BRAZIL: President Dilma Rousseff talks up social spending in health and education after the South American country auctions its massive Libra oil field to an international consortium led by Petrobras

Record ID: 344357

  • Title: BRAZIL: President Dilma Rousseff talks up social spending in health and education after the South American country auctions its massive Libra oil field to an international consortium led by Petrobras
  • Date: 22nd October 2013
  • Summary: RIO DE JANEIRO, BRAZIL (OCTOBER 21, 2013) (REUTERS) VARIOUS OF PETROBRAS OFF-SHORE EXPLORATION SITE
  • Embargoed: 6th November 2013 12:00
  • Keywords:
  • Location: Brazil
  • Country: Brazil
  • Topics: Domestic Politics,Energy
  • Reuters ID: LVA3SXA7EFVPN93DKHUXC3DV7ZF5
  • Story Text: Brazilian President Dilma Rousseff hailed the auction of its giant offshore Libra oil area as a boon for education and health in Latin America's largest country on Monday (October 21), hours after a consortium led by Brazilian state-run oil company Petroleo Brasileiro SA. won exploration rights.
    In a national address, Rousseff declared the auction was a big step forward for Brazil.

    "Today, Brazil took a big step. It started to make reality a large-scale operation of Pre-Sal. And we're ensuring for the future a great number of resources never before imagined for education and health in our country," she said.
    Petrobras took 40 percent of the field, 10 percent above the legal minimum, in an auction that took place in a hotel Rio de Janeiro as hundreds of demonstrators gathered outside, sometimes clashing with police.
    France's Total SA and Anglo-Dutch Royal Dutch Shell Plc will each have 20 percent of the partnership, while China National Petroleum Corp and China's CNOOC will each have 10 percent.
    Highlighting the lacklustre interest by most major oil companies in the auction, the companies agreed to give the government the minimum legal amount of so-called "profit oil" from the fields - or oil produced after initial investment costs are paid. Under the terms of a new production-sharing contract, that minimum was set at 41.65 percent of profit oil.
    Oil unions in Brazil last week launched a strike against the planned sale and some groups have gone to court to try to stop the auction, calling it a sell-out of precious national resources to foreign interests.
    Responding to criticism, Rousseff said a large majority of income from the oil field will remain in Brazil's hands.

    "The results of the auctions, 85% of all income produced in the Libra field will belong to the Brazilian state and Petrobras. This is quite different from privatisation," she said.
    Libra is estimated to hold between 8 billion and 12 billion barrels of recoverable oil.
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