1. Home
  2. /
  3. / He finished! Shell destroys in pre-salt auctions and has now become one of the largest oil companies in Brazil
reading time 4 min read Comments 15 comments

He finished! Shell destroys in pre-salt auctions and has now become one of the largest oil companies in Brazil

Written by Paulo Nogueira
Published 27/10/2017 às 14:05


shell and petrobras

Other oil giants won 6 areas, with Petrobras and Shell leading the auctions, leading Brazil to a new era!

[supsystic-social-sharing id='1′]The government managed to raise BRL 6,15 billion in signing bonuses (amount paid upon signing the concession contract) with the auctions of the 2nd and 3rd pre-salt rounds, he informed the ANP (National Agency for Petroleum, Natural Gas and Biofuels). The forecast was to collect R$ 7,75 billion. Of the eight areas for exploration and production of oil and natural gas offered in the auctions this Friday (27), two did not receive bids. Check out the companies that won each area:

  • South of Gato do Mato: Shell and Total
  • Around Sapinhoá: Petrobras, Repsol Sinopec and Shell
  • North of Carcará: Exxon Mobil, Statoil and Petrogal
  • Peroba: Petrobras, BP and CNODC
  • Alto de Cabo Frio Oeste: Shell, CNODC and QPI
  • Alto de 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 (the equivalent of around R$ 120 billion), in addition to around US$ 130 billion in royalties, profit oil and income tax resulting from the development phase of the reserves, estimated at more than 4,5 billion barrels of oil – more than a third of the country's proven reserves.

Auction started late

The auction, scheduled to start at 9 am, only started two and a half hours late. This is because, on Thursday night (26), the Federal Court of Amazonas suspended the holding of the two pre-salt auctions through an injunction (provisional decision).

The argument of the action was that the value of BRL 7,75 billion in signature bonuses with the auctions represents little more than half of the bonus of the Libra bid (result of the "1st round" of bids), which was BRL 15 billion. Thus, there would be no plausible justification for the values ​​to be so low and so harmful to public property.

In the decision, federal judge Ricardo de Sales suspended the auctions in order to avoid “any possibility of damage to public property, especially in view of the amounts involved”.

In the morning, the AGU (Attorney General of the Union) appealed to the Federal Regional Court of the 1st Region against the injunction. The request was accepted by the court and allowed the auction to begin.

When opening the auction, the general director of the ANP, Décio Oddone, said that the government “was successful against political acts that sought to prevent” the negotiation. According to him, with this event, Brazil “definitely takes back its place in the world's first oil league”.

Shell celebrates victory

The result of the auction was considered excellent by the CEO of Shell in Brazil, André Araújo, who celebrated the fact that the company is operating two areas.

According to him, Shell's bids in the pre-salt consolidate the company's position in Brazil. The Anglo-Dutch won in three areas. “Our participation was super active, I am extremely happy and we will be operators in two blocks, which is extremely important for us”, he told journalists.

New rules

The last auction of pre-salt areas had been in 2013, with the bidding of the Libra area. At the time, Petrobras was required by law to be the sole operator of the pre-salt fields, with a stake of at least 30% in the winning consortium, and it was the only company responsible for conducting and executing, directly or indirectly, all exploration, evaluation, development and production activities.

With the changes made by the government in the pre-salt regulatory framework last year, Petrobras is no longer obliged to act as the sole operator in these areas. However, the new law maintained the state-owned company's preemptive right to acquire at least a 30% stake in consortia and the possibility of carrying out its operations.

In addition, the extension of Repetro (Special Regime for Taxation of the Petroleum Chain) is also considered fundamental for the resumption of the country's oil industry. Added to this are economic economic factors, such as lower inflation and lower interest rates.

With this scenario, the auction caught the attention of the world's oil giants. Among the 16 companies qualified 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 biddings, the company that offers the State, based on a fixed minimum percentage, the largest slice of oil and natural gas discounted the cost of production, the so-called profit-oil, wins. “The bids will be judged and classified according to the decreasing order of surplus oil for the Union, with the bidder that offers the highest percentage for the Union being declared the winner”, informed the ANP.

14nd round

With less attractions compared to this Friday's rounds, the 14th Bidding Round for exploratory blocks, held at the end of last month, collected R$ 3,84 billion in signature bonuses - the largest in the history of auctions, with an average premium of 1.556,05%.

However, only 37 of the 287 blocks offered were auctioned, distributed in 16 sectors of eight sedimentary basins: Parnaíba, Potiguar, Santos, Recôncavo, Paraná, Espírito Santo, Sergipe-Alagoas and Campos. Source: Uol

Last Most voted
View all comments
Paulo Nogueira

With a technical background, I worked in the offshore oil and gas market for a few years. Today, my team and I are dedicated to bringing information from the Brazilian energy sector and the world, always with credible and up-to-date sources.

Share across apps
We would love your opinion on this subject, comment!x