By Marta Nogueira, Gram Slattery and Marianna Parraga
RIO DE JANEIRO/MEXICO CITY, Oct 28 (Reuters) - When executives arrive in Rio de Janeiro this week for Brazil's biennial Offshore Technology Conference, they will find themselves in Latin America's most promising market for Big Oil by far.
That marks a dramatic change from only a year ago.
In early October 2018, Brazil's current president, Jair Bolsonaro, was in a tight electoral race with Fernando Haddad of the leftist Workers' Party. Global executives feared a Haddad victory would reverse recent pushes to provide them an opening in Brazil's oil industry, which for years had been dominated by state-run Petroleo Brasileiro SA PETR4.SA, or Petrobras.
Elsewhere in the region, Brazil at the time had fierce competition in the race to attract capital.
Business-friendly governments in Argentina and Ecuador were auctioning exploration blocks and working to lure foreign oil companies.
In Mexico, leftist President Andres Manuel Lopez Obrador had not yet taken office, and investors were still benefiting from free-market reforms that had opened up access to prized oilfields in the Gulf of Mexico.
In the last year, many of those competitors have effectively taken themselves out of the game.
Lopez Obrador, widely known as AMLO, halted a liberalization of Mexico's energy market. Protests and economic crises have undercut Argentina and Ecuador's would-be reformers.
By contrast, Bolsonaro has made dramatic strides toward expanding global energy firms' role in Brazil — with over a dozen bidders in back-to-back oil auctions next week expected to fetch around $28 billion in signing bonuses.
Some companies have said the terms look expensive.
But with fewer material options on the table, the world's oil heavyweights are likely to pony up.
"These are different markets, but the trend when you look at everything that's going on, is that Brazil is held in high regard," said oil and gas specialist Alexandre Calmon, a partner at law firm Tauil & Chequer.
BOLSONARO VS AMLO
Beyond the billions of barrels of oil becoming available off its coast, Brazil's new government has also been a beacon for foreign investment in the energy sector.
The previous government, under former President Michel Temer, had already taken key steps to open up Brazil's energy market, easing restrictions on equipment imports and creating a schedule for oil auctions, among other measures.
Since taking office in January, right-wing President Bolsonaro has doubled down, tapping free-market advocates to run the Economy Ministry and Petrobras.
They have overseen billions of dollars in asset sales, working to dismantle state control of fuel refining and distribution while opening former Petrobras fields to new players.
In Mexico, AMLO has suspended scheduled auctions and is focusing the strategy to boost output on contracts to oil service firms in which Pemex maintains firm control over oilfields.
Ecuadorian President Lenin Moreno has been weakened by protests. On Sunday, Argentines voted President Mauricio Macri out, returning leftists to power who have previously urged the nationalization of energy assets.
"The Brazilians have been very disciplined even after the government change. Petrobras ... has finally shown a coherent divestiture program," said Gonzalo Monroy, a Mexico-based energy analyst. "Mexico not only fell behind, it also changed its vision on the industry."
Next week could cement Brazil's ascendance, as 14 companies — a who's who of oil majors — will bid on Nov. 6 in Brazil's so-called transfer-of-rights (TOR) auction. Fixed signing bonuses total 106.5 billion reais ($26.4 billion).
The TOR area, which will be auctioned off in four pieces, is considered a rare prize, as it is already known to hold billions of barrels of untapped crude.
Still, others are warning that investors' appetites are not without limits. Executives at BP PLC BP.L and Portugal's Galp Energia SGPS SA GALP.LS have said that Brazil's oil rounds are getting expensive.
In an interview last week, Equinor's Brazil chief warned that Brazil was competing with countries all over the world - not just Latin America - for big oil's attention.
(For a graphic on Brazil's upcoming TOR auction: https://tmsnrt.rs/35YuObI)
Brazil's upcoming transfer-of-rights oil auctionhttps://tmsnrt.rs/35YuObI
(Reporting by Marta Nogueira and Gram Slattery in Rio de Janeiro and Marianna Parraga in Mexico City; Writing by Gram Slattery; Editing by Brad Haynes and David Gregorio)
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