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Brazil oil auction raises a record $1.4 billion

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Staff writer ▼ | May 16, 2013
Brazil oil gasBrazil's first auction for oil and gas rights in five years raised a record $1.4 billion (2.82 billion reais). The auction had been scheduled to last for two days but all was over at the end of the first day.

Bidders offered a total amount that broke a record 2.1 billion reais in 2007. Offers for the most sought-after blocks were as much as 40 times the minimum values set for the sale. Bidders also committed to investments in the fields of about 7 billion reais.

OGX Petroleo e Gas SA was among the most aggressive bidders. Companies including BG Group, Total, and Galp Energia SGPS also bought multiple blocks.

"Companies would really like to expand their role in the country, including ourselves,” said Thore Kristiansen, president of the Brazil unit of Norway's Statoil ASA, one of the participants.

"We never saw anything like this," said Marco Antonio Martins Almeida, Brazil's oil secretary.

The auction started with the sale of onshore blocks in the northeastern Parnaiba basin, followed by offshore blocks in the Foz do Amazonas basin, and in the Barreirinhas basin.

Petrobras, Galp and OGX won early onshore blocks. OGX secured rights to at least 13 blocks, onshore and off, through bids totaling about 375 million reais.

Total and BP Group were among the successful bidders for the offshore Amazon blocks. Other successful bidders are Statoil, Chevron, Exxon Mobil and BHP Billiton who stepped in Brazilian oil for the first time.

On offer were rights to 289 onshore and offshore exploration and production blocks that add up to an area of about 150,000 square kilometers (60,000 square miles). The blocks are estimated to contain at least 35 billion barrels of oil, about a year's worth of global crude oil demand.

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