March 27, 2018 / 3:30 PM / a year ago

UPDATE 1-Petrobras to participate selectively in Brazil oil auction-CEO

(New throughout, adds auction participation)

By Marta Nogueira and Rodrigo Viga Gaier

RIO DE JANEIRO, March 27 (Reuters) - Brazil’s Petroleo Brasileiro SA will participate “selectively” in an oil auction later this week as the state-controlled oil company seeks to boost its exploration portfolio, Chief Executive Officer Pedro Parente said on Tuesday.

An onshore and offshore auction round in Brazil on Thursday will be one of the last chances for companies to compete for some of the world’s biggest oil reserves ahead of elections that could slow private energy investment in the sector.

“We will go in selectively,” Parente said at an event in Rio de Janeiro, adding that Petrobras would form consortia with other firms to bid for blocks that require big investments.

Majors are likely to vie for a handful of blocks in the prolific offshore Campos and Santos basins on Thursday, with minimum signing bonuses of up to $575.5 million. Some are rumored to have desirable presalt geology.

Twenty-one companies including Chevron, BP, Exxon, Royal Dutch Shell, Statoil, and Total have registered to bid in a round where 70 blocks are being offered.

Parente also said Petrobras should at a minimum reach a net debt goal of 2.5 times earnings before interest, tax, depreciation and amortization this year. Petrobras, he added, could even achieve net debt of 2 times EBITDA if oil prices remain around $70 per barrel this year.

Petrobras continues to work to regain fuel market share and expects good results, especially in diesel, Parente added. (Writing by Alexandra Alper Editing by Chizu Nomiyama)

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