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Consortium wins bid in Brazil’s oilfield auction

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A Petrobras strike and poor participation among major oil companies set clouds over the country’s largest auction of pre-salt fields since their discovery in 2007.

A consortium of companies made up of Anglo-Dutch Shell, French Total, and China's CNOOC won the bid to Brazil's Libra oilfield on Monday. The auction was the first by Brazil to foreign companies since the discovery of pre-salt deposits six years ago. The auction came amid a tense climate as a union strike with the participation of 90 to 100 percent of state oil company Petrobras’ work force protested outside the company's headquarters. Petrobras employees are fighting for better pay and benefits, and say they are opposed to foreign participation in the country’s oil industry. The second challenge came from lower than expected foreign interest in those fields. While the government estimated that 40 plus foreign companies would register to bid for the concessions, only 11 companies – and a notable absence of U.S. companies – participated, and only one bid in the end. These issues presented challenges for Brazil as it seeks to develop its nascent energy industry and promote economic growth.

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