Brazil to Auction Offshore Fields

Brazil to Auction Offshore Fields

A new round of auction off the coast of Brazil in November, could potentially offer more oil than all reserves in Mexico. It has attracted interest from some of the world largest producers.

Chevron, Exxon Mobil and Royal Dutch Shell are among 14 companies registered, the government said Monday. Brazil expects to raise as much as 106 billion reais ($25 billion) in licensing fees from selling the leases.

“This is an auction for big players given the volume of oil involved,” oil regulator Decio Oddone said in an interview.

The blocks that are auctioned in November are Buzios, Atapu, Itapu and Sepia — are located in an area where state-controlled Petroleo Brasileiro SA obtained rights to 5 Bbbl of oil from the government in 2010. As Petrobras explored the region, it found much cruder than it was entitled to in the deal, leaving the government with a surplus.

The sales of the transfer right oil have been anticipated in the oil industry. The past five years has seen contract reviews and regulation changes. A major milestone was reached when congress in October eliminated a legal hurdle for the offering and clearing the way for a compensation payment of $9 billion to Petrobras, as the company is also known.

“The legal uncertainties around the round are over,” House speaker Rodrigo Maia said Friday.

The 11 companies registered for the auction as potential operators include not only Chevron, Exxon and Shell but also BP, CNODC, CNOOC, Equinor, Galp Energia SGPS’s Petrogal, Petrobras, Petroliam Nasional Bhd, and Total. Ecopetrol, Wintershall and QPI have signed up as prospective non-operators.

In this auction a large amount of fields offers a large amount of discovered oil. Petrobras is already producing in the same deep-water region of the Atlantic Ocean.

Will see who will get what soon enough.