The auction, conducted as police and the army clashed with hundreds of protesters objecting to the sale of natural resources to foreign companies, was notable because it sparked only a fraction of the appetite that was originally expected.

Despite government assurances that the discovery is huge and low risk, many major world oil companies that had shown strong interest in previous auctions, such as Exxon Mobil Corp (>> Exxon Mobil Corporation), Chevron Corp (>> Chevron Corporation) and BP Plc , stayed away.

"An auction supposes a contest," said Carlos Sampaio, an opposition legislator in the lower house of Brazil's Congress. "Without that, the government failed."

But government officials painted the sale as a success and said they expected $400 billion in state revenue from the Libra field over 30 years, cash they hope will transform the country, paying for education and health care needed to narrow a wide gap between rich and poor.

The winning group did include a surprise. France's Total SA (>> TOTAL) and Anglo-Dutch Royal Dutch Shell Plc , the only major non-state companies to sign up for the auction, took 40 percent of Libra.

While there are two Chinese partners, CNOOC Ltd (>> CNOOC Limited) and China National Petroleum Corp, they have the smallest share. That eased concerns of both left-leaning nationalists and free-market industry figures that Chinese or state-owned Asian companies would buy the biggest Libra stake.

"I don't think there is any problem with this being won by a single group," said Delcídio Amaral, a Senator with Brazilian President Dilma Rousseff's Workers' Party.

"Just when everyone was expecting Libra to be snapped up by the Chinese, Shell and Total show up, two top-quality experienced oil companies."

The consortium will be led by Petroleo Brasileiro SA (>> Petroleo Brasileiro Petrobras SA), as Petrobras is formally known, which took 40 percent of the field in the auction, more than the minimum 30 percent that it was guaranteed by law. The law also requires it to be the field's sole operator.

Total and Shell will each have 20 percent of the partnership, while China National Petroleum Corp and China's CNOOC took 10 percent a piece.

The group now holds the rights to an offshore area holding between 8 billion and 12 billion barrels of recoverable oil, according to Brazil's oil regulator and Dallas-based oil certification company Degolyer & MacNaughton (D&G).

If the estimates hold up Libra holds enough oil to nearly double Brazil's reserves or supply all the world's oil needs for as much as 19 weeks.

LACKLUSTER INTEREST

Highlighting the lackluster interest by most major oil companies in this potentially huge area, the companies agreed to give the government the minimum legal amount of so-called "profit oil" from the fields - or oil produced after initial investment costs are paid. Under the terms of a new production-sharing contract, that minimum was set at 41.65 percent of profit oil.

They also agreed to pay their share of the 15 billion real ($6.88 billion) up-front signing bonus to finalize the purchase.

Despite the huge potential of the offshore region, many foreign oil producers and other potential investors shied away because they believed the rules for the new concessions offered little upside for profit and too big a role for the government and Petrobras.

A newly minted state-owned oil company known as PPSA has been created to help manage Libra. In addition to receiving the government's share of oil from Libra and selling it on its own account, PPSA will have a major say and some veto power over how the consortium spends the $50 billion expected to be needed for developing the area.

In Libra, the government has worked to ensure it will get the lion's share of the resources. Despite the low bid, 85 percent of the revenue from Libra over its lifetime will go to the government as taxes, oil or direct social or research commitments from the winners, Rousseff said in a speech to the nation after the sale.

Efforts like this to control private investment have made in harder for Rousseff's government to attract private partners for other major projects such as high-speed rail, ports, highways and airports.

"The perception of Dilma (Rousseff) has become very negative, she and her government are believed to have a very arbitrary view of regulation," said Aldo Musacchio, an associate professor at Harvard Business School who specializes in Brazilian companies.

Magda Chambriard, the head of Brazil's national oil regulator ANP, suggested that many companies had stayed away because they were daunted by the sheer size of Libra.

"Even though there was limited interest, the quality of the (winning) group speaks for itself and leaves me wanting for nothing better," Chambriard said at a news conference. She said the next auction for Brazil's big subsalt region was not expected for at least another two years.

Chambriard had expected "more than 40" companies to sign up for the auction. Only 11 signed up and just five actually made bids as part of the single, winning consortium.

Shares of Petrobras, a company whose investors have grown increasingly frustrated by cost overruns and production delays, surged after details of the bid emerged and dispelled fears that the company would overpay. Its preferred shares rose more than 5 percent when the winning bid was announced.

The auction was the first under a three-year-old legal framework that expands state control over Brazil's most prolific oil region, the subsalt reserves off the coast of Rio that hold billions of barrels of oil under a thick layer of salt beneath the ocean floor.

(Additional reporting by Rodrigo Viga Gaier, Luciana Bruno and Maria Carolina Marcello; Writing by Paulo Prada; Editing by Todd Benson, Phil Berlowitz, Marguerita Choy and Joseph Radford)

By Jeb Blount and Sabrina Lorenzi