By Bruno Lourenco and Paulo Trevisani
BRASILIA--Brazil's sale of one of the world's largest offshore
oil discoveries will feature two or three groups of bidders,
despite the absence of some major private-sector oil companies
among the candidates, the country's energy minister said
Friday.
"We are aiming at a successful auction on October 21 and we will
have that," Energy Minister Edison Lobao told reporters. The
government hasn't heard from U.S. oil giants Exxon Mobil Corp.
(XOM) and Chevron Corp. (CVX) about why they didn't register for
the auction, Mr. Lobao said.
Brazil will sell off rights to develop the Libra field, which is
estimated to hold between eight billion and 12 billion barrels of
recoverable crude oil. Brazil's government plans to use royalties
and its share of oil from the field to fund investments in health
care and education.
"This will be one of the most important auctions ever in the oil
industry," Mr. Lobao said.
The auction will be the first under new production-sharing
rules, which give the government a greater say in development of
the oil fields trapped thousands of meters under a thick layer of
salt beneath the Atlantic Ocean. Brazilian state-run oil company
Petroleo Brasileiro SA (PBR, PETR3.BR, PETR4.BR), or Petrobras,
also will operate the field and hold a mandatory 30% stake.
Mr. Lobao said the government is not considering reducing
Petrobras's obligation to hold a 30% stake in the field. "There is
only the possibility that it will increase if the company wants to
be part of a consortium," Mr. Lobao said.
Potential bidders for Libra include Royal Dutch Shell PLC (RDSA,
RDSA.LN), France's Total SA (TOT, FP.FR) and Portugal's Galp
Energia SGPS SA (GALP.LB), but the list is dominated by Asian
state-run firms such China's CNOOC Ltd. (CEO, 0883.HK), China
National Petroleum Corp. and China Petroleum & Chemical Corp.
(SNP, 0386.HK, 6200028.SH), also known as Sinopec. Sinopec will
participate via its joint venture with Spain's Repsol SA
(REP.MC).
--Jeff Fick contributed to this article.
Write to Bruno Lourenco and Paulo Trevisani at
brazil@dowjones.com
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