Petrobras is highest bidder in Round 5

Brazil's fifth annual bidding round attracted only one bid per block on average. Petrobras won 85 offshore blocks in the Santos, Jequitinhonha, and Espirito Santo basins out of a total of 908 areas on offer. Last year, Brazil sold 21 areas out of 54 on offer, but the new system has smaller blocks than previous years.

Brazil's fifth annual bidding round attracted only one bid per block on average. Petrobras won 85 offshore blocks in the Santos, Jequitinhonha, and Espirito Santo basins out of a total of 908 areas on offer. Last year, Brazil sold 21 areas out of 54 on offer, but the new system has smaller blocks than previous years.

The only foreign winners were Newfield Exploration with two blocks in the offshore Santos basin and Denmark's Mærsk Olie og Gas AS with two shallow-water blocks in the Santos basin, including one with Petrobras.

Only 11 companies qualified to participate in Round 5 – Aurizonia Empreendimentos, Cepsa, Esso, Maersk Olie, Statoil, Kerr-McGee, Newfield Exploration, Occidental International, Partex Oil and Gas, Starfish Oil & Gas, and Petrobras. Twenty-nine companies qualified to participate in the previous round.

The drop in participation was not unexpected as oil companies have complained about the small number of oil finds in Brazil. Of the oil finds, most have been heavy oil in deepwater, which costs too much to develop.

Prior to the opening of Round 5, the National Petroleum Agency board of directors decided, based on the recommendation of the environmental agency of Brazil Ibama approved by the Ministry of Mines and Energy and by the Ministry of the Environment, to withdraw the following Espírito Santo basin blocks from Brazil Round 5:
• SES-AR1. All 77 blocks withdrawn
• SES-AR2. Seventy-seven of the 98 blocks originally offered withdrawn. The blocks remaining for bidding are ES-M-391, 392, 393, 394, 395, 420, 421, 422, 423, 446, 447, 448, 449, 474, 475, 476, 477, 502, 503, 504, and 505
• SES-T2, SES-T4, SES-T6. Eight of the 68 blocks offered are withdrawn, which are blocks ES-T-454, 306, 227, 142, 455, 241, 189, and 108.

08/21/03

More in Regional Reports