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Shell, Petrobras lead pre-salt auctions

By  Friday, 27 October 2017 20:18

Brazil held its 2nd and 3rd production sharing rounds concerning pre-salt areas today (27 October) where Shell and Petrobras were early winners.

Shell will participate in three blocks, and operate two, while Petrobras will serve as operator for three blocks. According to Brazil's National Agency of Petroleum, National Gas and Biofuels (ANP), said 75%, or three of four blocks offered in the 2nd round were awarded, and 75%, or three of four blocks offered were awarded in the 3rd round.

"Today's rounds confirmed the prospectivity of Brazil's pre-salt acreage and are a direct tangible result of the country's recent regulatory reforms," said Horacio Cuenca, research director for Latin America at Wood Mackenzie. "Recently the Brazilian government has enacted market-friendly reforms that have loosened restrictive local content rules and reduced the tax burden levied on exploration and production companies," the analyst firm said.

2nd round results

ANP said that the 2nd round generated approximately US$1.05 billion (BRL 3.3 billion) in signature bonuses and US$93.4 million (BRL 304 million) in planned investments. Under current legislation, Petrobras has the right of first refusal to act as an operator in the pre-salt blocks.

Petrobras opted to serve as operator for the Sapinhoá Surrounding block in the Santos Basin in sector SS-AUP2. Petrobras (45%, operator) bid for the block in consortium with Shell Brasil (30%) and Repsol Sinopec (25%).

Shell (80%, operator), in consortium with Total (20%), won the Sul de Gato do Mato (Wildcat South) block in the Santos Basin, also in sector SS-AUP2. 

It was announced earlier today that a consortium of Statoil, ExxonMobil and Galp had won the Carcara North block.

3rd round results

According to ANP, the 3rd pre-salt round generated generated approximately US$876 million (BLR 2.85 billion) in signature bonuses and will bring in approximately US$140 million (BRL 456 million) in investments.

A consortium of Petrobras (40%, operator), CNODC Brasil Petróleo e Gás Ltda. (20%) and BP Energy do Brasil Ltda. (40%) won the Peroba block in the Santos Basin in sector SS-AUP2. 

A consortium of Shell (55%, operator), CNOOC Petroleum (20%) and QPI Brazil (25%) won the Alto de Cabo Frio Oeste block in the Santos Basin, in sector SS-AP1.

A consortium of Petrobras (50%, operator) and BP Energy (50%) won the Alto de Cabo Frio Central block in the Campos Basin in sector SC-AP5.

"We are very pleased to expand our number of operated fields in Brazil,” said Andy Brown, Upstream Director, Shell. “These winning bids were submitted after our thorough evaluation and add strategic acreage to our already leading set of global deepwater growth options." 

Shell said that prior to these bid results, the supermajor had previously planned for a $10 billion investment into the early 2020s for its existing offshore developments in Brazil to support deepwater as its upstream growth priority.

Image: The public offering session held on 27 October. Photo from ANP.

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2018-09-24 06:51:23am