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Petrobras may receive credit of US$ 14 billion for transfer of rights

Written by Paulo Nogueira
Published 09/01/2019 às 08:41

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petrobras pre-salt castello white
Petrobras admitted it may receive a credit of approximately US$14 billion under a long-awaited review of the transfer of rights agreement covering six fields in the Santos Basin pre-salt province. In a statement released on Tuesday, Petrobras said the $14 billion credit is one of many scenarios analyzed by the country's federal audit court, TCU, after a long negotiation process between the federal government and the oil company.

Potential agreement with the federal government may release the pre-salt round with excess volumes

Petrobras has admitted that it may receive a credit of approximately US$14 billion under a long-awaited review of the transfer of rights agreement covering six fields in the Santos Basin pre-salt province. In a statement released on Tuesday, Petrobras said the $14 billion credit is one of many scenarios analyzed by the country's federal audit court, TCU, after a long negotiation process between the federal government and the oil company.

Local news agency Valor PRO had anticipated the information on Monday afternoon, leading to a rise in the price of Petrobras shares.

After rising more than 3% on Monday, shares rose nearly 1% in early trading on the Brazilian stock exchange on Tuesday.

Brazil's new Minister of Mines and Energy, Bento Albuquerque, said last week that the government was hopeful of reaching an understanding on the transfer of rights within the next 100 days.

A potential conclusion on the amount to be paid to Petrobras, which is still pending analysis by the TCU and approval by the National Council for Energy Policy, as well as Petrobras directors and supervisors, may finally unlock pre-salt coverage, volumes surpluses in the rights transfer area.

The auction, which could fetch up to 100 billion reais ($26,9 billion) for the government with a signing bonus alone, will offer surpluses in areas that were transferred to Petrobras in September 2010, under an intricate oil-for- actions that provided leverage for the government to increase its stake in the state-owned company.

Upcoming assets that will go into production from now on

In return, Petrobras, now headed by CEO Roberto Castello Branco, won the right to produce 5 billion barrels of oil equivalent from the pre-salt fields of Búzios, Atapu, Sépia, Itapu, Sul de Lula and Sul de Sapinhoa.

However, these fields hold much more than that amount in recoverable reserves and the excess volumes would be offered to investors in a planned mega auction later this year.

Separate studies published by Gaffney Cline & Associates and DeGolyer & MacNaughton indicate that the six fields hold between 9,8 billion and 15,2 billion boe in addition to the initial 5 billion boe floor granted to Petrobras.

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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.

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