Skip to main content

Brazil awards potential oil bonanza to global consortium

By Shasta Darlington, CNN
updated 9:05 PM EDT, Mon October 21, 2013
Brazilian government representatives celebrate with Petrobras President Maria das Gracas Silva Forster (second left) at the end of the auction to develop the Libra oil field in Rio de Janeiro on Monday.
Brazilian government representatives celebrate with Petrobras President Maria das Gracas Silva Forster (second left) at the end of the auction to develop the Libra oil field in Rio de Janeiro on Monday.
STORY HIGHLIGHTS
  • The consortium is composed of companies from Brazil, Europe and China
  • The group has paid a $7 billion signing fee to access the Libra oil field
  • It's estimated the offshore oil field holds anywhere from 8 billion to 12 billion gallons
  • Protesters against the sale with police and troops in Brazil

Sao Paulo, Brazil (CNN) -- A consortium including Petrobras, Shell, Total and two Chinese companies was the winner and sole bidder in Brazil's auction of a giant offshore oil block, considered one of the most promising in the world.

Protesters clashed with police and Army troops a couple of blocks from the hotel where the auction was carried out as oil workers and activists denounced the auction as a sale of national assets to foreign companies.

Protesters attacked parked cars and metal barriers protecting the areal while security forces fired tear gas. The government deployed Army troops ahead of the auction to help cordon off the area.

This was Brazil's first oil auction since new rules were implemented giving more power to the state-owned Petrobras and a percentage of the oil stays in state hands.

A masked protester passes a fire during demonstrations over the sale.
A masked protester passes a fire during demonstrations over the sale.

Under the new rules, Petrobras is required to be the sole operator and hold a minimum 30% stake in every consortium.

According to Brazil's National Petroleum Agency, the Libra oil field holds between 8 billion and 12 billion barrels of oil, making it one of the world's most promising fields.

In the end, only 11 companies registered for the auction despite government predictions some 40 companies would turn out. And only one consortium actually put in a bid.

Petrobras holds a 40% stake in the winning consortium. The other members are:

-- Shell, incorporated in the United Kingdom and headquartered in the Netherlands. It has a 20% stake.

-- Total, a French multinational company. It has a 20% stake.

-- China National Petroleum Corporation and China National Offshore Oil Corporation. They have a 10% stake each.

The auction comes at a bad time for Petrobras, which is struggling with its debt but will provide needed cash for state coffers.

The winning consortium has to cough up a $7 billion signing fee and invest about $185 billion over the 35 years of the concession.

ADVERTISEMENT
Part of complete coverage on
updated 7:51 PM EST, Sun November 23, 2014
Where do hip young things hang out in Taiwan?
updated 8:18 PM EST, Sun November 23, 2014
The interior of the Formosa Boulevard Mass Rapid Transit Station in Kaohsiung, in southern Taiwan.
Stunning stations where your first priority won't be finding the nearest exit.
updated 5:43 AM EST, Mon November 24, 2014
A 30-year-old woman has been charged with attempting to kill a baby police say spent five days down a drain before being discovered by cyclists.
updated 8:21 PM EST, Thu November 20, 2014
If it wasn't for a comic's skit, Bill Cosby would still be America's favorite father, says expert.
updated 10:50 AM EST, Fri November 21, 2014
Obama orders the most sweeping overhaul of U.S. immigration in decades, prioritizing the deportation of "felons, not families."
updated 4:06 PM EST, Tue November 18, 2014
Fighters loyal to ISIS are now in control of Derna, a city on Libya's Mediterranean coast.
updated 6:19 PM EST, Fri November 21, 2014
China and likely other countries have the capacity to shut down the U.S. power grid, says the NSA.
updated 2:45 PM EST, Wed November 19, 2014
The founder of a U.S. nonprofit that works with returning soldiers is named CNN's Hero of the Year.
updated 12:38 PM EST, Mon November 17, 2014
A Syrian cleric condemns ISIS and its execution of U.S. hostage Peter Kassig.
updated 12:29 PM EST, Tue November 18, 2014
TV anchor wears the same suit for a year. Female colleague wears new outfit daily. Who gets criticized?
updated 7:39 AM EST, Tue November 25, 2014
Each day, CNN brings you an image capturing a moment to remember, defining the present in our changing world.
Browse through images from CNN teams around the world that you don't always see on news reports.
ADVERTISEMENT