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11 firms to join huge Brazil oil auction

11 firms to join huge Brazil oil auction

Taking part in the October 21 auction are Japan's Mitsui, ONGC Videsh, Portugal's Petrogal and Malaysia's Petronas.

Rio de Janeiro: Eleven oil firms, including India's ONGC Videsh, paid more than USD 900,000 each to enter an auction next month for rights to explore Brazil's huge deepwater Libra field, authorities said.

International giants such as Britain's BP and BG Group, as well as American firm ExxonMobil chose to stay away, National Petroleum Agency (ANP) chief Magda Chambriard said Thursday.

The list features several titans of the oil industry, including China National Corporation, Anglo-Dutch Shell, Petrobras, France's Total, China National Offshore Oil Corporation and Chinese-Spanish Repsol/Sinopec, an ANP statement said.

Also taking part in the October 21 auction are Japan's Mitsui, ONGC Videsh, Portugal's Petrogal and Malaysia's Petronas.

Chambriard said she had expected about 40 companies to bid for Libra. "Now, there is an international context," she noted.

The enormous Libra oil prospect, found in 2010, marked the largest oil discovery in Brazilian history.

It is believed to hold between eight and 12 billion barrels of recoverable oil, and covers an area of 1,500 square kilometres in ultra deep oil fields.

The auction will be for a 35-year non-renewable concession to work the field.

It will be the first to be held under a 2010 production-sharing law aimed at tightening government control over the huge offshore oil reserves.

That law included "an option for excessive government intervention, with a monopolistic role for Petrobras, a high demand for national content and all this frightens the investor," energy expert Adriano Pires told the G1 news portal.

The sale will be won by the company or consortium that offers the largest share of output to the Brazilian government.

Next month's auction will be the first such sale since the 2007 discovery of huge pre-salt deepwater reserves off southeastern Brazil.

ANP estimates that those reserves, buried beneath several kilometers of ocean, bedrock and hot salt beds, could hold more than 100 billion barrels of high-quality recoverable crude and could turn Brazil into one of the world's top exporters.

Brazil hopes to boost its oil output from around two million barrels a day currently to nearly five million by 2020, largely thanks to the pre-salt reserves.

Petrobras will have a mandatory 30 per cent participation in the Libra concession.

ANP will auction the remaining 70 per cent, in which Petrobras can also participate alone or as part of a consortium with other firms.

first published:September 20, 2013, 19:42 IST