Brazil sells 37 blocks to 17 oil firms. Exxon, Petrobras JV submit largest bid

Brazilian oil and gas regulators on Wednesday held the 14th bidding round for oil and gas exploration blocks, and it broke some cash records.

Namely, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) said the round, in which 20 companies took part, had the largest total signature bonus in history – over R$ 3.8 billion – and the two biggest offers for blocks – around R$ 2.24 billion and R$ 1.2 billion.

“The success of the auction reflects the regulatory changes made by the Brazilian government, which have made the business environment more attractive to companies of different sizes,” ANP said.

For the 14th Bidding Round, some rules of the Brazilian concession regime were simplified, such as: the adoption of a single exploration phase and the possibility of extending it due to technical reasons; the removal of local content as a bidding criteria; distinct royalties for new frontier areas and mature basins of greater risks; and incentives to increase the participation of small and medium-sized companies.

During the opening of the public session, the ANP Director General, Décio Oddone, stated that the occasion is “a historic day to the oil and gas sector in Brazil. This bidding round marks a new beginning of investments, after the biggest crisis this sector had ever experienced in Brazil.”

While the ANP has described the auction as a success, it’s worth noting that 37 blocks were acquired by the oil companies, out of the 287 blocks available, 110 of those offshore.

Interestingly, ANP had offered 76 offshore blocks in the Santos basin, the second largest producer of oil and the first of natural gas in Brazil. The bid came from Australia’s Karoon.

The projection for investments of the Minimum Exploratory Program (series of activities to be carried out by the companies in the first phase of the contract) is R$ 845 million.

In total, 20 companies from eight countries participated in the bid. Seventeen of them acquired blocks, of which ten are Brazillian and seven are from other countries. The signing of contracts is expected to occur until January 31, 2018.

The total acquired area was 25,011 km2. The blocks acquired are distributed in 16 sectors of eight sedimentary basins: Parnaíba, Potiguar, Santos, Recôncavo, Paraná, Espírito Santo, Sergipe-Alagoas and Campos.

The largest signature bonus was R$ 2.24 billion, offered for block C-M-346, of the Campos basin, by the consortium formed by Petrobras (50% – operator) and ExxonMobil Brasil (50%).

Offshore Energy Today Staff

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