Brazil plans to offer as much as 40 billion barrels of oil in place in its first auction of subsalt production-sharing contracts in November, the country's oil regulator told reporters in Rio de Janeiro.
The large amount of oil on offer led the regulator to recommend to the government that such sales be held about every two years.
"Selling in the subsalt every year is complicated," Magda Chambriard, head of the agency known as the ANP, told reporters. "There is a lot of volume," she said.
According to BP Plc and Reuters, 40 billion barrels of oil is enough to supply all U.S. needs for nearly 14 years. The ANP estimate, though, was for oil in place.
Oil in place reflects total volumes in the expected reservoirs. The amount of oil actually recoverable from a reservoir is usually far below the amount of oil in place.
The rules for the first such auction, scheduled for Nov. 28, will be released in May or June, Chambriard said.
Under oil rules passed in 2010, all new rights in the Subsalt Polygon near Rio de Janeiro will be sold to groups willing to give the Brazilian government the largest cut of output to sell on its own account. The Polygon, which covers most of Brazil's Campos and Santos sedimentary basins, is where the country already produces about 80 percent of its oil.
All new production in the Polygon will also require that state-controlled oil company Petroleo Brasileiro SA, or Petrobras, have a minimum 30 percent stake in the project and serve as the operator or group leader.
Previous auctions, held annually for a decade until 2008, the year after giant new fields were found in the Santos Basin, sold oil exploration and production rights as concessions. In exchange for the payment of a royalty for all oil and natural gas produced, the winner became owner of the oil produced from the field.
The government will hold an oil rights concession auction on May 14 and 15. The auction, the first in Brazil in five years, will be for frontier areas on shore and offshore outside of the Subsalt Polygon.
Regulator Chambriard also said that a planned sale of oil exploration rights in mature areas to small and medium-sized oil companies will likely happen in 2014. These two auctions will also be governed by the old concession rules.
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