A total of 11 companies have paid up to take part in what will be a tough competition to try and gain a slice of Brazil’s giant Libra pre-salt block, although the number – or rather, the lack of – who signed up has raised some eyebrows.

Keen to take part are Shell, Total, Petrobras and Repsol-Sinopec, the latter a joint venture between the Spanish and Chinese companies. Also in the running are China National Offshore Oil Corp. and China National Petroleum Corp, Ecopetrol of Colombia, Mitsui of Japan, India’s Oil & Natural Gas Corp., Galp of Portugal and Malaysia’s Petronas, according to Brazil’s National Petroleum Agency (ANP). “These companies still need to pass for a qualification process to participate in the auction,” said the ANP.

Petrobras, of course, is already guaranteed a 30% exploration stake in the block.

Libra in the Santos Basin is expected to be auctioned on 21 October, with estimated recoverable reserves put at anywhere between 8-12 billion barrels of oil and gas.

The steep entry cost is likely to be one of the reasons why some significant names chose not to participate, perhaps believing they can get better value on other projects elsewhere. The signature bonus for Libra is put at around 15 billion Brazilian reais (US $6.35 billion). Absentees from the bidding included BP, BG, Exxon Mobil and Chevron. Originally the number of companies expected to participate was put at up to 40.

Brazil’s Finance Minister, Guido Mantega, chose to focus on the positive interest: “I can guarantee the auction will be successful. Everybody knows Libra is one of the most productive areas,” he said.
Libra is being auctioned under a new model for the pre-salt region, with Petrobras guaranteed operating control of new projects there. Libra will be subject to a profit-sharing model, where Petrobras and its partners will give the government at least 41.65% of production after deducting enough output to cover costs.