Oil Companies Associated with IBP Argued That Upcoming ANP Oil Auctions Should Be More Concentrated and Not Be Shared
After the absence of bids from foreign oil companies in the auctions for excess oil from the onerous assignment and in the 6th sharing round, the foreign companies associated with IBP (Brazilian Institute of Oil) issued a statement through the entity on Friday (November 8) advocating that the Brazilian government adopt a “less concentrated” bidding schedule in the sector and under a single regime, with this model being a concession.
Shell had already complained about the values charged as signature bonuses for the offered areas.
On November 6 (Wednesday), the auction for excess oil from the onerous assignment took place, collecting R$ 70 billion, of the R$ 106.5 billion expected, with bids only from Petrobras and the Chinese companies CNODC and CNOOC, which teamed up to purchase the Búzios area.
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The next day (November 7), the 6th bidding round also occurred in Rio de Janeiro, raising R$ 5 billion, of R$ 7.85 billion in required bonuses, and only one of the five offered blocks was auctioned, again by a consortium between Petrobras and the Chinese CNODC.
Experts believe the results of the onerous assignment mega-auction and the 6th round left much to be desired, and there has been much debate since then about the causes of these events.
The government itself has criticized the sharing system, considering it not ideal for the current oil market and hinted at possible changes to be discussed in congress.
Time for Change
In advocating for changes, the Brazilian Institute of Oil stated that it is time to think about the issue, “The non-participation of large global companies indicates the opportunity for adjustments to the existing rules,” says IBP’s statement, emphasizing that despite this, “the sector remains interested in the country.”
The statement from IBP also said, “Among the possible changes, the industry suggests a less concentrated auction calendar, a readjustment of the minimum participation conditions, as well as an adjustment of the risk profile concerning global opportunities.”
The most controversial point is indeed the auction model, and the companies associated with IBP advocate for the concession regime because in this model, despite paying a fixed signature bonus, the oil belongs entirely to the exploring company, which later pays only signature bonuses and royalties to the government.
In the less favored sharing regime, which the government has been using in the pre-salt area, the signature bonus is also fixed, but the company pays a surplus (%) in oil to the government, which is the deciding factor in determining the auction winner.
IBP’s associated companies include Equinor, Total, Petrogal, Wintershall, and the American company Exxon, which participated in the auctions, in addition to Petrobras and the Chinese CNODC and CNOOC.
Read also! After failure in negotiations with Exxon, Petrobras was isolated in auctions!

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