Brazil prepares for second open license auction

As the registration period for Brazil's second open exploration licensing round drew to a close on May 5, the round was expected to be a bigger success than the National Petroleum Agency's (ANP) first licensing round, conducted last year. Forty-eight companies have registered to participate in the latest license auction, seven of them Brazilian.


RIO DE JANEIRO�As the registration period for Brazil's second open exploration licensing round drew to a close on May 5, the round was expected to be a bigger success than the National Petroleum Agency's (ANP) first licensing round, conducted last year.

Forty-eight companies have registered to participate in the latest license auction, seven of them Brazilian. Only one Brazilian company, Petroleo Brasileiro SA, participated in last June's first-round auction (OGJ, June 28, 1999, p. 31).

ANP Executive Director David Zylbersztajn says competition in this year's licensing round will be far superior to last year's round, due to higher oil prices and better capitalized companies. The auction of 23 exploration and production licenses is to take place June 7.

For the second auction, all but one registered company paid the auction participation fee. Entry fees for all participants totaled $8.62 million.

The firms have until May 26 to make deposits ranging from $100,000 to $500,000 for each block they intend to vie for, depending on the block's characteristics. Interested companies can negotiate financing of future investments with Brazil's National Economic Social Development Bank (BNDES).

BNDES subsidiary BNDESPar will be able to participate in the auction as a consortium member, said Zylbersztajn.

ANP will tender 23 blocks, of which 13 are offshore and 10 onshore. Four blocks are in Campos basin, off Rio de Janeiro state, and the other blocks are in the following basins: Amazonas (1), Camamu-Almada (1), Paran�1), Para-Maranhao (1), Potiguar (2), Reconcavo (3), and Sergipe-Alagoas (5).

Participating companies
Eighteen US oil companies registered for the auction, compared with 19 last year, while 11 European firms registered�the same number as last year. Four Latin American companies will participate in ANP's second open auction.

The following registered companies have authorized ANP to publicize their names: Enterprise Oil do Brasil, a subsidiary of UK firm Enterprise Oil PLC; Canadian Hunter Exploration Ltd., Calgary; Germany's Wintershall AG; and Brazil's Queiroz Galvao Perfuracoes.

Jose Augusto Fernando Filho, Queiroz Galvao exploration director, said that his company is part of a consortium of four firms but added that this number can be expanded. He said Queiroz Galvao is mainly interested in onshore and shallow-water blocks.

ANP authorized the following companies to conduct 3D seismic:

� Pege�e Exploracao Petrolifera Ltda., in a 8,500 sq km area in Campos and Espirito Santo basins and a 9,000 sq km area in Santos basin.

� GECO AS, to conduct gravity and magnetic surveys in a 14,500 sq km area in Campos basin and a 3,500 sq km area in Santos basin.

� CGG do Brasil Participacoes Ltda., to conduct gravity surveys in a 10,500 sq km area in Campos and Espirito Santo basins.

� Baker Hughes do Brasil, to conduct 3D spec surveys in a 19,011 sq km area in Santos basin.

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