Brazil to auction rights to ‘largest’ oil find

Brazil plans to auction an offshore oil discovery, believed to be its largest ever, later this year. Rights to explore and develop blocks in the Libra field, which is expected […]

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By Priyanka Shrestha

Brazil plans to auction an offshore oil discovery, believed to be its largest ever, later this year.

Rights to explore and develop blocks in the Libra field, which is expected to produce around 12 billion barrels of recoverable oil over 35 years, will be on offer in the first bidding round in October.

Brazil’s national petroleum agency ANP discovered Libra in May 2010 and estimated it holds between 26-42 billion barrels of oil. Of that, production could recover between 8-12 billion barrels or an amount equivalent to three to five months of world oil demand.

The sale, which will be held a month earlier than planned, will be the first under new “production sharing rules” that increase state control and Government participation. The nation’s state-run energy giant Petrobras will own at least 30% of the field and act as the operator.

Winning bids will be determined by the amount of oil companies agree to give to the Brazilian Government from the field, according to reports.

Earlier this month a Brazilian energy firm announced the first discovery of oil offshore Namibia and the ANP granted permission for Chevron to restart production at an offshore oil field in Brazil following a spill two years ago.