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October 1, 2018

Global oil companies win acreage in Brazilian offshore blocks auction

Major oil and gas giants, including Shell, Chevron and BP, have bagged acreage in the auction of offshore oilfields in Brazil’s pre-salt region.

Major oil and gas giants, including Shell, Chevron and BP, have bagged acreage in the auction of Brazilian offshore oilfields in the pre-salt region.

The bidding round saw the Brazilian Government give away four blocks for a total consideration of R$6.82bn ($1.71bn), Reuters reported.

Shell Brasil Petróleo, in a consortium with Chevron Brasil Óleo & Gás, secured a production sharing contract (PSC) for the Saturno pre-salt block located in the Santos Basin. The PSC is valid for a period of 35 years.

Shell’s share of the total payment for the block, which will be owned by the companies on a 50:50 basis, stands at around $390m.

Royal Dutch Shell Upstream Director Andy Brown said: “We are pleased to add another material, operated exploration position to our leading portfolio in one of the world’s most prolific deep-water areas.

“We continue to grow an exciting and resilient Upstream business of long-term competitive positions in our heartlands while maintaining strong, capital discipline.”

"With the acquisition of this block, we continue to increase our holdings in Brazil’s pre-salt basins, which are high-quality opportunities that enhance ExxonMobil’s global portfolio."

The PSC increases the company’s total net acreage of Brazilian offshore oilfields to nearly 2.7 million acres.

Meanwhile, ExxonMobil-Qatar Petroleum consortium won the Titã exploration block. The addition of the block increases ExxonMobil’s position in the country by 71,500 net acres to around 2.3 million net acres.

ExxonMobil will operate the block with a 64% interest, with Qatar Petroleum holding the residual 36% stake.

ExxonMobil Exploration Company president Steve Greenlee said: “With the acquisition of this block, we continue to increase our holdings in Brazil’s pre-salt basins, which are high-quality opportunities that enhance ExxonMobil’s global portfolio.”

The company holds interests in 26 blocks off the coast of Brazil through its subsidiary ExxonMobil Exploração Brasil.

According to Reuters, British firm BP won the Pau Brasil block in the Santos Basin as part of a consortium with Colombia’s Ecopetrol and China’s CNOOC.

The pre-salt region is said to contain billions of barrels of oil trapped under a thick layer of salt offshore.

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