Brazil defends offshore oil auction

Brazil's Minister of Mines and Energy Edison Lobao Brasilia - Arab Today Brazil's energy minister Saturday defended an auction of concessions in a vast offshore oil field, saying it did not mean the country's oil reserves were being privatized. He spoke as workers from state-owned oil giant Petrobras struck for a third day to protest the auction of the coveted Libra oil field, which opens Monday amid heavy security. Eleven oil companies, including some of the world's largest, are participating in the auction, the first involving the huge so-called "pre-salt" oil deposits found six years ago in deep water off Brazil's Atlantic coast. The army was called in to boost security ahead of the auction, which is to be held at a hotel to the west of Rio de Janeiro. Mines and Energy Minister Edison Lobao insisted that "we are not privatizing pre-salt oil." "Instead, we're taking over this immense wealth that lies under the sea and on land. It is not available to us if it stays where it is," he added. The auction will take place "no matter what," Lobao said, despite a series of lawsuits filed against him. Strikers oppose the government's decision to allow foreign and private firms to bid on the concessions. The Libra field is estimated to hold eight to 12 billion barrels of recoverable crude, or nearly a million barrels a day for five years, according to Brazil's National Petroleum Agency. US oil giants have shunned the auction, seeing too much state intervention with Petrobras granted sole operator status and a minimum 30 percent stake in any consortium under a 2010 law. But seven of the bidders rank among the world's 11 biggest oil companies by market capitalization: second-ranked China National Petroleum Corporation (CNPC), number three Anglo-Dutch Shell, Colombia's Ecopetrol, Petrobras, France's Total, China National Offshore Oil Corporation (CNOOC) and Spain's Repsol/China's Sinopec. Finance Minister Guido Mantega said this week Libra is expected to attract $180 billion in investment over the next 35 years. The winner will be the company or consortium that offers the most oil to the Brazilian state. Source: AFP