Auction of oil exploration areas in Brazil yields $2.1 bi
The 16th bidding round of Brazil’s National Petroleum Agency today (Oct 10) yielded $2.1 billion in signing bonuses. Twelve of the 36 blocks offered in concessions for the exploration and production of oil and natural gas were won. Ten companies placed winning bids.
The total premium stood at 322 percent for signing bonuses and 390 percent for work units (areas for study before the exploratory phase) under the Minimum Exploratory Program (PEM in the original). The contracts, to be signed in February 2020, are expected to attract investments adding up to $366.2 million.
Viewed as having great potential the blocks in the Campos basin attracted consortiums and competing bids in some cases. Altogether, ten of the 13 local blocks were won.
For block C-M-541, with a minimum signing bonus of over $317.4 million, the consortium led by Total and QPI and another one led by Petrobras offered over $976 million in signing bonuses.
Even though the bonus offered by Petrobras/Equinor was nearly $14.6 million higher, the block was won by consortium Total/QPI, which included a thousand work units more in the PEM.
The dispute brought in a $1.65 billion signing bonus for the first sector in the Campos basin, SC-AP4, 331 percent higher than the minimum signing bonus—a difference referred to as premium.
In the second sector auctioned in the Campos basin, SC-AUP3, the dispute focused on C-M-661, won by $272.2 million, offered by Petronas, the only firm in the auction that did not have exploration and production contracts in Brazil yet. The bid included a 545.37 percent premium for the sector.
The third sector auctioned in the Campos basin, SC-AUP4 also held a dispute for one of its blocks, and the consortium formed by Shell, Chevron, and QPI won with a $134.2 million signing bonus and 206 work units. With a 310 percent premium, the sector yielded a nearly $146.5 million signing bonus.
Other basins
Despite also being regarded as having elevated potential, the Santos basin saw bids for only two of its 11 blocks offered. The bids totaled a 74.4 percent premium.
Basins Camamu-Almada and Jacuípe, whose auction was challenged by federal prosecutors in Bahia state, received no bids. In all, they comprised seven blocks and one area considered a new-frontier area, where there is less exploratory activity.
Also classified as new-frontier, the Pernambuco-Paraíba basin did not get any bids for its five blocks.
