Government sets signing bonus for pre-salt auction at US$26.9bn

According to Brazil’s Economy Minister Paulo Guedes, the government will require a US$26.9bn signing bonus for the auction of exceeding oil from the pre-salt oilfields scheduled for October 28. Interested parties must also compensate Petrobras for any prior investments in the blocs. The auction follows the settlement of a long-running dispute between Petrobras and the Brazilian government about the offshore oil area.

The winners of the pre-salt auction will have exploration rights for 35 years and during this period must supply between 19.82% and 27.65% of oil to the government. Four areas will be auctioned: Atapu, Búzios, Itapu, and Sépia. The company that offers the largest percentage of oil to the government will win the auction.

Petrobras has a preemptive right to maintain a 30% share in the fields to be auctioned. The company has thirty days to notify its intention to exercise this right. Official estimates suggest there are around 6bn to 15bn barrels of recoverable oil in the area.

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