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* BG Group, OGX, Total, BP among big winners at Brazilauction
* Sale comes after years of sluggish oil growth, rising debt
* Last auction held in 2008, after which oil interest waned
* U.S., European companies rush in, but Asian rivals wary
By Jeb Blount
RIO DE JANEIRO, May 15 (Reuters) - For the first time innearly five years, Brazil's flagging oil industry has received ajolt of serious interest from private investors.
Brazil's oil agency, the ANP, sold 142 exploration areas to39 companies from 12 countries on Tuesday, wrapping up thescheduled two-day auction in just one day. It was the firstauction since a decade of annual sales ended in 2008.
Winners agreed to pay a record 2.82 billion reais ($1.4billion) in cash for the rights and committed to invest about 7billion reais over about five years in exploration, the ANPsaid. Most of the areas are in high-risk frontier regions withlittle or no oil output.
Brazil has failed to lived up to is promise as a major newproducer as increased government intervention and a newregulatory model discouraged foreign and domestic privateinvestors. Oil production has stagnated in recent years andimports have risen.
But analysts said the results of the auction showed Brazilwas simply too big an opportunity to ignore.
"Sure, Brazil messed up, but the auction puts things inperspective," said Cleveland Jones, an oil geologist andmathematician with the Brazilian Petroleum Institute at Rio deJaneiro-State University. "Brazil has huge potential and is amuch less risky place than Nigeria, Venezuela or Russia."
Brazil's undiscovered oil reserves in the Campos and Santosbasins, an extension of the area where giant reserves were foundin 2007, may contain as much as 100 billion barrels, he said,enough for about three years of world needs.
The ANP estimated the amount of oil on sale at Tuesday'sauction at about 35 billion barrels in place.
Among the biggest winners were Britain's BG Group Plc, which offered to pay 416 million reais for stakes in 10blocks, Brazil's OGX Petroleo e Gas SA, which willpay 376 million reais for stakes in 13 blocks, and France'sTotal SA, which agreed to pay 372 million reais for ashare in 10, according to Reuters and preliminary ANP data.Companies from Australia, Norway, Colombia and Spain also won.
HARSH ENVIRONMENT
Since the last auction, Brazil has had trouble fulfillingits potential as an oil power.
In 2008, state-controlled Petroleo Brasileiro SA, orPetrobras said it would spend $112 billion over fiveyears to boost output 50 percent to almost 3.5 million barrels aday in 2012, an amount that would have seen it pass Mexico andVenezuela as Latin America's top producer.
However, production rose only 13 percent in five years toabout 2.68 million barrels, while Petrobras' shares are worthless than before the giant 2007 discoveries.
Petrobras agreed to pay 540 million reais for stakes in 35blocks, the largest of all winning bidders on Tuesday, butproportionally less than in previous auctions.
Non-state companies have also had it hard. Chevron Corp. and its drilling contractor Transocean Ltd. faceabout $20 billion in civil lawsuits for a 3,500 barrel oil spillin 2011, even though the ANP said no discernible environmentaldamage was done and that Chevron cleaned up quickly.
Despite these difficulties, Chevron jumped in on Tuesday topay 31.4 million reais for a stake in a block.
The auction, though, may help Brazil break from a cycle ofnegative news and provide companies with the future reservesneeded to keep investment flowing, João Carlos de Luca, head ofthe IBP, Brazil's petroleum industry association said.
"I think we can put a lot of the difficulties of the lastfew years behind us," he said. "Demand was very strong at theauction about 40 percent above my own estimates."
PENT-UP DEMAND
In the end, the world's growing demand for oil and Brazil'srelative appeal as an oil frontier drew investors back.
After an anxious lead-up to the auction, Brazil's governmentexpressed joy over the soaring bids. "We never saw anything likethis," Marco Antonio Martins Almeida, the oil secretary atBrazil's energy ministry said on Tuesday.
Brazil's OGX Petroleo e Gas SA, hurt by unfulfilledpromises, came out of the auction looking stronger. Controlledby Brazilian billionaire Eike Batista, OGX saw its shares soaron optimism over Brazil's oil potential only to see them slumpto nearly penny stock levels as output failed to meet targets.
OGX won 13 blocks at auction, 10 alone and three inpartnership, and was the main partner in the auction for ExxonMobil Corp. the No. 1 U.S. oil company.
Exxon picked up 50 percent stakes in two blocks with OGX for63.9 million reais, according to Reuters and the ANP.
OGX rose 5.4 percent in Sao Paulo on Tuesday.
Oil companies from fast-growing Asian nations, though stayedaway. Only Malaysia's Petronas, which recently boughta stake in an OGX field was very active, but it won no blocks.
"I think the Chinese and Asian oil companies want reserveswith more promise of fast development," the petroleumassociation's De Luca said. "These frontier areas will take timeto develop."
He expected Asian companies to show up for a plannedNovember auction, under stricter rules, greater state controland Petrobras control. The areas will be near the giantdiscoveries of 2007 that started Brazil's five-year oil debate.
