• Energy Enterprises

Chinese firms part of winning consortium in Brazil oil bid

SOURCES:xinhua  DATE:2013-10-22 CLICKS:

RIO DE JANEIRO, Oct. 21 (Xinhua) -- Chinese oil firms CNOOC and CNPC joined counterparts Royal Dutch Shell, France's Total and Brazil's state oil giant Petrobras to put in the winning bid at Monday's auction of Brazil's offshore Libra oilfield.

The Chinese firms, China National Offshore Oil Corporation ( CNOOC) and China National Petroleum Corporation (CNPC), have a 10- percent stake each, with Shell and Total taking 20 percent each, and Petrobras the remaining 40 percent share.

Eleven companies had qualified to participate in the auction. However, it was revealed early Monday that Repsol Sinopec would not be taking part in the bidding.

Under the rules of the auction, Petrobras had to participate in any consortium with at least a 30-percent stake, and to operate the field. The rules also called for the Brazilian government to receive a minimum 41.65 percent of the field's output, and that the auction should be decided based on the share of production offered by the consortium to the government.

The Libra oilfield, the first to be auctioned under the new rules, which took years to approve, is estimated to hold eight to 12 billion barrels of recoverable oil, which would practically double Brazil's proven oil reserves.

According to Magda Chambriard, director of the National Petroleum Agency (ANP), Libra's exploration will generate thousands of direct and indirect jobs in Brazil, as well as strengthening the local naval industry and other industrial areas, as supplies will be bought from local companies.

Chambriard believes that at its peak, the Libra field will produce 1.4 million of barrels of oil per day, demanding investments of 100 billion realis (46.1 billion U.S. dollars) over the next decades, as well as two to four drilling platforms and 60 to 90 support ships.

"We have an excellent opportunity to accelerate industrial development, employment and wealth in Brazil," Chambriard said of the oil reserve.

She also noted that public services in Brazil will benefit from Libra's exploration, as congress recently approved a bill proposed by the presidency that calls for 75 percent of the federal government's share of oil royalties be earmarked for public education and 25 percent for healthcare.

The contract between the Brazilian government and the winning consortium is expected to be signed within a month.

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