Libra auction in Brazil: oil field sold for a bargain

The auctioning of the Libra Oil Field in Brazil received wide coverage in the international press, with glowing visions and other critical to the outcome of the event. The German magazine Der Spiegel says Brazil auctioned a “treasure for a bargain.” On the other hand, the Wall Stret Journal says that the country has taken a step towards the level of the big oil producing nations.

Beachgoers and the army on the beach in front of the hotel where the auctioning was happening in Rio
Beachgoers and the army on the beach in front of the hotel where the auctioning was happening in Rio.

Libra was auctioned to a consortium formed by Petrobras, Shell, Total and Chinese CNPC and CNOOC. In an article published on its website, the german magazine says that the oil from the pre – salt area will be a huge environmental risk for the sea, the wildlife and the beaches “in one of the most beautiful and populous coastal regions of Brazil,” but that “greed for natural resources” was higher.

Spiegel says that as only the winning consortium submitted a proposal, “with no competitors, they got treasure for a bargain.” The magazine says that oil exploration will catapult Brazil to the group of major oil producers and underlines the political weight of the global “South American superpower.”

Wall Street Journal


A report of the American business newspaper Wall Street Journal says that Brazil “took a big step forward” on Monday by auctioning the field for a consortium of multinationals and Petrobras.

The text, entitled “Brazil moves to join other major oil nations“, states that “the question of how best to develop new fields become highly controversial.”

Beachgoers and the army on the beach in front of the hotel where the auctioning was happening in Rio
Beachgoers and the army on the beach in front of the hotel where the auctioning was happening in Rio.

The paper highlights that Brazil is still a net importer of oil, and that the pre-salt fields are “crucial to Brazil’s aspirations to become an exporter.” The Wall Street Journal notes that the authorities outlined a strategy for the exploration of pre-salt, developing the shipbuilding industry and changed the laws to give Petrobras a prominent role in conducting business.

Details of the auctioning of Libra Field in Brazil

At 15 seconds to the deadline for submission of proposals for the area of ​​Libra, auctioned this Monday, October 21st in Rio, the first and only envelope was delivered to the agency’s bidding committee , with good and bad news for the government: the consortium bidder brought, not only two Chinese state companies, but also two global giants specialized in oil exploration in deep waters. But the participation of only one consortium reduced to a minimum the gains of the Union with the project.

Formed by Chinese CNOOC and CNPC, the Anglo- Dutch Shell and France’s Total  and Petrobras, the consortium is committed to delivering to Pre – Sal Petróleo SA ( PPSA ) a volume of 41.65% of oil production, excluding costs – equivalent to the floor set by the auction notice. The representative of the consortium brought a second envelope with a higher bid that was not delivered because of lack of competitors. For experts present on the event, the government could have received anywhere from 46 % to 48 % if there was competition.

Protesters in Barra da Tijuca beach where the auctioning was happening in Rio
Protesters in Barra da Tijuca beach where the auctioning was happening in Rio.

Outside of the hotel, the army kept people from protesting what they called the “privatization” of the brazilian pre-salt oil area, so regarded by the government as Brazil’s economic salvation. Bombs were thrown and even ships were brought to guarantee that the auctioning would happen.

It’s said that the brazilian pre – salt oil fields area holds the equivalent of two Norways in oil.

Pictures from OGlobo.com.br

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Joe Cloud
Dutch, American, Brazilian... lived there for 5 years and owns property in Brazil. Out of the country for a few years now and would like to go back, however current circumstances tell me it's not the right time.

Published by Joe Cloud

Dutch, American, Brazilian... lived there for 5 years and owns property in Brazil. Out of the country for a few years now and would like to go back, however current circumstances tell me it's not the right time.