Other Oil Giants Auctioned 6 Areas, With Petrobras and Shell Leading the Bidding, Taking Brazil to a New Era!
[supsystic-social-sharing id=’1′]The government raised R$ 6.15 billion in signing bonuses (the amount paid upon signing the concession contract) from the auctions of the 2nd and 3rd rounds of the pre-salt, the ANP (National Agency of Petroleum, Natural Gas and Biofuels) reported. The forecast was to raise R$ 7.75 billion. Of the eight areas offered for oil and natural gas exploration and production in this Friday’s (27) auctions, two received no bids. Check out the companies that won each area:
- South of Gato do Mato: Shell and Total
- Surrounding Sapinhoá: Petrobras, Repsol Sinopec, and Shell
- North of Carcará: Exxon Mobil, Statoil, and Petrogal
- Peroba: Petrobras, BP, and CNODC
- High of Cabo Frio West: Shell, CNODC, and QPI
- High of Cabo Frio Central: Petrobras and BP
- Southwest of Tartaruga Verde: no bids
- Pau Brasil: no bid
The ANP predicted that the eight blocks would generate US$ 36 billion in investments (equivalent to about R$ 120 billion), in addition to around US$ 130 billion in royalties, profit oil, and income tax resulting from the development phase of reserves estimated at over 4.5 billion barrels of oil – more than one-third of the country’s proven reserves.
Auction Started Late
The auction, scheduled to start at 9 AM, only began two and a half hours late. This was because, on Thursday night (26), the Federal Court of Amazonas suspended the two pre-salt auctions via a decision (preliminary ruling).
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Civil Defense issued a storm alert with risk of flooding in Santa Catarina, and intense rain may hit the state between Tuesday and Wednesday with wind gusts and hail.
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Climate records from trees, corals, sediments, and caves show that the current warming is the only one in the last 2,000 years to affect the entire planet at the same time and advance faster than any natural change ever recorded, something that did not occur even during the Medieval Warm Period.
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Surrounded by the Atlantic and the Amazon estuary, Marajó Island is losing land to the sea at a rate recorded by satellite, while saltwater is already invading the wells that supply riverside communities, and the process is advancing without any national adaptation plan addressing the most vulnerable inhabited archipelago in Brazil.
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South of Mato Grosso do Sul, southern São Paulo, Sul de Minas, and the Mantiqueira Mountains enter the most critical cold zone, with above-normal heat before the polar air mass, a sharp drop in temperatures during the early mornings, and an increasing risk for crops, vegetables, coffee, and low-lying areas.
The argument for the action was that the amount of R$ 7.75 billion in signing bonuses from the auctions represents just over half of the bonus from the Libra bidding (from the “1st round” of auctions), which was R$ 15 billion. Thus, there would be no plausible justification for such low and damaging values to public assets.
In the ruling, Federal Judge Ricardo de Sales suspended the auctions to prevent “any possibility of damage to public assets, especially in light of the values involved.”
In the morning, the AGU (Attorney General’s Office) filed an appeal with the Federal Regional Court of the 1st Region against the preliminary ruling. The request was granted by the court and allowed the auction to proceed.
When opening the auction, the ANP’s general director, Décio Oddone, stated that the government “was successful against political acts that sought to block” the negotiation. According to him, with this event Brazil “definitely regains its place in the first league of world oil.”
Shell Celebrates Victory
The auction result was considered excellent by Shell’s CEO in Brazil, André Araújo, who celebrated the fact that the company is operating in two areas.
According to him, Shell’s bids in the pre-salt solidify the company’s position in Brazil. The Anglo-Dutch company won in three areas. “Our participation was superlative, I am extremely happy, and we will be operators in two blocks, which is extremely important for us,” he told reporters.
New Rules
The last auction of pre-salt areas took place in 2013, with the bidding for the Libra area. At that time, Petrobras was legally required to be the sole operator of pre-salt fields, with at least a 30% stake in the winning consortium, and was the only company responsible for conducting and executing all exploration, evaluation, development, and production activities, directly or indirectly.
With the changes made by the government to the pre-salt regulatory framework last year, Petrobras is no longer required to act as the sole operator in these areas. However, the new law maintained the state-owned company’s right of preference to acquire at least a 30% stake in the consortia and the possibility to conduct its operations.
Additionally, the extension of Repetro (Special Taxation Regime for the Oil Chain) is also considered fundamental for the recovery of the country’s oil industry. Added to this are conjunctural economic factors, such as low inflation and falling interest rates.
In this scenario, the auction attracted the attention of oil giants worldwide. Among the 16 companies authorized by the ANP to participate in the auction were the American Exxon/Mobil and Chevron, the Spanish Repsol, the British Shell, the French Total, the Norwegian Statoil, and the Chinese Cnooc and CNPC.
In sharing auctions, the company that offers the state, starting from a fixed minimum percentage, the largest share of oil and natural gas after deducting the production cost, known as profit oil, wins. “The offers will be evaluated and ranked according to the descending order of the surplus oil for the Union, with the bidder offering the highest percentage for the Union being declared the winner,” the ANP reported.
14th Round
With less attractive options compared to the rounds on Friday, the 14th Round of exploratory block auctions, held at the end of last month, raised R$ 3.84 billion in signing bonuses – the highest in the history of the auctions, with an average premium of 1,556.05%.
However, only 37 of the 287 blocks offered were auctioned off, distributed across 16 sectors of eight sedimentary basins: Parnaíba, Potiguar, Santos, Recôncavo, Paraná, Espírito Santo, Sergipe-Alagoas, and Campos. Source: Uol

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