October 9, 2019
Seventeen oil companies, among the industry giants and mid-sized companies, will compete tomorrow for 36 areas, focusing on deep and ultra-deep waters off the Southeast and Northeast coast, in the 16th Round of oil and gas exploration block concessions. The bidding process is the first in a sequence of three major auctions that has the potential to irrigate the federal, state and municipal funds by over $ 117 billion, if successful.
The 16th Round of the National Petroleum Agency (ANP) marks the debut of the Jair Bolsonaro government’s major oil and gas auction calendar. The expectation is that the Campos and Santos basins, the two main attractions of the bidding, will once again arouse the interest of the large multinationals in the sector. Oil companies such as Petrobras, ExxonMobil, Shell, BP, Chevron and Repsol, which are present in the region and in the auctions of the last two years, are among the registered.
Assets offered in Round 16 have pre-salt potential, although they are outside the polygon. With bonuses smaller than those involved in the 6th Pre-Salt Round and the Transfer of Rights surplus in November, the expectation is that medium size oil companies will be able to grow in Campos and Santos.
The auction will offer 24 areas in these basins with variable bonuses, from R$ 8.9 million to R$ 1.375 billion, which makes room for both giants and midsize companies – such as Enauta, Karoon, Murphy Oil and Wintershall Dea.
For Carlos Maurício Ribeiro, oil and gas specialist at Vieira Rezende Advogados, the expectation for the auction is positive, with strong competition between the companies. “Auction under concession always has an appeal. And they are good areas. I think it will be a good result in terms of revenue and investments, ”he said.
On the other hand, a sector concern of the areas of the Jacuípe and Camamu-Almada basins, on the Bahia coast, near the Abrolhos archipelago. This is because the Public Prosecution Service of Bahia filed a lawsuit against the auction of these assets. The risk that an injunction will be granted by tomorrow, requesting the removal of the areas, creates a climate of legal uncertainty.
Round 16 will offer blocks in the Pernambuco-Paraíba, Jacuípe, Camamu-Almada, Campos and Santos basins. With the exception of Enauta and Petrobras, all registered applicants are foreign: BP (UK), Chevron (US), CNOOC (China), Ecopetrol (Colombia), Equinor (Norway), ExxonMobil (USA), Karoon (Australia), Murphy Oil (USA), Petrogal (Portugal), Petronas (Malaysia), QPI (Qatar), Repsol (Spain), Shell (United Kingdom / Netherlands) and Total (France) and Wintershall Dea (Germany).
In addition to this round, two more are scheduled for 2019: the surplus mega-auction (November 6), whose offered areas have a fixed subscription bonus of R $ 106.5 billion, and the 6th Pre-Salt Sharing Round ( November 7), whose bonus is R $ 7.85 billion. In this auction, the bonus is fixed and winner is who presents the highest percentage of oil to the Union.
For the 16th Round, the government set at R $ 3.2 billion the minimum bonus of the 36 areas to be offered. In practice, however, the bonus may be higher or lower, depending on the goodwill presented by the assets and the number of areas traded. In the concession regime, the one who offers the highest bonus wins.