Brazil's government will auction rights to develop mammoth
offshore oil and gas blocks in this year. The first auction of presalt fields
could be held in the second half of the year, although new legislation on how
much would be charged as a royalty on production, and how that money would be distributed among state and municipal governments would have to be
approved first.
A number of mammoth oil fields have been discovered off the southeast coast of
Brazil, lying in ultra-deep water and below more than three miles of sand,
rocks and a shifting layer of salt. The area is estimated to hold between 50
billion and 100 billion barrels of oil.
The auction is expected to include some of the reserves
discovered in the massive Libra area, estimated by Brazil's Oil Regulatory
Agency ANP to hold recoverable reserves of between 3.7 billion and 15 billion
barrels of oil equivalent. These fields will be handed over under
different terms from the more traditional concessions used in the oil.
Final approval for
the planned 2011 auctions is still required from the country's National Energy
Policy Commission, or CNPE, which will also define exactly which areas will be
put up for auction.
Why Pre-salt
auctioning?
The only way for Brazil to make the most of its oil reserves
is by farming out contracts to international exploration firms with the
expertise and technology to break through the deep, compressed salt layer. But
before Brazil opens up its reserves and takes bids from oil industry giants,
the country’s parliament is hoping to secure Brazil’s financial future by
ensuring the Petrobras, which owns a majority stake in the oil in question,
benefits from any oil extraction programme.
The government, which owns Petrobras, will fund the exploration
of pre-salt oil to the tune of $200-$220 billion (£140 billion), and will allow
the firm to enter into any number of joint ventures with third parties capable
of extracting oil. However, one of the major stipulations is that Petrobras will
maintain a minimum of 30 per cent share in every exploration agreement it
enters into.
Key Brazilian deal in last 3 years
Announce Date
|
Heading
|
Deal Value ($MM)
|
01-10-2010
|
Sinopec acquires 40% interest in Repsol’s Brazilian
business
|
7,109
|
11-03-2010
|
Devon Energy divests Brazilian operations to BP
|
3,200
|
21-05-2010
|
Sinochem acquires 40% interest in Peregrino oil field
from Statoil
|
3,070
|
23-12-2010
|
SK Energy divests Brazilian operations to Maersk
|
2,400
|
04-03-2008
|
StatoilHydro acquires interest in Brazilian oil property
from Anadarko
|
1,800
|
27-11-2007
|
OGX awarded eleven exploration blocks in Brazil
|
754
|
