optimism has been a central feature of Brazil’s success in recent years. Growing anxieties about inflation may be one of the reasons.

Bears still worry about the link between Vale and uncertainty surrounding future demand for iron ore, but a growing number of bulls can see a positive side to the story.

Farmers are unlikely to reap the rewards of a huge harvest this year due to higher logistics and production costs and falling commodity prices.

71 companies have applied to bid in Brazil’s first oil auction for five years, according to ANP, the industry regulator. The interest confirms our view that the auction of oil exploration and production rights will lure significant overseas interest (BC Mar 28 2013, Resources).

The company will seek offshore assets in the equatorial margin in the 11^th round and “would be happy” with a partnership with Petrobras.

Part of the Queiroz Galvão group, QGEP is likely to bid aggressively in the 11^th round, and may also acquire Petrobras assets.