PPSA will sell more than 55 million barrels at the 3rd Union Oil Auction

Pre-Sal Petróleo published in the Official Gazette of the Union, the notice of the 3rd Union Oil Auction, which will sell more than 55 million barrels of oil owned by the Union in the fields of Búzios, Sapinhoá and Tupi and the Mero Development Area. The auction will take place at B3 on November 26th. The pre-bid for the auction is available for public consultation during the month of September.

According to the notice, oil companies that are already members of consortiums in the pre-salt, refineries that have proven logistics for extracting the oil and Brazilian trading companies can participate in the event as individual bidders. In the case of a consortium, this may consist of up to three companies, including an oil company, a refinery, a Brazilian trading company and a logistics company. The same company can participate in more than one consortium, as long as it is for the purchase of oil from different fields.

The auction will be in person, at 2 pm on November 26th. Cargoes will be auctioned in the following sequence: Búzios, Tupi, Sapinhoá and Mero. For each field, contracts will be offered whose terms can vary from 24, 36 or even 60 months. The largest cargo to be traded is from the Mero Development Area. The buyer will be able to purchase a batch of 43.4 million barrels in 36 months or 19.8 million in 24 months. It is important to emphasize that the volumes are estimates of the future portion of oil from the Union in these fields, which include the uncertainties inherent to the process. This means that, when auctioning a lot, the buyer will have available all the load named in the period, even if it is greater or less than the volume stipulated in the notice. Cargo will be available for shipment from 2022.

Auction dynamics

In the first phase, longer term lots will be offered for each field. Each bidder will deliver a written proposal, based on the Reference Price (PR) set by the National Agency for Petroleum, Natural Gas and Biofuel (ANP) for the respective oil. If there is more than one bidder, the open outcry auction will start. The company that offers the highest premium will win.

If there is no bidder for the longer-term lot, a new stage will be carried out, with the reopening of that lot for a shorter-term contract. Likewise, the winner will be whoever offers the highest premium on the PR, with or without a stage out loud.

After the auction of all lots, if any of them has not been sold, the Recap phase will start. The lot will be resubmitted for the shortest period and the winner will be the one who offers the lowest discount offer in relation to the PR. As in the previous phase, if there is more than one bidder, the open outcry auction will start. Pre-Sal Petroleo may or may not accept the offer.

Questions about the notice should be addressed to the e-mail leilao3@ppsa.gov.br until November 3rd.

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