Oil auction exceeds expectations

The Minister of Mines and Energy, Bento Albuquerque, and the general director of the National Agency of Petroleum, Natural Gas, and Biofuels (ANP), Décio Oddone, said today (10/10), in Rio de Janeiro, that the 16th Bidding Round exceeded all expectations, raising R$8.9bn in signature bonuses, a record value in Brazil for oil and gas exploration and production auctions under the concession regime.

Twelve of the 36 blocks offered were sold, and even then, the auction had a 322% premium, as the sum of the minimum expected signing bonus amounts was about R$3bn.

The minister said that the result shows the right policies have been made for the sector. “I believe we are on the right track so that the country can use its wealth and generate jobs, income, and development,” said Bento Albuquerque. He predicts that the upcoming auctions in November will have effective participation by Petrobras and several international companies.

ANP general director Décio Oddone stressed that the signing bonus is the most visible part of the success of the round and drew attention to other indicators. “The most important is the collection that will come later. We are sure that the investments will be made. There are 10 companies that will operate in these blocks, which gives us the certainty that there will be no shortage of financial, human, and material resources,” he said.

Production can reach 500,000 barrels of oil/day

ANP estimates indicate that the auctioned blocks should generate a production of 400,000 to 500,000 barrels of oil per day, which will produce a collection of R$100bn to the public coffers throughout the concession contract. Three or four new platforms are expected to be installed as a result of these contracts.

All the blocks are in areas with more consolidated geological knowledge, 10 of them in Campos Basin and two in Santos Basin. The blocks in areas considered of new frontier did not receive offers, but will be included in the ANP’s permanent offer, being available to companies that are interested later.

“In the permanent offer, companies will have time to evaluate. We do not expect to attract a very large investment for border basins in an auction like this,” he said.

Among the blocks that did not receive offers are the Camamu-Almada and Jacuípe basins, whose auction was questioned by the Federal Prosecutor of Bahia for potential risks to the Abrolhos Marine National Park in case of leaks.

The Minister of Mines and Energy, Bento Albuquerque, said he believes that the decision to participate or not in the blocks is a strategic matter for the companies and noted that other blocks did not receive offers either, including three from Campos Basin, nine from Santos Basin, and five from the Pernambuco-Paraíba Basin.

“The process, as the [ANP] Director-General himself put it, was done in accordance with the legal system and with the participation of the institutions,” he argued.

Source: Agência Brasil

Sharing is caring!