Petrobras snaps up 26 U.S. Gulf of Mexico blocks

RIO DE JANEIRO, Oct 4 (Reuters) - Brazil's state oil company Petrobras (PETR4.SA: Quote, Profile, Research)(PBR.N: Quote, Profile, Research) said on Thursday it snapped up 26 blocks in the U.S. part of the Gulf of Mexico for $108 million in a lease sale organized by the U.S. Minerals Management Service.

Petrobras said the blocks are in the central and eastern part of the Gulf. The company bought the rights for 20 blocks on its own and for six blocks in partnership with Devon Energy Corp (DVN.N: Quote, Profile, Research). Two of these will be Petrobras-operated.

The auction was on Wednesday. Petrobras said it sought to consolidate its position in areas of the Gulf where it already has exploration activities, particularly in deep-water and ultra deep-water tracts like Walker Ridge.

Other tracts included Mississippi Canyon, Green Canyon, Garden Banks, Keathley Canyon and Lloyd Ridge.

Petrobras has 338 blocks in the Gulf, of which it operates 200. It is a partner in three major fields -- Cascade, Chinook and St. Malo, in the Walker Ridge quadrant. Production at Petrobras-operated Cascade Chinook project should start in 2010.