Offshore Activity

Barra Energia weighs investment capacity to decide if they will participate in a pre-salt auction

 

07/26/2017

Independent Barra Energia is studying to participate in the auction of the area adjacent to Carcará’s promising discovery in the Santos Basin pre-salt this year, but still assesses if it will have the resources to make the investment, said the company’s CEO, Renato Bertani.

The portion of the Carcará deposit that is outside the limits of the contract will be auctioned in a pre-salt round in October this year, for a fixed bond of 3 billion reais.

The slice that goes to the auction is estimated to contain a reserve of 2 billion barrels of oil “in situ”, which indicates a giant reserve, in the assessment of the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

“We are looking at all the opportunities that come up, including this one, but we have to weigh two sides, first strategic alignment and second management of our investment capacity,” Bertani said during an event in Rio. “We’re not going to commit to anything that causes cash trouble in the future.”

The executive explained that there are still no negotiations for the formation of consortiums for the auction.

“We are still very much in the evaluation of the asset and the economic part, because it is another model of contract, which demands a more complex analysis,” he said.

Barra Energia, controlled by private equity funds First Reserve and Riverstone Holdings, holds 10 percent of the BM-S-8 block, which is Carcará’s original discovery.

Bertani said it had not received an offer from Norwegian Statoil for its participation in the BM-S-8.

This month, Statoil announced the purchase of 10 percent of Queiroz Galvão Exploration and Production (QGEP) assets for 379 million dollars. It also had already bought 66 percent and control of the block of Petrobras, for 2.5 billion dollars, besides expressing its interest in the auction of the adjacent part. The asset brings great expectations to the market. In previous announcements, Petrobras revealed that tests showed high productivity, equivalent to the best wells producing the pre-salt.

Attractiveness of the auctions –

Bertani said he believes that the partner acquiring the adjacent area of ​​Carcará is required to make at least two wells in two years in the new area, while the current contract provides only one well in three years.

“We think there is very little about the size of the discovery and it is absolutely feasible to accelerate this program,” he said.

Also present at the public hearing, the executive secretary of the Brazilian Petroleum Institute (IBP), Antonio Guimarães, said the documents presented by the ANP show “that the government moved to make the contract more attractive.”

However, he pointed out that there are points that the IBP asks for change. Among them, he explained that the dynamics of the day of the auction does not stimulate more competition.

 

In the rules proposed by the ANP, the bidders will make all the offers for the areas at once and the ANP will appoint the winners.

“(This way) you lose the ability to create competitiveness, because if there is a company that has a limitation of how many blocks it can buy and you have to make all the offers at one time …, ” said Guimarães.

Categories: Offshore Activity

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