Brazil's ANP sees Libra presalt field investments at $174 billion over 35 years


Brazil's ANP sees Libra presalt field investments at $174 billion over 35 years


RIO DE JANEIRO -- Brazil expects development of the country's first presalt oil field to generate billions of dollars in investments and fuel an industry boom, regulators said Tuesday.

Brazil's National Petroleum Agency, or ANP, estimates the winning bidders for the Libra field, which will be auctioned off Oct. 21, will invest $174 billion over the 35-year period of the contract, ANP Director Helder Queiroz said.

The auction will be Brazil's first under new production-sharing agreements implemented to give the government a greater slice of the oil riches discovered off the South American country's Atlantic Ocean coast. Billions of barrels of crude were discovered miles under the ocean trapped beneath a thick layer of salt.

The winning group will be selected based on how much oil it offers the government after initial costs are paid, as well as pay a signing bonus of $15 billion. Brazil state-run oil company Petrobras, is obligated to operate the field and hold at least a 30% stake.

The ANP hosted a public audience to discuss the presalt tender and production-sharing contract, which are expected to be finalized Aug. 23.

Oil companies represented by the Brazilian Petroleum Institute, or IBP, expressed concern during the audience about the lack of an inflation adjustment that would help eliminate the risk of costs exploding. Inflation is an especially important issue in Brazil, with inflation currently hovering near the 6.5% ceiling of the central bank's target range.

But ANP Director Magda Chambriard said it was unlikely changes would be made to the tender or production-sharing contract. "Few adjustments will be made, and none of the demands would be considered crucial," Ms. Chambriard said ahead of the audience.

The ANP received "various" comments from companies, industry trade groups and other entities during the open comment period, she said.

Dow Jones Newswires

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