ANP to tender area in pre-salt won by Eni in auction suspended in 2006

The area is part of the Aram exploratory block, planned for the 6th pre-salt auction next year.

November 19, 2018

Thirteen years later, the National Petroleum Agency (ANP) will enter exploratory block SM-857, in deep waters of the Santos Basin, in the 6th pre salt bidding rounds in 2019 won by Italian Eni in the 8th round of bids, suspended in 2006 for a decision in court . The area is part of the Aram exploratory block.

S-M-857 was tendered in November 2006, a year before Petrobras and the Lula government announced the official discovery of the pre-salt. At that time, it was the highest signing bonus ever offered in ANP rounds: R $ 307.3 million. The area sold to Eni was disputed with Petrobras and the consortium Norsk Hydro, Repsol and Shell. Eni’s proposal was almost double that of second placed Petrobras.

ONGC, Repsol Sinopec, Petrobras and Norsk Hydro also acquired other areas in the SS-AP3-NF sector in the Santos Basin. But no one took them. An injunction obtained in federal court by then federal congresswoman Clair da Flora Martins (PT / PR) ended up suspending auction in the middle of the first day. 58 of the 284 blocks planned for the auction were offered before the court’s decision to stop the bidding.

The injunction was obtained on top of a decision of the ANP board at the time. In order to avoid concentrating areas in the hands of some players – in the previous auction, Argentina Oil M & S had bought many low-cost areas in the Solimões Basin alone – the board of ANP decided to limit the winning offers by companies. Thus, anyone who reached a pre-defined number of areas in a basin could no longer obtain areas.

The decision which sought to pulverize displeased a number of operators. Especially Petrobras at the time.

In December 2012, the National Energy Policy Council (CNPE) determined that the ANP should take the necessary legal steps to effectively cancel the event. In February 2013, ANP’s board of directors effected the cancellation of the round and determined the return of all participation fees and offer guarantees to the participants.

Eni filed a lawsuit against the Federal Government and the ANP in order to invalidate the CNPE Resolution. The company claimed that it had won the bid for the S-M-857. In July 2014, the Justice revoked the results of the 8th round, ending the pendency that had been going on for almost eight years. The decision released the areas to be resold under the production sharing regime.

Still unsure of the fate that would have the block won in the 8th round, Eni re-enrolled in the next auction. The 9th round of the ANP took place in November 2007. Nineteen days before, after a meeting of the National Council for Energy Policy (CNPE) held at Petrobras headquarters, the then Minister of Mines and Energy, Dilma Rousseff announced the discovery of the pre- salt and the withdrawal of 41 exploratory blocks from the auction in the Campos, Santos and Espírito Santo basins.

Eni has never returned to an ANP auction.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.