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BP and Total win exploration rights in virgin waters of Brazil’s Amazon basin

Wednesday, May 15th 2013 - 06:50 UTC
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Energy Minister Edison Lobao said sale of exploration rights beating government’s expectations Energy Minister Edison Lobao said sale of exploration rights beating government’s expectations

BP and Total, Europe’s biggest oil companies after Shell, won exploration rights in the Amazon basin as Brazil’s first oil auction in five years attracts a record level of bids. Total, based in Paris, gained exploration access to operate five blocks at the Foz do Amazonas basin in northern Brazil together with partners BP and Petrobras, the oil regulator said on Tuesday.

London-based BP won an additional license to operate a block at the same basin in partnership with Petrobras,

Brazil, home to the largest crude discovery in the Americas in more than 30 years, is holding its first oil exploration round since 2008, attracting more than 60 prospective bidders for a total of 289 blocks in 11 basins. The country is set to break the 1.1 billion record in auctioning licenses, according to Joao Carlos de Luca, the head of the Brazilian Oil Institute.

BP and Total agreed to pay 621.5 million Reais (310 million dollars) for the offshore Amazon basin concessions. BHP Billiton won bidding for two blocks in the same basin, the Melbourne-based mining company’s first oil assets in Brazil.

OGX Petroleo & Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, Colombia’s Ecopetrol and Queiroz Galvao Oleo & Gas SA also won licenses to operate blocks at the Foz do Amazonas basin.

Tuesday’s sale of exploration rights is beating the government’s expectations, Mines and Energy Minister Edison Lobao told reporters at the event, which gathered about 700 executives and officials. The Foz do Amazonas basin has attracted the most interest from participants, Magda Chambriard, head of oil regulator National Petroleum Agency, said.

“So far we are satisfied and happy,” Guillermo Quintero, CEO of BP’s Brazil unit, said during an interview at the event, held in a Rio de Janeiro hotel. “This isn’t over yet”.

Most of the areas up for auction on Tuesday and Wednesday are in virgin waters off the coast of north-eastern Brazil where discoveries in similar geology across the Atlantic in Ghana and Ivory Coast yielded major discoveries. Tullow Oil Plc in 2011 sparked interest in the region with the Zaedyus find off the coast of French Guiana.

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