Brazil's Round 6 Brings in US$704mn Investment Pledges

Round 6 Campos Basin Blocks
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Brazil's federal energy company Petrobras (NYSE: PBR) and 18 other companies have pledged to invest some 2.1bn reais (US$704mn) in up to six years to explore the 154 blocks they won in the sixth hydrocarbon licensing round held this week, Brazil's hydrocarbons regulator ANP announced.

The companies will pay a total of 665mn reais for the licenses, ANP said.

Petrobras bought licenses to explore 55 blocks alone and will invest in another 52 blocks with partners.

Norway's Statoil, the US's Devon Energy, and Kerr McGee, Portugal's Petrogal and Partex are among the foreign license winners. Another eight Brazilian companies placed winning bids alone or through joint ventures, mostly for onshore blocks.

Statoil has 100% stake in one block and formed a joint venture with Petrobras as operator for another three blocks. All the blocks are in deep water in the Camanu Almada basin in northeastern Brazil. Statoil expects to spud its first well there in 2006, the company said in a statement.

Devon Energy won as operator in two offshore blocks in the Campos basin close to the Roncador field's three-billion barrel and Jubarte-Cachalote's one-billion barrel estimated reserves. Devon will explore one block (C-M-101) with Kerr-McGee, Encana and SK Corp and the other (C-M-61) with Kerr-McGee and SK Corp.

Kerr-McGee won seven blocks in the Campos and Espírito Santo basins, of which it will operate two.

The two Portuguese companies, Partex and Petrogal, and the Brazilian companies won the onshore blocks on offer. Petrogal won 20 blocks in joint ventures with Petrobras, of which it will operate 12. The company plans to invest US$10mn, O Globo news service reported.

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