Revenues from new pre-salt blocks in Brazil may total $300 bi

In an announcement made today (Sep. 28) in Rio de Janeiro, Brazil’s National Agency for Oil, Natural Gas, and Biofuels (ANP) said that the oil output in the pre-salt blocks clinched under the sharing regime since last year is expected to bring revenues adding up to $300 billion for the government at federal, state, and municipal level.

Figures include blocks won from the second to the fifth round, held from September 27 last year to today, and takes into account the shares offered to the Brazilian government and $70 for the average oil barrel.

Under the sharing contracts, used for the production of pre-salt oil, the companies in charge of the exploration and production must offer the government a percentage of what is produced. Winning bids are those with the highest shares offered.

PEM

Today’s auction, ANP declared, with no blocks left unsold, guaranteed $60 billion of the $300 billion estimated, and contributed for the four rounds to see a percentage of 93 percent of the blocks won. The average premium in the fifth round stood at 170 percent, with bids going upwards of the minimum offers by up to 300 percent.

“I don’t know of any other place on the plat with such elevated concentration levels,” said ANP Director-General Décio Oddone.

Márcio Félix, secretary-executive at the Ministry of Mines and Energy, celebrated the outcome of the auction and said that the $250 million investment in the blocks sold in the fifth round includes only the costs for finding oil and natural gas in the blocs. This investment comes as part of the Minimum Exploration Program—PEM in the original acronym—which sets forth a set of exploratory activities—geological knowledge, exploratory wells—which the participating companies vow to carry out.

After the discoveries are made, he said, investments are higher. “It is with great joy that we see this moment of consolidation,” he said.