Announced by the Temer government in December 2018, a new mega-auction for the exploration of pre-salt basins is about to be carried out. The expected date is November 6, 2019.
For those who do not know exactly what the “pre-sal” is, I refer to this article (in Italian), which very clearly describes its potential:
The mega-auction will involve four areas of the Santos basin and will see the participation of 14 companies from 11 different countries, all already pre-approved by the ANP (National Petroleum Agency):
1 – BP Energy do Brasil Ltda. (UK)
2 – Chevron Brasil Oil and Gas Ltda. (USA)
3 – CNODC Brasil Petróleo and Gás Ltda. (China)
4 – CNOOC Petroleum Brasil Ltda. (China)
5 – Ecopetrol Oil and Gas of Brazil Ltda. (Colombia)
6 – Equinor Brasil Energia Ltda. (Norway)
7 – ExxonMobil Exploration Brazil Ltda. (USA)
8 – Petrogal Brasil S.A. (Portugal)
9 – Petrobras (Brazil)
10 – Petronas Petróleo Brasil Ltda. (Malaysia)
11 – QPI Brasil Petróleo Ltda. (Qatar)
12 – Shell Brasil Petróleo Ltda. (UK)
13 – Total E&P do Brasil Ltda. (France)
14 – Wintershall DEA do Brasil Exploration & Production Ltda. (Germany)
The estimated production of the four fields is 1.2 million barrels per day, according to the ANP. The government plans to raise about 106.5 billion dollars through the offers. The production potential of the areas will also be able to generate revenues from the Brazilian public coffers for 52.5 billion dollars a year starting from 2024, through royalties on production. The value is very close to what is collected in royalties and investments from the entire Brazilian oil industry in 2018: US $ 55.2 billion.
The expectation of the ANP is that ten new platforms will be built, with an extraction capacity of 150,000 barrels a day each. The hypothesis is that they start to work gradually starting from 2024, reaching the peak of production in the following decade. The construction and management of the plants should generate an investment by the winning companies of about 1.7 trillion dollars by 2030.
The four areas offered are considered “development areas”, ie without exploration risk, since Petrobras has already confirmed the existence of large oil reserves; for this reason they are particularly sought after.
In this mega-auction the companies that will offer the largest share of oil profits to the Brazilian state (share of net profits after the amortization of investments) will win.
For the Atapu basin, a minimum oil profit index of 26.23% was established; for the Sépia basin, 27.88%; for Buzios, 23.24%; and for Itapu, 18.15%.
The fixed bonus at the time of signing the contract is R $ 13.7 billion for the Atapu area, R $ 22.8 billion for Sèpia, R $ 68.2 billion for Buzios and R $ 1, 76 billion for Itapu.
A negotiation at the political level is underway for the distribution of 106 billion dollars, the result of the sale: for the moment, 70% should go to the Union (federal level), 15% to the States and 15% to the municipalities.
The TCU (Brazilian Court of Auditors) has approved the construction of the auction, giving greater legal security to the companies interested in purchasing.