All blocks assigned under latest Brazil auction

All four blocks offered under Brazil’s 5th Production Sharing Round have been allocated, according to organizer ANP.

Offshore staff

RIO DE JANEIRO – All four blocks offered under Brazil’s 5th Production Sharing Round have been allocated, according to organizer ANP.

The Round raised R$6,82 billion ($1.68 billion) in signing bonuses and promises of R$1 billion ($247 million) in investments during the exploration phase, with goodwill of the profit oil offered set at 170.58%.

“It was the first production sharing round with more than one block on offer to have 100% of the areas acquired,” said ANP’s director general, Décio Oddone.

“With today’s goodwill, which averaged 170%, our expectation of raising royalties and taxes over the 35 years of the contracts rose from R$180 billion [$44.5 billion] to R$240 billion [$59.3 billion]. But the most important thing is to look at the total of the production sharing rounds since last year.

“The results of the 2nd to 5th rounds, considering the oil [price] at $70/bbl, will generate R$1.2 trillion [$296 billion] in revenue for the federal government, states and municipalities, or about R$40 billion per year [$9.88 billion].”

Petrobras had the right of first refusal to act as the operator, which it exercised in the case of the area of Sudoeste de Tartaruga Verde. The full awards were as follows:

Basin

Sector

Block

Signing bonus (R$) (fixed)

Winning company / consortium

Profit oil offered

Goodwill

Santos

SS-AUP1

Saturno

3,125,000,000.00

Shell Brasil (50%)*; Chevron Brasil Óleo (50%)

70.20%

300.23%

SS-AUP1

Titã

3,125,000,000.00

ExxonMobil Brasil (64%)*; QPI Brasil (36%)

23.49%

146.48%

SS-AUP2

Pau-Brasil

500,000,000.00

BP Energy (50%)*; Ecopetrol (20%); CNOOC Petroleum (30%)

63.79%

157.01%

Campos

SC-AP5

Sudoeste de Tartaruga Verde

70,000,000.00

Petrobras (100%)*

10.01%

0%

*Operator

Shell will pay around $390 million to operate the Saturno block.

“We are pleased to add another material, operated exploration position to our leading portfolio in one of the world’s most prolific deepwater areas,” said Andy Brown, the company’s Upstream Director.

As a result, Shell’s net acreage offshore Brazil is now around 2.7 million acres (10,926 sq km). It will discuss with Chevron how to proceed on exploration drilling in the Saturno area.

Next year Shell also plans to drill the Alto de Cabo Frio West and South Gato do Mato presalt fields in the Santos basin, and is proceeding with seismic studies to mature two exploration blocks awarded earlier this year.

10/01/2018

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