The authorities tried to put the best complexion on the result. The managing director of the ANP, Sebastião do Rego Barros, pointed out that the sale of the concessions meant that oil companies would have to invest US$110m in Brazil in the short term. Once (or if) the companies find oil in commercial quantities, they have to negotiate new deals with the ANP.
The blocs were offered in nine sedimentary basins. The ANP offered 90 blocs near the mouth of the Amazon, but Petrobras was the only bidder and then for only one bloc. Petrobras was the only bidder for one of the 41 blocs the ANP offered in Bahia. Disappointingly for the government, few foreign oil companies were interested in the promising areas off Espíritu Santo: the ANP received no bids for the 24 concessions it offered there. There was reasonable interest in the Campos basin where Petrobras produces 80% of its daily production of 1.6m barrels.
Petrobras can afford to bid heavily because its profits in the first half of the year were R$9.37bn (US$3.1bn). This was more than its profits in the whole of 2002, when it made R$8bn. The company's profits would have been even higher but for the 31% cut in oil and diesel prices which came into effect at the beginning of May. The company pointed out that, for the first time, it made a profit (US$100m) on international oil and oil products transactions: its exports were US$2.26bn. Petrobras has long been a significant exporter of petrol, but a major importer of crude. This year, with domestic demand waning, it increased exports and bought less crude from the international market. The company added that domestic demand for petrol and oil products fell by 5.5% in the first half of the year. The company is importing 56,000bpd but exporting 448,000bpd.
The first half results reflect the effect of Petrobras's acquisition of Perez Companc in Argentina. This meant that international oil production increased almost eight fold, to 1.88m bpd. Domestic oil production fell by 1%, to 1.5m bpd, compared with the same period of 2002. The company's financial position looks strong: it has a debt of R$54bn of which R$11bn is short term. It has cash-in-hand of R$16bn. The company invested R$8.9bn in exploration and production in the first half: this was 55% more than in the same period of 2002.
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