Eleven firms to join huge Brazil oil auction

Eleven firms to join huge Brazil oil auction

RIO DE JANEIRO - Eleven oil firms paid more than $900,000 (S$112,0000) each to enter an auction next month for rights to explore Brazil's huge deepwater Libra field, authorities said Thursday. International giants such as Britain's BP and BG Group, as well as American firm ExxonMobil chose to stay away, according to National Petroleum Agency (ANP) chief Magda Chambriard.

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, India's 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 kilometers (600 square miles) 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.

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