Brazil E&P 4th Round Attracted Fewer Bidders

Thirty-five oil companies, including 10 newcomers, subscribed to bid in Brazil's fourth E&P licensing round, the ANP said on Tuesday after closing the list. The number of potential bidders for the June 19-20 auction was well below the 44 companies who subscribed for the 3rd licensing round last year. Some may still drop out, as they have until June 5 to pay the auction fee which varies from $12,500 to $437,500. The final number of participants last year was 38. Newcomers this year include Nexen Inc., Alberta Energy Inc., and Norsk Hydro.

The ANP is offering 39 offshore and 15 onshore areas in 19 basins across Brazil in the fourth annual round, one area more than in 2001. ANP officials and analysts have said that demand at the auction may be below that at last June's round due to low world oil prices and a lack of big oil finds in Brazil since 1998. Nevertheless, analysts say the growing number of newcomers showed the auction still inspired interest in the world. "A good number of big oil companies are already (working) here, yet we have 10 new ones this year," said Monica Araujo, an oil sector analyst with BES Securities, adding that she expected Petrobras to snap up most areas again.

Last year, Petrobras bought operating rights for 27 areas out of 67 on offer and stakes in nine other blocks. Last year, the ANP sold licenses for about 60 percent of the blocks on offer, which was considered a success. In the three rounds so far, Brazil has sold 67 mainly offshore blocks to foreign oil groups, Petrobras and smaller local companies. While many foreign companies are involved in exploration, Petrobras, which lost its oil monopoly in 1998, is still Brazil's only oil producer.