Petrobras-led Group Wins Rights to Explore Brazil's Biggest Oilfield, Oil Workers Protest

A consortium led by Brazil's state-run Petrobras won the exploration rights to Brazil's biggest oilfield. 

The consortium, which is backed by Total, Shell and Chinese firms, won the bid at an auction at the Rio de Janeiro beachfront hotel, which was guarded by 1,100 security personnel, the BBC confirms. The group made the only bid in the auction, and offered the minimum share of the surplus production, meaning they won with the lowest bid.

Eleven oil companies expressed an interest in Brazil's Libra oilfield, but the Spanish Repsol withdrew on Monday, leaving the five winners as the only ones to present a bid. Chinese state companies CNPC and CNOOC offered 10 percent each, while French oil titan Total and Anglo-Dutch Shell held 20 percent stakes each. 

Despite the dearth of offers, Mines and Energy Minister Edison Lobao told reporters that he was "not one bit frustrated" that the contest was won by the lowest bidder. Magda Chambriard, the president of the government's National Petroleum Agency, called the auction an "absolute success."

"It is hard to imagine a more successful outcome. These companies are among the world's 10 most valuable in the energy branch," she said.

Petrobras offered a 10 percent stake on top of the 30 percent it was already entitled to, according to the auctioning rules. 

The oil consortium acquired the rights to explore the Libra field's estimated 8-12 million barrels of oil reserves for 35 years. 

Heavy security was in place around the hotel in the western Rio district of Barra da Tijuca since Sunday, but on Monday, violence broke out as protestors tried to invade an area close to the hotel that was cordoned off. Officers fired tear gas, rubber bullets and pepper bombs at protestors who threw stones and iron sheets as shields. A crowd vacationing on Barra da Tijuca beach saw the clash. Several protestors sustained injuries. 

"There were bizarre scenes. Riot police firing tear gas and stun grenades, not just against protesters, but also on to the beach, with hundreds of tourists and sun worshippers looking on incredulously," the BBC's Wyre Davies reported from Rio de Janeiro.

President Dilma Rousseff ordered tight security around the hotel after violent demonstrations shook Rio last week. 

Many of the protestors belong to unions representing oil workers, who have been on strike since Thursday at more than 40 oil platforms and refineries. The unions argue that the government is "selling off" Brazil's lucrative natural resources. 

Others say that the rules for the auction allowed too much state intervention, which made very large companies such as BP and Exxon apprehensive to put in a bid. 

The Libra oilfield, which is an offshore oilfield, is located at around 16,500 ft below a thick layer of rock, salt and sand, which renders oil exploration very challenging.

The oilfield belongs to the Brazilian government's National Petroleum Agency (ANP), and is part of massive oil reserves that were discovered in 2010. The discovery could possibly double Brazil's known reserves.