Petrobras Highest Bidder for 22 GOM Blocks

Petrobras, a Brazilian international energy company was the highest bidder for 22 blocks in Lease Sale 206, offered by the Minerals Management Service (MMS), the United States' regulatory agency that manages offshore activities, on March 19 2008. Petrobras was well positioned among the main bidders and made a total investment in the order of $178.9 million.

The lease sale, which included the participation of a total of 78 oil and gas companies, focused on the central and eastern Gulf of Mexico. Of the 22 blocks, Petrobras secured 100% stakes for 11 blocks and will perform as the Operator for them. The remaining blocks were acquired in a 50/50 partnership with Devon Energy. Petrobras will operate four of them, while its partner will operate 7.

As in the lease sale held in October 2007, when it was the highest bidder for 26 blocks, Petrobras concentrated its bids on deep and ultradeep waters. The company boosted its position in these areas, which are the focus of its activities in the Gulf of Mexico, particularly the Walker Ridge, Mississippi Canyon, Green Canyon, Keathley Canyon, and Atwater Valley quadrants.

When the MMS awards the new concessions, the deep and ultra-deep water exploratory project portfolio will total 221 blocks, 157 of which operated by Petrobras.

The participation in the Lease Sale 206 is aligned with the demands of Petrobras Strategic Plan, which calls for international growth through investments made in priority areas such as the American sector of the Gulf of Mexico. As a result, Petrobras strengthens its position as one of the leaders of exploration in deep and ultra-deep waters in the region.

Petrobras holds stakes in four of the most important discoveries made in the Lower Tertiary reservoirs in the Cascade, Chinook, Saint Malo, and Stones fields, in the Walker Ridge Quadrant.

The Cascade and Chinook fields, currently in the development and facility construction stage, are operated by Petrobras, which will be the pioneering company there, not only in Lower Tertiary ultradeep water reservoir production, but also in the use of an FPSO (Floating Production, Storage and Offloading) platform, which is expected to go online in June 2010.

Petrobras' 2008-2012 investment plan for the United States foresees a total expenditure of $4.9 billion, to be invested in exploration, production and refining activities.