Chinese oil giants likely to bid for Brazil's new oil reserves

16:32, April 08, 2010      

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Chinese three oil giants, namely Sinopec, China National Petroleum Corporation (CNPC), and China National Offshore Oil Corporation (CNOOC), will likely bid for Brazil's offshore pre-salt oil reserves when auctions begin, according to recent statements by Brazilian officials.

As one of the most valuable oil and gas resources in South America, the prospects for Brazil's offshore pre-salt oil blocks are highly promising. Petrobras, Brazil's state oil company, said that it plans to invest a maximum of 220 billion U.S. dollars in exploring Brazil's offshore pre-salt oil reserves – including Tupi oil field – prior to 2014.

Tupi oil field has the largest proven oil reserves in Brazil, and is also the largest oil discovery in the last 30 years in South America. Moreover, its total reserves are estimated to be between 5 billion and 8 billion barrels. Since Brazil succeeded in extracting pre-salt oil from Tupi oil field on May 1, 2009, the country has no longer needed to import light crude oil from Africa. Furthermore, Brazil has been catapulted into the ranks of the world's top-10 oil producers, with the eighth largest oil reserves in the world.

Haroldo Lima, director of Brazil's National Petroleum Agency, said that Chinese energy companies are gathering information on how to participate in the bidding.

Observers pointed out that among the three leading Chinese energy companies (namely Sinopec, CNPC, and CNOOC), Sinopec has the biggest opportunity to participate in the bidding because of their long history of business development in Brazil. In addition, Sinopec was also responsible for signing the loans-for-oil agreement with Brazil on behalf of China in May 2009.

By People's Daily Online


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