A total of 11 companies have paid up to take part in what will be a tough competition to try and gain a slice of Brazil’s giant Libra pre-salt block, although the number – or rather, the lack of – who signed up has raised some eyebrows.
Keen to take part are Shell, Total, Petrobras and Repsol-Sinopec, the latter a joint venture between the Spanish and Chinese companies. Also in the running are China National Offshore Oil Corp. and China National Petroleum Corp, Ecopetrol of Colombia, Mitsui of Japan, India’s Oil & Natural Gas Corp., Galp of Portugal and Malaysia’s Petronas, according to Brazil’s National Petroleum Agency (ANP). “These companies still need to pass for a qualification process to participate in the auction,” said the ANP.
Petrobras, of course, is already guaranteed a 30% exploration stake in the block.
Libra in the Santos Basin is expected to be auctioned on 21 October, with estimated recoverable reserves put at anywhere between 8-12 billion barrels of oil and gas.
The steep entry cost is likely to be one of the reasons why some significant names chose not to participate, perhaps believing they can get better value on other projects elsewhere. The signature bonus for Libra is put at around 15 billion Brazilian reais (US $6.35 billion). Absentees from the bidding included BP, BG, Exxon Mobil and Chevron. Originally the number of companies expected to participate was put at up to 40.
Brazil’s Finance Minister, Guido Mantega, chose to focus on the positive interest: “I can guarantee the auction will be successful. Everybody knows Libra is one of the most productive areas,” he said.
Libra is being auctioned under a new model for the pre-salt region, with Petrobras guaranteed operating control of new projects there. Libra will be subject to a profit-sharing model, where Petrobras and its partners will give the government at least 41.65% of production after deducting enough output to cover costs.
Recommended Reading
Exclusive: Calling on Automation to Help with Handling Produced Water
2024-03-10 - Water testing and real-time data can help automate decisions to handle produced water.
Exclusive: Liberty CEO Says World Needs to Get 'Energy Sober'
2024-04-02 - More money for the energy transition isn’t meaningfully moving how energy is being produced and fossile fuels will continue to dominate, Liberty Energy Chairman and CEO Christ Wright said.
Exclusive: Tenaris’ Zanotti: Pipes are a ‘Matter of National Security’
2024-04-12 - COVID-19 showed the world that long supply chains are not reliable, and that if oil is a matter of U.S. national security, then in turn, so is pipe, said Luca Zanotti, U.S. president for steel pipe manufacturer Tenaris at CERAWeek by S&P Global.
Exclusive: Sabine CEO says 'Anything's Possible' on Haynesville M&A
2024-04-09 - Sabine Oil & Gas CEO Carl Isaac said it will be interesting to see what transpires with Chevron’s 72,000-net-acre Haynesville property that the company may sell.
Exclusive: As AI Evolves, Energy Evolving With It
2024-02-22 - In this Hart Energy LIVE Exclusive interview, Hart Energy's Jordan Blum asks 4cast's COO Andrew Muñoz about how AI is changing the energy industry—especially in the oilfield.