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Brazil auctions giant pre-salt discovery

10th September 2013

ANP auctions largest oil discovery in almost 40 years in first pre-salt round

Brazil auctions giant pre-salt discovery
Libra holds an estimated volume of 8-12 billion barrels of oil

Brazil’s national oil and gas regulator has confirmed it will hold the country’s first pre-salt auction next month to sell the country’s largest oil find in nearly four decades.

 

The ANP will auction the Libra field on 21 October. The field is part of the pre-salt oil deposits discovered off Brazil’s southeast coast and is located in the Santos Basin, offshore São Paulo.

 

Libra lies under 2,000 km of water and a further 5,000 km of sand, rock and salt, holding an estimated volume of 8-12 billion barrels of oil. According to US-based IHS, the field will cost around USD 174bn to develop.

 

The area to be auctioned is approximately 1,500 sq km. The winning bidders must develop exploration activities for a period of at least four years.

 

The ANP and its director Magda Chambriard toured Singapore, London, Houston, Tokyo and Beijing during the weekend to promote the auction and present geological and geophysical data about the field.

 

Chambriard told foreign investors Libra is a “unique opportunity in the world”. According to the ANP boss, Libra’s potential surpasses that of Brazil’s major fields combined.

 

The company that wins the auction will have to pay approximately USD 6.6bn in signing bonus to the state of São Paulo, in addition to a participation fee of USD 900m to the ANP.

 

State-owned Petrobras will operate Libra and hold at least a 30 per cent stake in field, as part of new rules set up by the Brazilian government which place greater state control over development and production.

 

 

The signing of the production sharing contract for Libra is expected to take place in November.