Brazil’s oil giant Petrobras has acquired seven blocks in the 14th Round of Bids under the Shared Production regime, six of which offshore and one onshore Brazil.
The bidding round was held on Wednesday by the National Agency of Petroleum, Natural Gas and Biofuels (ANP).
The ANP said earlier this week that the round had 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. It is worth noting that out of the 287 blocks available, 110 of those offshore, 37 blocks were acquired by oil companies.
Petrobras will be the operator in all blocks acquired, including the offshore blocks, where it will hold 50% participation, in partnership with ExxonMobil, the state-owned company informed on Wednesday.
The total amount of the signature bonus to be paid by Petrobras is R$1.8 billion ($565.6M), which represents 0.8% of the investments foreseen in the 2017-2021 Business and Management Plan, and will be reallocated within the currently approved budget.
In addition to the signature bonus, the judgment criteria also considered in the public sale was the Minimum Exploration Program (EMP) to be applied on the block, expressed in Work Units (UTs) – covering the number of wells to be drilled, and the seismic extension to be employed during the exploratory activity.
Petrobras said it acted selectively in the auction, reflecting its strategic vision and marking the beginning of the recomposition of its exploratory portfolio, which seeks to recover the relationship between reserves and production and ensure the sustainability of the company’s future oil and gas production. In addition, the operation in consortia is aligned with the strategic objective to strengthen partnerships, sharing risks, combining technical and technological skills and capturing synergies.
In the Campos Basin, Petrobras acquired in partnership with ExxonMobil, the six sector blocks of the SC-AP3 sector, located in deep waters. Both companies identified a great geological potential in these areas which supported their competitive proposals, Petrobras noted. This was the most disputed sector in the public sale, having attracted interest from six other companies (Shell, Repsol, Total, BP, CNOOC and Karoon). A total of 13 bids were submitted in the competition for the blocks of this sector.
In the Paraná Basin, Petrobras acquired 100% of an onshore block at a new exploratory frontier area, with the expectation of discovering natural gas deposits in the vicinity of the Brazil-Bolivia gas pipeline. The block is located in the central part of the basin, close to the most developed region of South America, with high energy demand and inserted into the country’s largest consumer hub.
After the auction held on Wednesday, there will be the qualifying stage of the winning bidders and subsequent signing of the contracts.
In addition to the 14th Round, with areas in the post-salt, the ANP will hold, on October 27, the 2nd and 3rd Pre-Salt Bidding Rounds. The ANP recently revealed the list of companies that had qualified for the participation in the pre-salt rounds.