BP to Move Ahead Quickly Offshore Brazil

 

Brazil awarded six blocks out of eight in an auction on Friday for a region holding estimated reserves of more than 12 billion barrels.

 

BP won two of the blocks in consortia, one with Brazil's state oil giant Petroleo Brasileiro (Petrobras) and another with Petrobras and a unit of Chinese state oil firm CNPC.

 

"We will be anxious to move forward now at pace," Bernard Looney, BP's chief executive for upstream, said after the auction.

 

"We came for two blocks and we got them, so we're very pleased," he said. "This is a significant step for us in the upstream in Brazil...These are potentially significant accumulations."

 

The Brazilian oil blocks were high-quality assets regardless of the oil price, Felipe Arbelaez, BP's regional president for Latin America, told Reuters after the auction.

 

BP won the Peroba block in the Santos basin with 40 percent participation in a consortium. Petrobras took 40 percent and China National Oil & Gas Exploration and Development Corp took the remaining 20 percent.

 

BP also won the Alto de Cabo Frio Central block in the Campos basin with a 50 percent stake in a joint venture with Petrobras.

 

But the company is still facing headwinds as it seeks to develop a block it won with Petrobras and Total SA (TTFNF) in the Foz de Amazonas area four years ago. Brazilian environmental regulators in August asked them for more information and have yet to grant them a permit to explore.

 

Arbelaez brushed aside concerns of political risk in Brazil, after a federal judge issued an injunction that temporarily suspended the auction, responding to a request from the leftist workers party.

 

"We don't necessarily see Brazil as a country where that is particularly more difficult than many other jurisdictions where we operate in the world," he said. "It's a reality in the business that we're in."

 

BP is looking carefully at bidding in offshore auctions in Mexico next year, Arbelaez said. The Mexican government had been responsive to the concerns of the oil industry as it prepares for that auction, he said.