Brazilian state-owned oil company Petrobras and Norway’s Equinor have emerged as winners in Brazil’s recent pre-salt oil block auction. Petrobras and Equinor each acquired a block individually and collaborated on a third. Australia’s Karoon Energy gained one block, and a consortium comprising China’s CNOOC and Sinopec secured another.
Brazil’s pre-salt area, known for its deep-water fields beneath a thick salt layer, is a crucial element of the country’s oil production. Discoveries in this region nearly 20 years ago propelled Brazil into the ranks of leading global oil producers. In August this year, bp announced a significant hydrocarbon discovery at the Bumerangue prospect in Brazil’s offshore Santos Basin.
The exploration well intersected a substantial hydrocarbon column in a high-quality pre-salt carbonate reservoir. The significant pre-salt discovery has reignited interest in the area, raising expectations for the auction. However, two of the seven blocks available received no bids, and out of the 15 companies registered, only eight participated. Major oil and gas companies such as Shell and bp abstained from bidding.
The auction’s terms required fixed signing bonuses, with blocks awarded based on the percentage of oil production offered to Brazil’s government. A consortium comprising Petrobras and Equinor acquired the Jaspe block, outbidding a Chevron and QatarEnergy consortium by offering 32.9% of the profit oil.
Petrobras independently secured the Citrino block with a 31.2% offer, while Equinor won the Itaimbezinho block with a 6.9% bid, noted as the lowest in the auction. Karoon Energy offered 14.1% for the Esmeralda block and the CNOOC/Sinopec consortium bid 9% for the Ametista block.
All offers surpassed the minimum percentages set by Brazil’s National Agency of Petroleum, Natural Gas and Biofuels.
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