June 14, 2019
At least four foreign oil companies are closely monitoring the Transfer of Rights oil surplus auction. The multinationals BP, Shell, Total and Petrogal have officially expressed some concerns about how the financial compensation will be paid to Petrobras and recently sent to the Ministry of Mines and Energy (MME) some contributions to improve the bidding rules. Yesterday, the National Petroleum Agency (ANP) published the pre-bid and draft contract for the bid. Initially scheduled for October 28, the auction was rescheduled for November 6.
The surplus is the uncovered volume of oil that exceeds 5 billion barrels that Petrobras is entitled to produce in the pre-salt, as part of the onerous assignment – a contract signed in 2010, within the operation that led to the increase of the Union share in the state capital.
At least one of the oil companies’ suggestions has already been accepted by the government. Shortly before the announcement of the bidding announcement, yesterday, the National Energy Policy Council (CNPE) published some adjustments to the guidelines on the calculation of the financial compensation that will be paid to Petrobras. Under the rules of the round, the bid winners will sign a partnership agreement with the Brazilian oil company in the Búzios, Atapu, Itapu and Sepia fields, in the Santos Basin, and will pay compensation to the state-owned company for investments already made in the areas.
With the change in the wording of the resolution, the CNPE made it clear that the amounts that will be paid to Petrobras will be recoverable as a cost in oil. That is, in practice, these amounts will be deducted from the portion of oil that will be shared with the Union, in the sharing agreement. The council made yet another change in the rules: the framework for calculating the compensation to Petrobras ceased to be the signature of the contracts for sharing of surpluses and became the partnership agreement that will be signed between the companies.
During the period of the public consultation of the compensation rules, BP said that the auction offers “a unique opportunity to attract new and huge investments in Brazil’s oil and gas sector”, but that the rules presented so far offered a “high degree of uncertainty to investors. ” The oil companies now have until July 3 to submit their contributions on the pre-bid and draft contract.
BP questions, for example, the current rules that oblige the companies to bear the taxes due by Petrobras as a result of the payment of the compensation. According to the company, the proposal consists of a “risk of great magnitude and that can prevent investments”.
Petrogal suggests that the subscription bonuses paid by the companies in the auction can be returned, in case of refusal to sign the co-participation agreement by any of the parties. Shell is also concerned about the compensation negotiations and suggests an expert judgment procedure on the assumption that the parties have not reached agreement on the values.
The surplus auction involves huge volumes of investment. The four areas that will be offered – Búzios, itapu, Sepia and Atapu – add up to R $ 106 billion in signature bonuses. Payment must be made by the winners by December 27. The signing of the contracts is scheduled for March 31.