Petrobras: High Bidder in 34 Blocks in the US Gulf of Mexico Lease Sale

Petrobras was the third highest bidder in the Western Gulf of Mexico Lease Sale 204, promoted by the federal agency that manages the offshore oil and gas activities, the Minerals Management Service (MMS).

The auction had as its focus the western region of the Gulf of México where the company presented proposals for 40 blocks, being the highest bidder in 34 blocks, in a total amount of US $29.3 million. With this result, Petrobras ensured 100% of participation, and the condition as Operator, in 20 blocks. The other 14 blocks, Petrobras was highest bidder in partnership with Devon Energy, holding 50% participating interest each company.

All the blocks are located in the company's core areas in the US Gulf of Mexico: 13 in shallow waters, aiming at deep shelf natural gas reservoirs; and 21 in deep and ultra deepwater in the quadrants East Breaks, Alaminos Canyon and Keathley Canyon to target to oil bearing reservoirs. Once these blocks are awarded by the MMS, they will be integrated into company's portfolio of exploration projects in the US Gulf, which shall amount 313 blocks, from which 177 Petrobras operated.

The success in the current lease sale addresses the priorities established by Petrobras in its Strategic Plan, which includes the US Gulf of Mexico as a priority for Petrobras investments overseas. In this respect, the company is consistently growing its oil and gas exploration and production activities in the deep and ultra deepwater in the US Gulf, where it is associated with oil and gas companies, already participating in 3 out of a number of major discoveries already made in that region. From these discoveries, Petrobras is the operator in Cascade and Chinook fields, holding 50% and 66.7%, respectively. In these two fields, Petrobras will pioneer the deployment of a Floating, Production, Storage and Offloading (FPSO) facility in the ultra deepwater US Gulf of Mexico. The remainder participations in Cascade and Chinook are respectively held by Devon Energy and Total E&P USA, Inc.

Petrobras America is currently working on an extensive geological and geophysical data base so as to evaluate blocks to participate in the forthcoming Central and Eastern Lease Sale 205, scheduled for October 3, 2007.

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