CNOOC, CNPC win Brazil oilfield bid

RIO DE JANEIRO -- The Brazilian government on Monday described the initial auction of its offshore Libra oilfield, in which five international firms jointly won a 35-year concession to explore and exploit the massive reserve, as a "total success."

Despite the fact that the five-member consortium, consisting of two Chinese firms, Royal Dutch Shell, France's Total and Brazil's state oil giant Petrobras, put in the only bid of the auction, the head of the National Oil Agency (ANP) said she was pleased with the outcome.

"There was competition and the outcome could not have been better," ANP Director General Magda Chambriard told reporters.

11 oil firms originally paid a fee for the right to place a bid in the auction of the largest oilfield discovered in Brazil to date.

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

Chambriard underscored the importance of the companies in the winning consortium, saying they included the most profitable oil firms in the world. "A bigger success is hard to imagine," she said.

Opponents of the government say the auction failed to attract more bids from international oil firms due to new regulations that stipulated Petrobras had to participate in any consortium with at least a 30-percent stake, and to operate the field. In addition, the government must receive a minimum of 41.65 percent of output after initial investment costs are covered.

However, Mines and Energy Minister Edison Lobao dismissed the criticism, saying the winning consortium agreed to the 41.65-percent minimum in output, as well as to paying the government 15 billion reals ($6.9 billion) for rights to the field.

The Libra oilfield, the first to be auctioned under the new government rules, is estimated to hold up to 12 billion barrels of recoverable oil, practically double Brazil's proven oil reserves.