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Petrobras Seeks Compensation of US$ 6.4 Billion in Upcoming Onerous Assignment Auction Scheduled for November This Year
Petrobras informed in a relevant fact yesterday (09/04) that its Board of Directors approved the signing of an agreement with the Union that establishes the shares in each contract and the compensation amount of US$ 6.4 billion to the state-owned company in the event of bidding for the surplus volumes of the Onerous Assignment in the Sépia and Atapu fields, re-auctioned by the government.
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The Onerous Assignment contract, signed in 2010 between Petrobras and the Union, included the exercise of exploration and production activities in the Sépia and Atapu areas, with production volumes limited to 500 million barrels of oil equivalent (boe) in Sépia and 550 million boe in Atapu.
In the absence of bids in the auction under the sharing regime for the surplus volumes to the onerous assignment contract for the areas of Sépia and Atapu, in 2019, Petrobras and Pré-sal Petróleo (PPSA), qualified as a representative by the Union, negotiated more competitive conditions for carrying out a new auction of the areas, for the benefit of both parties.
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With the publication of MME Ordinance No. 23/2020, complemented by Ordinance MME No. 493/2021, Petrobras and PPSA reviewed and defined prior to the new auction the values of the compensations to be paid by the new contractor to Petrobras for the deferral of cash flow in the two areas, as well as the participation in the Onerous Assignment and sharing contracts, providing greater predictability and attractiveness to the auction.
After Technical Discussions, Petrobras and the Union Reached the Following Terms:
It is US$ 3.25 billion for Atapu and US$ 3.2 billion for Sépia. A total of 60.5% and 68.7% of the fields will be offered, respectively, in the upcoming onerous assignment auction scheduled for November.
The amounts of firm net compensations will be increased by a complement (earn out), due between 2022 and 2032, which will be collectible from the last business day of January of the year following the year in which the price of Brent crude oil averages more than US$ 40/bbl, limited to US$ 70/bbl. The earn out tables will be published by the Ministry of Mines and Energy, after the agreement is approved by the Minister. These complements have a one-year grace period for the payment of the first earn out installment, from 2023 to 2024, corrected at a rate of 8.99% per year.
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