Brazil licenses 21 of 23 blocks in second open bid round

In Brazil's second licensing round, held in Rio de Janeiro today, 44 companies competed for 23 blocks�10 onshore and 13 offshore�in nine Brazilian sedimentary basins. All but two blocks received bids in the round.


RIO DE JANEIRO�In Brazil's second licensing round, held in Rio de Janeiro today, 44 companies competed for 23 blocks�10 onshore and 13 offshore�in nine Brazilian sedimentary basins. All but two blocks received bids in the round.

A consortium of Santa Fe Snyder Corp. (operator, 45%), SK Corp. (40%), and Brazil's Construtora Norberto Odebrecht SA (15%) bid 12.025 million real ($6.68 million) for Block BM-C-8 in the Campos basin. Maersk Olie og Gas AS was the only other bidder for the block. Although Maersk offered more�about 13.4 million real�it lost the bid because it offered local suppliers only 10% of the exploration-related contracts and 15% of the development contracts, while the Santa Fe Snyder consortium offered 35% of the exploration contracts and 40% of the development work to local suppliers.

Block BM-C-7, also in the Campos basin off Rio de Janeiro state, received a single offer of about 4.69 million real from PanCanadian Petroleum Ltd. of Canada.

Shell bid alone for Campos basin Block BM-C-10. It offered 65.16 million real, easily defeating two consortia led by Chevron Corp. and Petroleo Brasileiro SA, respectively, and PanCanadian bidding alone.

Block BM-CAL-4, in the shallow waters of the Camamu-Almada basin off Bahia state, received only one offer�a 2.21 million real bid by Coastal Corp. The agreement calls for $2-5 million in investments over the first phase, expected to last 3-4 years.

Block BM-SEAL-5 off Alagoas state in the Sergipe-Alagoas basin received bids from two consortia. The winning group was Amerada Hess Ltda. (operator, 85%) and Odebrecht (15%), with a 9 million real bid.

Union Pacific Resources Co. won BT-SEAL-1 in the Sergipe-Alagoas basin by bidding 902,374 real. It defeated the only other bidder, Rainier Engineering Ltd. Maritima, which offered 101,000 real.

Rainier was the only bidder for the 957-sq-km BT-SEAL-3 Block, also in the Sergipe-Alagoas basin, offering 105,666 real. And it defeated three other bidders with its offer of 1.052 million real to win Block BT-POT-3 in the Potiguar basin in the northeast part of the country.

Rainier was again triumphant with a bid of 851,666 real for BT-REC-2 in the Rec�ncavo basin. Sun Resources NL was the only other bidder, at 175,000 real.

Block BT-REC-3 in the Rec�ncavo basin in Bahia state also received a single bid�151,555 real by Rainier, a Brazilian company�as did BT-REC-1, which was won by a consortium of Queiroz Galv�(60%) and Ipiranga (40%) with a bid of 2.22 million real.

Coastal Corp. was the only bidder for the 5,071 sq km BT-PR-4 Block in the Paran�asin in southern Brazil. It bid 4.68 million real.

Coastal (operator, 50%) and PanCanadian (50%) bid 9.23 million real for BM-PAMA-1 in the Par�aranh�basin off northern Brazil. The group easily outbid Queiroz Galv� which offered 1.11 million real.

Petrobras participation
Petrobras submitted, either alone or as part of a group, submitted eight winning bids in the National Petroleum Agency's second licensing round. It will serve as operator on seven of the blocks.

A consortium of Petrobras (operator, 50%), Chevron (25%), and BG International Ltd. (25%) won Block BM-S-10, a 3,780 sq km area in the offshore Santos basin, with a bid of almost 102 million real. BM-S-10 was the first block to be auctioned in the round, and three consortia, all with heavy foreign participation, bid for it. The concession is valid for 36 years and may be extended if the block continues producing.

A combine of Chevron (operator, 65%) and Petrobras (35%) teamed up to bid for BM-S-7 in the Santos basin. They agreed to pay 67.6 million real. Other bidders for this block were Wintershall AG, BG, a consortium of Kerr-McGee Corp. and PanCanadian, and Shell.

A group comprising Petrobras (operator, 45%), BG (30%), and Repsol-YPF SA (25%), offered 116.3 million real for Santos basin Block BM-S-9. Amerada Hess bid 46.8 million and PanCanadian 1.81 million for the same block.

A consortium of Petrobras (operator, 50%), Royal Dutch/Shell Group (40%), and Portuguese state oil company Petrogal (10%) bid 51.45 million real for the 4,864-sq-km BM-S-8, also in the Santos. And a group comprising Petrobras (operator, 65%), BG (25%), and Petrogal (10%) was the only bidder for BM-S-11 in the same basin, offering about 15.16 million real.

Petrobras (operator, 60%) and Amerada Hess (40%) bid 2.36 million real for BM-SEAL-4 in the Sergipe-Alagoas basin off Brazil. They were the only bidders for the block. And Petrobras made the highest of three bids for the 1,040 sq km BT-SEAL-2 Block in the Sergipe-Alagoas in northeastern Brazil, at 432,325 real.

The Brazilian state firm bid alone for Block PT-POT-4 in the Potiguar basin in the north of the country. Two other groups bid for this block but fell well short of Petrobras's 658,789-real bid.

There were no bids on Block BT-AM-1 in the Amazonas basin or Block BM-C-9 in the Campos basin.

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