September 12, 2019
With the acquisition of three new concessions in the Sergipe-Alagoas Basin, in the permanent offer of the National Petroleum Agency (ANP), this week, ExxonMobil consolidates its presence in Brazil’s most promising exploration and production frontier since the discovery of pre-salt. The American-led consortium, along with Enauta and Murphy Oil, is expected to start drilling its first deepwater wells in the region in 2020.
The consortium is today the main private actor in the exploration of the Sergipe-Alagoas Basin. Together, ExxonMobil (50%), Enauta (30%) and Murphy Oil (20%) have six exploratory concessions in the region and, with participation in this week’s auction, now operate nine blocks – equaling Petrobras the number of areas in the region which has made important discoveries on the Sergipe coast in recent years.
In August, Enauta announced that the basin drilling program is scheduled to begin from the second half of 2020. According to the oil company, companies have already submitted their environmental license applications. Definitive seismic data, which will indicate the best drilling points, should be received this year.
The Sergipe-Alagoas Basin emerges as the newest frontier for oil and gas exploration and production off the Brazilian coast. Petrobras has six discoveries in the region (Cumbe, Barra, Farfan, Muriú, Moita Bonita and Poço Verde) and expects to start producing its first oil in 2023.
To split the billion-dollar investments that will be needed to develop local infrastructure, the company is selling part of its stake in local concessions. The presence of Exxon, the world’s leading private oil company, incurs the expectation that investments in the region can be accelerated.
Given the exploratory success of the state, the Sergipe-Alagoas Basin began to attract the attention of the private initiative in 2015, when Enauta (then Queiroz Galvão Exploration and Production) paid, alone, R$ 100 million for two concessions on site, in the 13th ANP exploratory blocks round.
In 2017, amid reforms in the sector’s regulatory framework, Exxon decided to increase its presence in Brazil and elected the Sergipe-Alagoas Basin as one of the main destinations for its investments, alongside the Santos and Campos pre-salt. The company bought 50% of Enauta’s stake in the two blocks that the Brazilian company operated, and, together with Murphy and former QGEP, bought four more areas, in the auctions of 2017 and 2018.