The choice of the executives for Pré-Sal Petróleo SA (PPSA), state-owned company that will manage the contracts of oil fields auctioned under the production-sharing model, last week, was "absolutely crucial" for the decision of France's Total to take part in the Libra field auction on Monday, Total's top executive in Brazil, Denis Palluat de Besset, said.

"The president and all directors [of PPSA] are people who know this type of work, they are not people who will handle this in a political way, for us it was fundamental," Mr. Besset said.

The French company joined the consortium formed by Petrobras, China's CNPC and Cnooc and Anglo-Dutch major Shell to get the Libra field in the pre-salt of the Santos basin. The winning bid was the minimum set in the auction rules, with 41.65% of the surplus oil going to the Union.

Mr. Besset had raised the issue of PPSA's formation in a public hearing on the invitation for bids that the National Petroleum Agency (ANP) held. The executive then declared that it was difficult to define the participation without knowing what the PPSA formation was. In practice, the state-owned company will supervise the consortium's accounting, with powers to allow or deny expenses to be deducted before the payment in oil for the Union.

André Araújo, president of Shell Brasil, said Monday that he didn't see the presence of PPSA in managing the Libra contract as a risk factor. "We already knew the contract's conditions for some time, it's not a surprise what came today," he said.

Messrs. Besset and Araújo said the bid was result of studies conducted by the consortium since the tender notice was published. "The studies we've made showed us that this percentage ensures the minimum of return," Mr. Besset said.

Above the 41.65% of oil to the state offered, Mr. Besset said, "it would be [economically viable], but [it would bring] little profit."

He said the R$3 billion (about $1.4 billion) of the French share in the signing bonus for Libra will come from France and will be paid in a month to ANP, in dollars. Mr. Araújo declined to say how Shell will make the bonus payment.

Helder Queiroz, director of ANP, said the contract's signing is slated to happen in a month. And the bonus payment must be made some days earlier.

With Libra, Total will now have 13 blocks in Brazil, still in exploration stage. Worldwide, the company produces 2.3 million barrels of oil equivalent, more than 1 million of them in West Africa, where there are also pre-salt reserves.

"In West Africa, we are one of the first operators in ultra-deep waters and Shell also has a lot of experience. So, together, we will be able to make a very strong project," Mr. Besset said.

Total has budgeted $300 million for investments in Brazil in 2014. But this amount is not very high, Mr. Besset said, because of the delay in the delivery of a rig to drill the Xerelete field, in the Campos basin, which arrives only in 2014. He added that the heaviest investment in Libra will not happen before 2017 or 2018, when Magda Chambriard, the ANP director general, expects Libra to start production.

The Total and Shell executives also avoided giving estimates of peak production in Libra and also how long it will take for it to be reached. The ANP forecast is of 1.4 million barrels of oil a day in 10 to 15 years. "Hopefully it's true," Mr. Besset said. "If it is 1.4 million barrels a day it's good, it's good."

PPSA President Oswaldo Pedrosa considered the winning consortium's composition as a positive one. "The prospect [for Libra] is very good, with an extremely representative consortium, with 40% of Petrobras, two large companies that are already in Brazil [Shell and Total] and two Chinese firms that come eager to develop oil and gas in Brazil," he said.

CNPC and Cnooc executives declined to give interviews during the event. The vice president of CNPC, Yiwu Song, and the vice president of Cnooc, Hu Gencheng, were staying at the Windsor Hotel, where the auction was held.

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