What Happened: Brazil's long-awaited transfer of rights auction and a separate pre-salt bidding round have failed to attract significant interest after all several international oil corporations withdrew from the bidding process due to high costs, Bloomberg reported Nov. 6. The transfer of rights auction covered four oil blocks with an estimated 20 billion barrels in total reserves.
Why It Matters: The two auctions illustrate that international oil corporations have relatively little interest in bidding on high-cost, and potentially risky, Brazilian oil blocks that are currently under development.
Background: Just two of the four oil blocks in the transfer of rights action received bids, with the Buzios field going to a joint submission between Brazilian state-owned oil company Petrobras and subsidiaries of China National Offshore Oil Corp. and China National Petroleum Corporation (CNPC). Petrobras, meanwhile, was the sole bidder for the Itapu block. In the separate pre-salt auction, Brazil awarded just one block to Petrobras and CNPC.
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