(Rio de Janeiro, October 21, 2005). PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex:
XPBR/XPBRA], a Brazilian international energy company, announces that on October 17 and 18 2005 it took part in the 7th Bidding
Round for Exploratory Blocks organized by the National Oil, Gas and Biofuels Agency (ANP).
In the course of this bidding round, the Company acquired 96 new blocks either exclusively or in consortium, and tendered bids in 109 of the 1134 blocks offered for auction by the Agency.
Of the blocks acquired by the Company, 73 are located onshore and 23, offshore. Petrobras is to participate as the operator for 70 of these and in a non-operating capacity, for a further 26. The Companys results in the latest round are shown below:
Petrobras successfully bid for 18 blocks in high exploratory potential areas of the Espírito Santo, Campos and Santos basins
with the objective of consolidating the Companys position in deep and ultra-deep waters where it has an existing comprehensive
infrastructure and is operating on a selective basis. In addition, Petrobras obtained blocks in strategic areas of shallow
waters in the Espírito Santo and Santos basins. These acquisitions will enable the Company to operate in areas where there
are economically viable opportunities, the focus being on possible gas finds. In these areas, Petrobras has signed agreements
for 11 blocks with Shell, Statoil, Petrogal, Devon, BG and Repsol-YPF. The Companys average stake in these partnerships is
The acquisition of 63 blocks in mature areas in the Potiguar, Sergipe-Alagoas, Recôncavo and Espírito Santo basins is consistent with the strategy of operating in onshore areas by leveraging opportunities, and in synergy with existing production facilities. In the case of these acquisitions, Petrobras has signed partnership agreements with Petrogal, Starfish and Partex for 32 blocks and participates with an average stake of 56% in the related investments and interests.
The Company successfully tendered for 15 blocks in new exploratory frontier deep-water areas in the Potiguar basin and in the onshore São Francisco and Solimões basins. These investments are in line with Petrobras strategy of developing its exploratory activities in new frontier areas and are designed to ensure a sustainable reserve/strategic production ratio with the emphasis on increasing possible oil and gas discoveries. In 11 of these blocks where it is to operate in consortium with Petrogal, Encana and BG, the Companys average stake is 60%.
Petrobras was the company that acquired the most blocks, 54 as partners and 42 on an exclusive basis, increasing its exploratory projects portfolio by an additional concession area of 39,871 km2 (including acquisitions on a consortium basis). The Companys total financial outlay for account of the 7th Bidding Round was R$ 503.5 million. The success ratio in the acquisition of blocks was 88.1%.
The new concession areas will be instrumental in allowing the Company to replenish its portfolio of exploratory blocks, at the same time lengthening the portfolios average maturity. With the incorporation of the results of this bidding round, the Company will have enhanced its participation to more than 331 exploratory blocks. The signature of the new concession contracts is forecast for January 2006.
The active participation of Petrobras in the latest round is in line with the priorities set out in the Companys Strategic Plan for operating prudently and profitably in a socially and environmentally responsible manner.