Brazil, South America's second-largest oil producer behind OPEC member Venezuela, announced on Monday that it will hold auctions later this year for rights to develop massive offshore oilfields, including some of the country's much-heralded presalt fields. The first auction could be held in the latter half of 2011 after royalty charges and how those would be distributed are hammered out by the government.
Auctions are expected to include part of the Libra field, which is believed to be the largest oil discovery in the Americas in over 30 years. Estimates vary widely on how much oil is in Libra with the number ranging from 3.7 billion to 15 billion barrels. Even with an auction, Brazil's government is likely to maintain majority ownership of Libra.
Brazil's oil regulator, ANP, said last month the auction may include areas in the equatorial margin region, which runs from Bahia in northeast Brazil to Amazonas in Brazil's far north and include shallow water and deep water blocks, but would not include presalt blocks, Dow Jones reported.
Petrobras (PBR), Brazil's state-run oil producer, typically wins most of the highly sought after Brazilian development contracts, but Royal Dutch Shell (RDS-A) and BP (BP), Europe's two biggest oil companies, are among the global oil giants looking to bolster their footprints in Brazil.