Offshore Activity

Pre-salt auction may have ExxonMobil, Petronas, Saudi Aramco and Gazprom in dispute of the areas


06/07/2017 |

According to foreign analysts, the increase in production and the high level of productivity of Brazil’s pre-salt oil blocks are expected to help the government attract investments from major international operators in the upcoming October oil auctions. US ExxonMobil, Malaysia’s Petronas, and Russia’s Rosneft and Gazprom should come with everything.

Exxon, the world’s largest publicly traded oil company, has few oil operations in Brazil where its largest focus is on the production of chemicals and polymers and two onshore gas blocks in Sergipe and Ceará. The Brazilian government, which visited the company’s headquarters in the United States three times this year, hopes that this will change. “We had close contact with the company and the investment interest in the country is very great,” said Marcio Félix, Secretary of Oil and Gas of the Ministry of Mines and Energy.

After studies showed that reserves in the layer could reach up to 100 billion barrels of recoverable oil, data that can put Brazil together with important world producers like Iraq, the United States and Saudi Arabia. Exxon is working to partner with Total of France and Norway’s Statoil to explore pre-salt areas with Petrobras.

The Russians are coming

President Michel Temer’s recent visit to Russia may also result in opportunities for E & P investments in Brazil. Executives from Gazprom and Lukoil and Russian President Vladimir Putin met with representatives of the Brazilian government in the Kremlin for hours to analyze pre-salt data. Production in the Brazilian pre-salt layer reached 1.570 million barrels of oil equivalent per day (boed) in May.

Another Russian oil company, Rosneft, which operates gas and oil in blocks located in the Solimões Basin in the Amazon, is also a strong candidate to participate in the oilfield auction on October 27.

Chinese and Petrobras

“The Chinese are expected to have a bigger position in the oil and gas industry, which will undoubtedly be achieved through more partnerships with Petrobras, which dominates ultra-deep water exploration,” said Anderson Dutra, a partner in the KPMG area Oil & Gas in Brazil. Yesterday, Petrobras and China’s CNPC, which is part of the Libra consortium, signed an alliance agreement in Brazil.

According to Petrobras, this agreement is significant to fulfill its business and management plan for the period 2017-2021 and reach its disposal goals by the end of next year.

There are rumors that CNPC will take over the works in the construction of the Petrochemical Complex of Rio de Janeiro (Comperj), stopped since 2015, with the purchase of a minority stake in the project. The refinery unit will produce naphtha, diesel oil, aviation kerosene and cooking gas. Another Chinese state-owned company that can expand its presence is CNOOC.

Dutra of KPMG also says that one of the surprises in these bidding rounds may be Saudi Aramco, from Saudi Arabia. The oil company is preparing for an initial public offering since 2016. “Their interest is to expand international performance and Brazilian reserves can be strategic.” Qatar Petroleum, which paid US $ 1 billion to Shell for a 23% stake in Parque das Conchas project in the Campos Basin is another strong candidate.

About Repetro

Considered an essential condition for the success of the October oil auctions, the renewal of Repetro, a tax exemption program for imported equipment used in oil exploration projects in Brazil, is an essential condition for the success of the oil auctions of October. Direct investments in these areas can reach US $ 83 billion, according to ANP estimates.

The Brazilian government also granted some other advantages to foreign investors, such as reducing the need to use local equipment and services to explore oil fields and to end Petrobras’s exclusivity to operate oil fields in the pre-salt layer.

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