Brazil's government has confirmed it had awarded five of the world's biggest oil firms the right to develop an offshore field that could hold up to 12 billion barrels of oil.

The consortium included Shell, Total, two Chinese firms and Brazil's state-run petroleum company Petrobras.

It was the first auction held under a new legal framework which is meant to give Petrobras and Brazil more control over its finds in recent years, oil buried deep under water and a formidable layer of salt, which constitutes reserves that could hold up to 100 billion barrels.

But about 300 demonstrators calling for nationalisation of Brazil's oil industry clashed with police outside the hotel where the bidding took place before the auction, with riot police firing tear gas and rubber bullets.

The protest was originally called by striking oil workers, whose union has long opposed any foreign involvement in Brazil's petrol production.

However, the government of President Dilma Roussef maintains that the rules governing the consortium are a huge advance for Brazil's interests and the expertise and capital necessary to develop such inaccessible reserves necessitates partnerships with foreign companies.

It also said that the income from the fields is necessary to pay for much-needed medical and social services.

The five firms won 35-year concessions, with Petrobras taking a 40 per cent stake, more than the minimum required by the terms of Brazil's offer.

Business critics had contended that the law, which mandates Petrobras as the sole operator of the finds and maintain a minimum 30 per cent stake, will scare off big private firms.

Petrobras holds a 40 per cent stake in the successful consortium, Shell and Total 20 per cent and Chinese firms CNOOC and CNPC 10 per cent each.

Brazilian Finance Minister Guido Mantega praised the auction's outcome.

"The government is very satisfied," he said.

He continued that the "high-level" firms had experience in "exploiting this oil in the shortest time possible, which is what we are interested in."

The reserves lie 185 miles offshore in the Atlantic, more than a mile below the ocean's surface and under another 2.5 miles of earth and corrosive salt.