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Page added on November 2, 2013
Brazil oil-auction protests turn violent
Protesters have marched to the headquarters of Brazil’s state-run petroleum company Petrobras after it won the right to develop an offshore field that could contain 12 billion barrels of oil.
A consortium that includes Petrobras, Shell, Total and two Chinese firms successfully bid for the rights at an auction, Brazil’s government announced on Monday.
Five people were reported hurt as union workers opposed to the auctioning off of national assets to foreign companies clashed with police in Rio de Janeiro.
More than 1,000 police were called in and responded with tear gas and rubber-coated steel bullets after about 200 protesters converged on the hotel hosting the action.
The five firms won 35-year concessions, with Petrobras taking a 40 percent stake, more than the minimum required by the terms of Brazil’s offer, which has been controversial at home.
Shell and Total both earned a 20 percent stake with CNOOC and CNPC securing 10 percent each.
Their consortium was the only bid to offer the Brazilian state the minimum 41.65 percent of oil to be extracted from the Libra oil field, which holds an estimated eight to 12 billion barrels of oil.
To put that into context, Brazil currently has 15.3 billion barrels of proven reserves and is already the second-largest in South America after Venezuela.
Government ‘satisfied’
Guido Mantega, Brazilian finance minister, praised the auction’s outcome.
“The government is very satisfied with the Libra auction. The auction was a success,” he said.
He said the “high-level” firms had experience in “exploiting this oil in the shortest time possible, which is what we are interested in doing”.
Mantega further said the government was happy in that “as we know this is a very profitable reserve, we are talking about … 41 percent of a very big cake – so we are very satisfied with this stake”.
In advance of the auction, ANP estimated the Brazilian government would receive around three quarters of overall Libra profits.
Analysts say the Libra field will be able to produce around 1.4 million barrels a day by 2017, according to ANP.
A further spin-off could come in the form of a doubling of Brazilian gas reserves, currently 459.3 billion cubic metres.
The reserves are what are known as pre-salt – that is, they lie beneath a layer of salt deep below the Atlantic Ocean.
7 Comments on "Brazil oil-auction protests turn violent"
rockman on Sat, 2nd Nov 2013 5:42 pm
“Five people were reported hurt as union workers opposed to the auctioning off of national assets to foreign companies clashed with police in Rio de Janeiro.” So I assume the folks protesting would rather the gov’t take the $billions needed to develop those fields from the monies currently spent to run the country and keep all the oil for themselves. Of course, that would mean creating a new national oil company owned (and funded) by the gov’t so all the revenue remains in the gov’t.
OTOH they can let Petrobra et al spend the $billions, take the risks and the gov’t still gets 41% of the revenue. Simple solution: let the electorate vote on the issue. I suspect the people would rather not tie up $billions of their monies for the better part of a decade before they see the cash flow begin.
FYI: US offshore lease royalties are 16.66%.
bobinget on Sat, 2nd Nov 2013 5:42 pm
The Brazilian people don’t believe they will never see material improvement in their lives as a result of this dangerous practice of pre-salt drilling.
Several serious ‘spills’ (i hate that word, reminds of a harmless glass of milk tipping) have turned Cariocas
against tar beaches.
bobinget on Sat, 2nd Nov 2013 5:43 pm
(will ever see)
edit
Stilgar on Sat, 2nd Nov 2013 9:19 pm
The government is happy because they didn’t have a clue as to how to extract it. Even if it’s discounted oil, at least they figure let’s reap some rewards. I hope for their sakes they set themselves up a good deal.
Stilgar on Sat, 2nd Nov 2013 9:23 pm
Oh and by the way…if this isn’t a sign of peak oil, what is?
BillT on Sun, 3rd Nov 2013 1:25 am
Stilgar, I just sit back and watch, via the internet, the fantastic drama happening in real time these days. Better than any movie or TV series and basically free. Where else can you see greed, ignorance, stupidity and hate in such graphic scenes and events? Only in real life. We are witnessing the death of a world and a species, homo sapiens.
Stilgar on Sun, 3rd Nov 2013 9:58 pm
Yes, and a fantastic drama it is that will only get more entertaining as the cliff creeps closer. I too find the internet a much better source because you won’t find the truth on TV or in a newspaper. Those sources are too concerned with what the advertisers think. I feel sorry for the one’s that have accepted MSM as their source of information, because when shtf they’ll be clueless, thinking it’s just a temporary crisis that can be fixed with greater amounts of QE.