By Rodrigo Viga Gaier
RIO DE JANEIRO, Sept 19 (Reuters) - Only 11 oil companiespaid the fee required to qualify for a planned Oct. 21 auctionof Brazil's biggest ever oil discovery, the country's petroleumregulator said on Thursday, noting that almost four times thatmany companies had been expected to participate.
Deep-pocketed international companies such as Exxon MobilCorp, BP Plc and BG Group Plc plan to stayaway from bidding for the giant Libra offshore oil prospect nearRio de Janeiro, Magda Chambriard, head of Brazil's oil regulatorANP, told reporters on Thursday.
Chambriard said she had expected more than 40 companies tobid for Libra, the first Brazilian area to be sold under a 2010"production-sharing" law that requires investors in the area togive the Brazilian government a share of output to sell on itsown account. BP and BG have large oilfield investments close toLibra, and Exxon failed to find oil nearby several years ago.
"This is a surprise, the area is extremely promising andthere are not any opportunities in the world like this," saidPaulo Roberto da Costa, an oil industry consultant and formerhead of refining at Petroleo Brasileiro SA, or Petrobras,Brazil's state-run oil company. "I expected a much larger numberbecause of its potential."
Brazil's government, which expects to get $400 billion fromLibra over 30 years, sees the new rules, which apply to all newdevelopment in the Campos and Santos basins near Rio de Janeiro,as a way to gain more control over natural resources and financeimprovements in health care and education. [ID: nE5N0F70FG]
Oil rights in the rest of Brazil will continue to be sold ona concession basis, where oil companies own all the output, butpay a royalty of at least 10 percent on everything produced.
Under the production-sharing system Petrobras will have totake a minimum 30 percent stake in any winning group and directthe development of the area as the group's operator.
To secure a spot at the auction, companies were required topay 2.05 million reais ($931,818) by the end of Wednesday. Thepayment also gives them bidding information. Companies that makeoffers will also have to provide additional financial guaranteesbefore the auction. At previous auctions some companies thathave paid the initial fee have later declined to make bids.
To buy the Libra rights, the winning company or group willhave to pay at least 15 billion reais ($7.8 billion) up front.
Libra, with an estimated 8 billion to 12 billion barrels ofrecoverable oil, enough for three to five months of worldconsumption, is one of the largest oil prospects ever sold atauction. Libra is expected to produce 1 million barrels a day,half of Brazil's current output, within 10 years.
Earlier on Thursday, Chambriard said that at least 12companies had paid the initial entry fee. The ANP press officesaid the actual number was 11.
The ANP is expected to publish a complete list ofpreliminary participants later on Thursday, the regulator'spress office said on Wednesday.
BP (BP.)
