Petrobras and Six More Foreign Oil Companies Eye the Bid for the Surplus Transfer Auction

Oil Companies Participated in Public Discussions About the Pre-Bid Notice for One of the Largest Auctions in History to Be Held by ANP This Year

The Auction of the Surplus from the Costly Assignment One of the Most Anticipated Auctions by the Market Continues to Mobilize Petrobras and Foreign Oil Companies Total, ExxonMobil, CNOOC, BP, Shell, and Petrogal.
The oil companies are actively participating in the discussions of the pre-bid notice for the auction, the most controversial point being how payment to Petrobras will be made to compensate it for the investments already made in the exploratory blocks of the costly assignment.

The Mega Auction Is a Bidding Process That Is Part of the Costly Assignment Agreement, under this 2010 agreement, Petrobras and the Union agreed that Petrobras would pay for the right to explore 5 billion barrels from the Pre-salt in the Santos Basin.
The surplus would be the portion that would be auctioned and would belong to Petrobras. This is the agreement that must be reached, as such a situation was not foreseen in the contract (the oil reserves have proven to be much higher than expected).

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Furthermore, Petrobras is set to receive approximately R$ 106 billion in signing bonuses, in addition to compensation for the investments already made in the area.
According to the pre-bid notice for the auction, the winners will sign a co-participation agreement with the Brazilian oil company in the fields of Búzios, Atapu, Itapu, and Sépia, in the Santos Basin.

Suggestions from the Oil Companies

Among the main suggestions proposed during the discussions of the pre-bid notice is that of ExxonMobil, which suggested that the signing bonus be paid in two installments, the first when the production sharing contract is signed, expected in March 2020, and the second on the date of the signing of the co-participation contracts.

The stance of the Chinese CNOOC is also only to make the payment of the bonus upon signing the co-participation contract.
The Chinese company wants to pay the bonus 15 days later, to avoid impacting the company’s cash flow.

The fact is that the oil companies and Petrobras have until 2021 to reach an agreement on the payment.

See Also! Peroá and Cangoá Fields Are the Current Targets of Petrobras’ Divestment Plan, Which Will Also Sell Its Stake in the New Discovery of Malombe.