Continuing to increase its activity in the U.S. and solidifying its position in the Gulf of Mexico, Petrobras America, a subsidiary of Brazilian international energy company Petrobras, is expanding its holdings one lease sale at a time.

On Wednesday in New Orleans, Petrobras America bid on 57 blocks in the U.S. Minerals Management Service’s (MMS) Western Gulf of Mexico Oil and Gas Lease Sale 196.

Making a significant splash, Petrobras America was the highest bidder for 53 blocks, the highest number of winning bids of any company for the sale. The high bids totaled $30.1 million. Petrobras ensured 100% of participation and will be the operator on a set of blocks comprising eight prospects with high potential for oil and gas reserves, from which three are in the ultradeep waters, four in the western area of the Gulf and one in deep waters in the Garden Banks quadrant.

The company has been very busy in the Gulf over the last year. In Aug. 2004, Petrobras America Inc. had 36 accepted bids for $10.5 million in the Oil and Gas Lease Sale 192 (see Daily GPI, Aug. 19, 2004; Nov. 19, 2004). In March 2005, Petrobras America Inc. submitted the most high bids with four at $1.65 million in Lease Sale 197 in the Eastern Gulf of Mexico (see Daily GPI, March 17).

Petrobras America estimates investing near $150 million this year and, through 2009, approximately $1.7 billion, expecting production over 100 thousand b/d in the beginning of the next decade.

Petrobras said the lease sale results reflect its priorities in its strategic international plan. At the same time, the company said it consolidates its position as one of the leaders in the exploration activities in Gulf of Mexico ultradeep waters, where it is associated with giant worldwide oil industry companies, with roles in three major discoveries in that region, and in an already producing field.

In the set of blocks acquired, one is near to the Cottonwood discovery, located in the GB 244 block, in water depth of 700 meters, where the first well operated by Petrobras in deep waters in the Gulf of Mexico is being drilled. Depending on the results of this well, first oil may production may occur in 2007. The company noted that the inclusion of this new block in the project’s portfolio, in the Garden Banks quadrant, will allow higher synergy through the joint development of future discoveries.

The current bid allowed the extension of Petrobras participation in other areas of interest for the company, the region located in the western region of the U.S. Gulf of Mexico, in the Corpus Christi, Padre Island and Mustang Island quadrants. The company chose such quadrants as priority, with a differentiated view about the geological perspectives, where there are a number of structures not yet tested that could contain large oil and gas reserves. The drilling of the first well in this region is planned for the next year.

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