By Jeff Fick
RIO DE JANEIRO--Brazil on Thursday moved to tap the global shale oil and natural gas boom that revolutionized the U.S. energy market--by offering 240 exploration concessions at an auction that lacked the presence of many major companies.
Brazilian state-run energy giant Petroleo Brasileiro SA (PBR), or Petrobras, dominated the early bidding. The auction featured both new areas in remote regions that are little explored and areas that already have produced oil and gas.
There was lukewarm interest from major oil companies as Petrobras, Royal Dutch Shell PLC (RDSA) and France's Total SA (TOT) were the only major players out of the 21 firms that registered to participate. The modest turnout mirrored last month's sale of the giant Libra offshore field, when heavyweights such as Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) and BP PLC (BP) sat out the sale of Brazil's largest offshore oil discovery.
Interest in the auction was undermined by previous hefty investments by oil companies in Brazil as well as the riskier, remote territory that was up for bid, company executives and industry analysts said.
"We already have a good portfolio in Brazil," said Mauro Andrade, vice president of public affairs for Statoil ASA's (STO) Brazilian unit. Statoil, which also sat out the Libra auction, is focused on development of its 100,000-barrel-a-day Peregrino field and several other offshore blocks in Brazil, Mr. Andrade said.
Also weighing on the bidding is that Brazil has yet to finalize rules for hydraulic fracturing, the process used to break up rocks containing oil and natural gas that boosted output in the U.S., amid concerns about environmental safety.
"We're certainly capable of producing legislation that protects the environment and permits development of this activity in a safe and secure way," said Joao Carlos de Luca, president of the Brazilian Petroleum Institute, a trade group.
Write to Jeff Fick at email@example.com
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(END) Dow Jones Newswires
November 28, 2013 11:39 ET (16:39 GMT)Copyright (c) 2013 Dow Jones & Company, Inc.
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