CORRECTED-UPDATE 3-Brazil gets strong bids at 1st oil, gas auction in 5 yrs

Tue May 14, 2013 4:00pm EDT
 
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(Corrects number of blocks to which OGX had secured rights up to that point to 8, not 78, paragraph 7)

* Comes as govt intervention mounts, global supply seen up

* Petrobras, Galp, OGX, Total, BP, BG win blocksmk

* Areas offered believed to hold at least 35 bln barrels

By Jeb Blount and Sabrina Lorenzi

RIO DE JANEIRO, May 14 (Reuters) - Global energy companies were strong bidders on Tuesday at Brazil's first auction for oil and natural gas rights in five years, alleviating fears that government intervention and growth in new global supplies might crimp enthusiasm for the South American country's oil sector.

By mid-day Tuesday, only a quarter of the way through the two-day auction, Brazil's oil agency had accepted 1.7 billion reais ($846 million) in bids - or four times the value of the minimum bids established for those rights. Some offers for the most sought-after blocks were up to 40 times the minimum values, and regulators predicted the sale could raise as much as 2 billion reais by the time it wraps up Wednesday.

The auction comes one day after state-run energy company Petroleo Brasileiro SA, or Petrobras, successfully sold $11 billion worth of global debt despite heavy criticism from investors in recent years because of missed production targets and sagging profits. Demand for the bonds, coupled with strong demand in the ongoing auction, indicate investors remain eager to be in Brazil following discoveries of massive new offshore reserves in 2007.

After an anxious lead-up to the auction, with doubts persisting about the interest in Brazilian oil, Brazil's government expressed joy over the soaring bids. "We never saw anything like this," said Marco Antonio Martins Almeida, Brazil's oil secretary, in an interview.   Continued...