Shell, Chevron, ExxonMobil, BP take acreage offshore Brazil

Oil majors Shell, Chevron, ExxonMobil, and BP were among successful bidders for offshore acreage offered in Brazil on Friday as part of the 5th Production Sharing Round.

The Brazilian ANP had offered four blocks Saturno, Titã, Pau-Brasil e Sudoeste de Tartaruga Verde. All blocks were acquired. The Round raised R$6,82 billion in signing bonuses and R$ 1 billion in planned investments on the exploration phase.

In the bids under the production-sharing regime, the winning companies are those who offer the Brazilian State, from a minimum percentage set in the tender protocol, the largest portion of oil and natural gas produced (i.e., the largest portion of profit oil). The signing bonuses, also defined in the tender protocol, are fixed.

According to the law in force, Petrobras has the right of first refusal to act as the operator in blocks of the pre-salt and those considered strategic. The company opted to be the operator, with a 30% share, in the area of Sudoeste de Tartaruga Verde.

See below the results and the winners of the round:

Shell and Chevron won a 35-year production sharing contract for the Saturno pre-salt block located off the coast of Brazil in the Santos Basin for a signing bonus of 3,1 billion Brazilian reals, or around $780 million.

Andy Brown, Upstream Director, Royal Dutch Shell said: “We are pleased to add another material, operated exploration position to our leading portfolio in one of the world’s most prolific deep-water areas.”

Shell said that with the addition of the Saturno block (Shell 50% operating, Chevron 50%), Shell increased its total net acreage off the coast of Brazil to approximately 2.7 million acres.

U.S. major ExxonMobil teamed up with Qatar Petroleum, and won the Titã exploration block for the same fee as the one paid by Shell and Chevron, however, the split here is not even; its 64% for Exxon who will be the operator and 36% for Qatar Petroleum.

According to ExxonMobil, the block awarded added more than 71,500 net acres to the ExxonMobil portfolio, expanding the company’s total position in the country to approximately 2.3 million net acres.

Steve Greenlee, president of ExxonMobil Exploration Company said: “With the acquisition of this block, we continue to increase our holdings in Brazil’s pre-salt basins, which are high-quality opportunities that enhance ExxonMobil’s global portfolio. These resources will benefit from ExxonMobil’s considerable capabilities, which we will employ as we explore and develop them with our co-venturers and the government.”

ExxonMobil subsidiary ExxonMobil Exploração Brasil Ltda. has interests in a total of 26 blocks offshore Brazil and is the operator of 66 percent of its net acreage.

BP partnered with Colombia’s Ecopetrol and China’s CNOOC for the Pau Brasil block, offering in total around $123 million for the acreage.