The headquarters of CNOOC, left, and a gas station run by CNPC. (Photo/CNS)
A five-party consortium that includes Chinese state-owned oil giants China National Petroleum Corporation (CNPC) and China National Offshore Oil Corporation (CNOOC) has won an auction for the exploration rights to the massive Libra oilfield off the coast of Brazil.
The auction was held in Rio de Janeiro on Monday amid security concerns stemming from angry protesters who accuse the Brazilian government of selling off the country's wealth. Despite the opposition, Total and Shell each ended up winning a 20% stake, while the two Chinese firms both won a 10% share. Brazil's state-run petroleum company Petrobras holds a 40% stake in the consortium and will act as the oilfield's sole operator as stipulated by Brasilia.
The contract is expected to be signed next month and will last for 35 years. The consortium companies will hand over 41.65% of their profits from the oil produced — after offsetting initial investment costs — to the Brazilian government under a new production-sharing contract. The consortium will also have to pay a bonus of 15 billion reals (US$6.8 billion) to the Brazilian government in advance.
Discovered in May 2010, Libra lies 230 kilometers off the coast of Rio and has a surface area of 1,500 square kilometers, making it the largest offshore oilfield in the world. According to estimates, the field holds between 26-42 billion barrels of oil with a recovery potential of 30%, equating to about 8-12 billion barrels of recoverable oil. When fully operational, it is expected to produce 1 million barrels of oil per day.