Biggest Brazil oil auction disappoints as only Petrobras and Chinese firms bid

Brazil’s biggest-ever oil auction frustrated expectations on Wednesday, as high prices and the dominant role of state-run oil company Petrobras scared off global oil majors.

Petroleo Brasileiro SA (PETR4.SA), as the Brazilian firm is also known, and Chinese state firms CNOOC (0883.HK) and CNODC [CNPC.UL] made the only bids out of over a dozen major oil firms who had registered. Two of four blocks on offer got no bids.

The setback was a harsh reminder that, even as promising offshore fields make Brazil a rare bright spot in Latin America’s petroleum industry, steep signing bonuses and tricky production-sharing deals can keep foreign players at bay.

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