RIO DE JANEIRO, July 22 (Reuters) - A Brazilian court blocked a bid by Italy’s ENI SpA to force the government to honor its 2006 winning bid in an auction for offshore exploration rights that was later canceled, Brazil’s oil regulator, the ANP, said on Tuesday.
The government’s 2006 decision to suspend the auction and its 2012 decision to cancel the sale were legitimate and offered no recourse to grant ENI’s injunction, Judge Eugenio Rosa de Araujo, of the 17th part of 2nd Regional Federal Court in Rio de Janeiro, said in his ruling.
The auction was suspended and finally canceled after the discovery of giant offshore reserves in a region known as “the subsalt,” south of Rio de Janeiro and near the block for which ENI had made the highest bid. The suspension and cancellation came before ENI could complete its purchase and sign a contract with the ANP.
The discovery of the subsalt reserves led the government to rewrite its oil rules. The new rules, first used in 2013, replaced the use of concession rights with production-sharing contracts in the subsalt region.
ENI bid 307.4 million reais ($142.3 million at the time) for the area, nearly double the next highest bid from Brazil’s state-led oil company, Petroleo Brasileiro SA, or Petrobras.
The subsalt oil and gas resources are trapped beneath a layer of salt under five kilometers (three miles) or more of ocean and seabed.
Other companies that lost their winning bids at the canceled auction include Repsol SA, India’s Oil and Natural Gas Corp and Norway’s Norsk Hydro ASA.
The ruling on ENI’s case came on June 20 but only made public by the ANP on Tuesday.
ENI’s lawyers in Brazil were not immediately available for comment. (Reporting by Jeb Blount; Editing by Steve Orlofsky)