Brazil Flags 14th Round Next Week
Brazil will hold its 14th Bidding Round on September 27 offering 287 blocks for oil and gas exploration and production in nine basins, said upstream regulator ANP September 18.
The 14th round will offer areas in high potential basins, new frontiers and mature basins, said ANP, with 32 companies taking part in the round including the UK's BP and Shell. It will offer 110 offshore blocks (10 in the Campos, 7 in the maritime part of Espirito Santo, 6 in the Pelotas, 76 in the Santos and 11 in the maritime part of the Sergipe-Alagoas basins).
Winning companies are decided by two criteria: the signature bonus (the financial value offered for the block) and the minimum exploratory program (research activities, such as seismic and well drilling, which the company commits itself to carry out during the exploration phase).
For the 14th round, concession rules were simplified, in order to make them more investor-friendly with: the adoption of the single exploration phase and the possibility of extending it due to technical reasons; the removal of local content as a basis of offer in the bid round; distinct royalties for the new frontier areas and mature basins of greater risks; and the incentives to favour small explorers. Minimum signature bonuses defined in the bid documents range from reais 5.34mn ($1.7mn) to reais 31.47mn ($10mn) for offshore blocks.
Onshore, 177 blocks will be offered, with minimum signature bonuses ranging between reais 30,800 to 712,500.
ANP also said that it will hold the 2nd and 3rd pre-salt bidding rounds on October 27, noting that currently the ten most productive wells in Brazil are located in the pre-salt, which is already responsible for about half Brazil’s oil and gas production.
The second round will offer four areas with unitisable deposits, adjacent to fields/prospects whose reservoirs extend beyond the concession area. Areas are related to discoveries named Gato do Mato and Carcara, and to the fields of Tartaruga Verde and Sapinhoa. The 3rd pre-salt round will present four areas located in the Campos and Santos basins, related to the prospects of Pau Brasil, Peropa, Alto de Cabo Frio-Oeste and Alto de Cabo Frio-Central.
Mark Smedley