Brazil successfully attracted foreign investment with its first licensing round. The second round already has drawn more interest.

Brazil had a right to be pleased with its first round of licensing for oil properties last year. It was the first round of invitations for foreign oil companies, and both the Agência Nacional do Petróleo and the foreign companies were following new paths.
Still, in that round, 14 private companies from six countries had made 21 bids for the 12 of the offered blocks. They offered US $286 million for the properties.
When the paperwork had cleared, 14 companies from six countries had won parcels after paying signature bonuses totaling $189 million.
One of the properties in the Campos deepwater basin attracted four bidders. Another in the Santos Basin drew bids
from three companies. Several blocks earned two bids, and six gathered only one. The operators declined to bid on 14 offered blocks. Brazil is offering 23 blocks this year.
Petrobras successfully bid on five blocks, while Agip Oil do Brasil SA and YPF SA were second with four. Three blocks went to Texaco Brasil SA, and Esso Brasileira do Petóleo picked up two blocks. Earning one block each were Amerada Hess Limitada, BP Exploration Operating Co., British Borneo Oil & Gas plc, Kerr-McGee do Brasil Limitada, Shell Brasil SA and Unocal Latin American Ventures Ltd.
Those companies were the representative partners in the bidding. Often winners were part of a consortium. In BP's Foz de Amazonas block, for instance, consortium members were Esso, Petrobras, Shell and British Borneo.
BG do Brasil E&P Limitada, Enterprise Oil and Mobil Exploração e Desenvolvimento do Brasil Limitada submitted five bids among them but did not win any blocks.
Agip paid high dollar for a block with its bid of $72.8 million for a block in the Santos Basin. That was $40 per acre ($9,927 per square kilometer). Agip also committed to use a 25% Brazilian content for exploration on the block and a 20% domestic content for development of the property.
The highest per-acre bid, $42 ($10,494 per square kilometer), went to Agip and YPF with a total bid of $21.7 million for the parcel in the Campos Basin that drew four bidders. The partners committed to use Brazilian people, goods and services for 10% of the exploration work and 20% of the development work on the tract.
The highest domestic work commitment for exploration was 50%, while the highest domestic work commitment for development was 60%. Petrobras committed to the 60% level.
On average, the winning bidders paid $15 an acre ($3,783 per square kilometer) for the properties they won. The winners agreed to an average 25% domestic content for exploration and an average 27% Brazilian content for development work.
In addition to the winners in Round 1, Petrobras has signed joint ventures on blocks it controls. Partners include Amerada Hess, British Borneo, Odebrecht, Coastal Corp., Unocal, Piranga, YPF, Santa Fe Snyder, Norbay, Petroserv, Sotep, Tecpetrol, Sipetrol, PennzEnergy (now part of Devon Energy) and Perez Companc.

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