Brazil awards potential oil bonanza to global consortium

A consortium including Petrobras, Shell, Total and two Chinese companies was the winner and sole bidder in Brazil's auction of a giant offshore oil block, considered one of the most promising in the world.

Protesters clashed with police and Army troops a couple of blocks from the hotel where the auction was carried out as oil workers and activists denounced the auction as a sale of national assets to foreign companies.

Protesters attacked parked cars and metal barriers protecting the areal while security forces fired tear gas. The government deployed Army troops ahead of the auction to help cordon off the area.

This was Brazil's first oil auction since new rules were implemented giving more power to the state-owned Petrobras and a percentage of the oil stays in state hands.

Under the new rules, Petrobras is required to be the sole operator and hold a minimum 30% stake in every consortium.

According to Brazil's A consortium including Petrobras, Shell, Total and two Chinese companies was the winner and sole bidder in Brazil's auction of a giant offshore oil block, considered one of the most promising in the world.

Protesters clashed with police and Army troops a couple of blocks from the hotel where the auction was carried out as oil workers and activists denounced the auction as a sale of national assets to foreign companies.

Protesters attacked parked cars and metal barriers protecting the areal while security forces fired tear gas. The government deployed Army troops ahead of the auction to help cordon off the area.

This was Brazil's first oil auction since new rules were implemented giving more power to the state-owned Petrobras and a percentage of the oil stays in state hands.

Under the new rules, Petrobras is required to be the sole operator and hold a minimum 30% stake in every consortium.

According to Brazil's National Petroleum Agency, the Libra oil field holds between 8 billion and 12 billion barrels of oil, making it one of the world's most promising fields.

In the end, only 11 companies registered for the auction despite government predictions some 40 companies would turn out. And only one consortium actually put in a bid.

Petrobras holds a 40% stake in the winning consortium. The other members are:

-- Shell, incorporated in the United Kingdom and headquartered in the Netherlands. It has a 20% stake.

-- Total, a French multinational company. It has a 20% stake.

-- China National Petroleum Corporation and China National Offshore Oil Corporation. They have a 10% stake each.

The auction comes at a bad time for Petrobras, which is struggling with its debt but will provide needed cash for state coffers.

The winning consortium has to cough up a $7 billion signing fee and invest about $185 billion over the 35 years of the concession.

the Libra oil field holds between 8 billion and 12 billion barrels of oil, making it one of the world's most promising fields.

In the end, only 11 companies registered for the auction despite government predictions some 40 companies would turn out. And only one consortium actually put in a bid.

Petrobras holds a 40% stake in the winning consortium. The other members are:

-- Shell, incorporated in the United Kingdom and headquartered in the Netherlands. It has a 20% stake.

-- Total, a French multinational company. It has a 20% stake.

-- China National Petroleum Corporation and China National Offshore Oil Corporation. They have a 10% stake each.

The auction comes at a bad time for Petrobras, which is struggling with its debt but will provide needed cash for state coffers.

The winning consortium has to cough up a $7 billion signing fee and invest about $185 billion over the 35 years of the concession.