RIO DE JANEIRO--Asian national oil companies lead the list of 11
potential bidders for Brazil's largest oil discoveries, the
country's National Petroleum Agency, or ANP, said late
China's CNOOC Ltd. (CEO), China National Petroleum Corp., and
China Petroleum & Chemical Corp. (600028.SH), also known as
Sinopec, were among the firms that paid a 2.1 million Brazilian
reais ($953,678) fee to register to participate in the auction,
which is scheduled for Oct. 21.
Sinopec will participate via its Repsol Sinopec joint venture
with Spain's Repsol YPF (REP.MC). Malaysia's Petroliam Nasional
Bhd, or Petronas, and India's ONGC Videsh also registered to bid,
the ANP said.
Brazil sent several government officials to China over the past
few weeks to drum up interest in the auction of Libra, which is
estimated to hold between 8 billion and 12 billion barrels of
recoverable crude oil. ANP Director Magda Chambriard went to
Beijing earlier this month to present details of the auction, and
Maria das Gracas Foster--the chief executive of state-run energy
giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras--visited
China in late August.
The sale was expected to draw significant interest from
state-run entities from Asian countries hungry for resources, but
some of the world's largest oil majors opted not to participate.
Chevron Corp. (CVX), Exxon Mobil (XOM), BP Plc (BP) and BG Group
(BG.LN) all opted not to participate, indicating that the oil
industry remained concerned about high costs and potential returns
from the project despite its massive potential.
The ANP has estimated that it could take as much as 400 billion
Brazilian reais ($177 billion) to develop Libra over the 35-year
life of the concession contract.
The price tag was not enough to scare off Royal Dutch Shell
(RDSA.LN), France's Total SA (TOT), Portugal's Galp Energia
(GALP.LB) and Colombia's Ecopetrol (EC), which all already have
exploration acreage in Brazil. Japanese trading house Mitsui &
Co. (MITSY) also registered, the ANP said. Petrobras also
registered, indicating that it could potentially seek more than the
30% stake in Libra the company is guaranteed under new
Companies still need to receive technical qualifications to
participate in the auction, the ANP said. In addition, paying the
registration fee does not guarantee that a company will bid.
Shell said that it was still evaluating whether to make a bid.
"We have submitted our qualification information and participation
fee to ANP, which ensures that Shell is approved to participate in
the bid round should we choose to do so," the company said in a
Libra is one of the so-called presalt oil fields discovered off
Brazil's southeast coast. The oil deposits were found buried in
waters 2,000 meters deep and a further 5,000 meters below the
seabed under sand rocks and a thick layer of salt--hence presalt.
The oil fields could make Brazil one of the world's top-10 oil
The auction will be the first under new rules draw up by the
Brazilian government that place development and profits under
greater state control. Winning bids will be determined by the
amount of profit oil, or oil produced after development costs, that
companies agree to give the Brazilian government. The winners will
have to pay a signing bonus of BRL15 billion and partner with
Petrobras, which will have a 30% stake in the field and be the
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