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* Sale succeeds despite govt intervention, growing supply
* OGX, BG, Total, Galp stand out among winning bidders
* High demand, quick sales enabled auction to close early
* Areas offered believed to hold at least 35 bln barrels
By Jeb Blount and Sabrina Lorenzi
RIO DE JANEIRO, May 14 (Reuters) - Brazil's first auctionfor oil and gas rights in five years raised a record 2.82billion reais ($1.4 billion) on Tuesday, alleviating fears thatgovernment intervention and growth in new global supplies mightcrimp enthusiasm for the country's oil sector.
The auction, which had been scheduled to take two days, drewsuch interest that regulators accepted bids apace, movingquickly through the blocks on offer and wrapping up the sale bylate Tuesday afternoon. Bidders offered a total amount thatbroke a record 2.1 billion reais set at an auction in 2007.
Offers for the most sought-after blocks were as much as 40times the minimum values set for the sale. In addition topayments pledged for the rights themselves, bidders alsocommitted to investments in the fields of about 7 billion reais.
OGX Petroleo e Gas SA, the struggling oil startupcontrolled by Brazilian billionaire Eike Batista, was among themost aggressive bidders. Companies including Britain's BG GroupPlc, France's Total SA and Portugal's GalpEnergia SGPS SA also scored multiple blocks.
The auction comes one day after Brazil's state-run energycompany Petroleo Brasileiro SA, or Petrobras, sold$11 billion worth of global debt despite heavy criticism frominvestors in recent years because of missed production targetsand sagging profits.
Demand for the bonds, coupled with the strong showing atTuesday's auction, indicate investors remain eager to be inBrazil, even after the government rewrote industry regulationsto gain greater control over new concessions followingdiscoveries of massive new offshore reserves in 2007.
"Companies would really like to expand their role in thecountry, including ourselves," said Thore Kristiansen, presidentof the Brazil unit of Norway's Statoil ASA, one of theparticipants. The strong showing, he added, reflects "pent updemand."
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, Brazil's oil secretary,said in an interview.
The auction kicked off with the sale of onshore blocks inthe northeastern Parnaiba basin, followed by offshore blocks inthe Foz do Amazonas basin, near the mouth of the Amazon river,and in the Barreirinhas basin further south.
Petrobras, Galp and OGX won early onshore blocks. OGX, whichhas lost nearly 90 percent of its market value since the companyfailed to meet initial production targets, secured rights to atleast 13 blocks, onshore and off, through bids totaling about375 million reais.
Total and Britain's BP Group Plc were among thesuccessful bidders for the offshore Amazon blocks, located justsouth of a major 2012 oil discovery off the coast of FrenchGuyana. Other successful bidders included Statoil, Chevron Corp., Exxon Mobil Corp and Australia's BHP BillitonPlc, until now not a big player in Brazilian oil.
On offer were rights to 289 onshore and offshore explorationand production blocks that add up to an area roughly the size ofBangladesh, or about 150,000 square kilometers (60,000 squaremiles).
The blocks, in regions outside the offshore swath near Riode Janeiro where the big recent reserves were discovered, areestimated to contain at least 35 billion barrels of oil, or justover a year's worth of global crude oil demand.
A CHANGED LANDSCAPE
Though the auction drew a record number of participants,government officials, industry suppliers and others were unsurebefore the sale how much the 64 Brazilian and internationalcompanies that registered would bet.
Officials were eager to know whether interest would remainstrong among major multinational energy companies or whethersmaller, adventuresome investors would prove more willing thanbigger competitors.
Doubts ahead of the auction reflected an energy landscapefar different from the last time oil and gas rights were sold inBrazil. World supplies look more plentiful now, thanks to ashale-oil boom in the United States and success at extractingonce hard-to-reach oil in Canada, Venezuela and elsewhere.
Brazil's production has fallen in recent years as thegovernment halted sales of new blocks and reworked its rules,upending a regulatory model that had been popular with foreigninvestors. Since huge reserves near Rio were discovered, thegovernment has sought more control over future concessions, anda greater share of oil produced in the subsalt region, home ofthe big new discoveries.
'THE SIZE OF THE PRIZE'
Still, the potential for profit motivated bidders, many ofwhom operate in countries far less investor-friendly thanBrazil. In addition to any upside offered by the blocks soldTuesday, many investors were eager to gain or increase exposureto a country that could still boast vast undiscovered reserves.
"The size of the prize in the country is really too big forcompanies to ignore," said Ruaraidh Montgomery, a Latin Americaanalyst for energy consultancy Wood Mackenzie. "Theopportunity's just too great."
In all, rights to 140 of the blocks on offer were sold.
Oil companies were selective. Bidding was fierce for theoffshore Amazon blocks in promising deepwater fields, but onlytwo companies made bids for three of 26 blocks offered inshallow water closer to shore in the same basin.
Brazilian companies took part despite production delays andsluggish development of new fields.
Most of the blocks auctioned are in frontier regions, orunderexplored areas with little or no existing output.
The blocks, mostly in north and northeast Brazil, were splitinto four onshore and seven offshore zones across 11 sedimentarybasins.
In November, Brazil plans to sell blocks in what it hasdubbed the "subsalt polygon," which includes Lula, the big fielddiscovered in 2007, and other major nearby finds. The termsubsalt is used to denote the deep beds, beneath layers of saltunder the ocean floor, where the big recent discoveries lie.
But the polygon also includes much oil, including thatcurrently produced in the well-known Campos and Santos basins,that does not lie in subsalt reservoirs. Campos and Santostogether account for more than 80 percent of Brazil's existingproduction.
