Libra prospect, located 230km off Rio in the Santos Basin, was discovered in 2010 and, at 12bn barrels of oil, is estimated the largest in Brazil. It represents one of the largest petroleum assets ever put up for sale.
In exchange for the rights to develop the Libra offshore prospect, Brazil expects buyers to pay $4.6bn as a minimum up-front fee, where the winner of the bidding will be the company who pledges the largest share of their resulting oil and gas yield to the Brazilian state.
"If you raise the upfront bonus you reduce the amount of oil you receive and vice-versa," said National Agency of Petroleum, Natural Gas and Biofuels (ANP) representative Florival Carvalho. "The government needs to decide if it wants more bonus or more oil because the bonus is a pre-payment of revenue.
"This sale is not for small companies. It's for big companies joined-up in groups."
The sale will also require state-run Petrobras to take a 30% stake in the winning project, whether or not it enters the bidding, in exchange for 30% of the investment required to develop the block. The area made headlines in 2010 when Petrobras’ first exploration well collapsed inward when the drilling depth reached an underwater salt bed.