LISBON: Portugal's Galp Energia , whose cherry-picking in Brazilian oil licensing auctions since the mid-2000s has left it with one of the most enviable portfolios of stakes in offshore oil fields there, says new licences are getting too pricey.

Galp will have to be extremely prudent and evaluate not just its estimated returns, but partnerships and access to assets with the right size in the major oil auction in the Santos basin planned for November, CEO Carlos Gomes da Silva said on Monday.

"The main statement here is that we will approach Brazil in a very careful way," he said on a conference call on the company's second quarter results.

He was speaking after Galp reported a 20% drop in second-quarter net profit, but slightly increased its pre-tax earnings estimate for this year thanks to growing oil output and higher oil prices.

"Brazil starts to be relatively expensive," he said, citing high signing bonuses estimated by the Brazilian organisers.

The auction could result in a signing bonus of nearly 21 billion reais ($5.54 billion), according to Brazil's state oil company Petrobras, which has been Galp's partner in various major oil finds. The auction comprises production sharing contracts for a total area of 1,385 square kilometers.

Galp has stakes in areas adjacent to two being offered, the Atapu and Sepia Leste.