Brazil looking to open presalt region to newcomers

Sept. 23, 2019

Offshore staff

LONDONBrazil’s Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP) hopes three forthcoming licensing rounds will increase the diversity of upstream oil and gas operators present in Brazil, according to GlobalData.

The consultant’s analysis suggests the 6th PSA Round and the Transfer of Rights Round will likely boost the number of IOCs designated as an operator in the presalt region, which remains the country’s key growth area.

In 2016, Congress voted for private oil companies to be the operator in the presalt, although Petrobras retains the right of first refusal for operatorship and to take a share of 30% or more in license awards.

Alessandro Bacci, Oil and Gas Analyst at GlobalData, said: “Increasing the number of operators will create a more economically resilient presalt oil and gas sector because it wouldn’t be linked to the financial performance of just one company, which in case of financial difficulties could be forced to postpone projects.

“The financial position of Petrobras has opened up additional opportunities, and there is an interesting alignment between the ANP’s and the IOCs’ goals.”

Brazil’s recent presalt rounds have attracted BP, ExxonMobil, Royal Dutch Shell, and Equinor, which are all now operators. The 6th PSA round and Transfer of Rights Round will offer operatorships and up to 100% interests in four of the nine blocks on offer.

Bacci said: “Large resources, hydrocarbons quality, reduced lifting costs, and the recent successful licensing rounds, suggest a positive outlook.

“However, there is a potential risk in holding three rounds in a period of just two months, as potential investors will have a limited time to assess the opportunities.”