brazil

The Brazilian Government will hold an auction to sell blocks in some of its most promising offshore oil and natural gas blocks in October, one month earlier than expected.

Reuters quoted GloboNews as saying that the auction date has been moved up, to take advantage of the strong demand for high-risk frontier areas that was witnessed at a 14 May auction.

At the latest auction, the first in five years, Brazil sold 142 exploration areas to 39 companies from 12 countries for BRL2.82bn ($1.4bn).

Brazil has plans to also include the giant Libra prospect among the areas on offer in the October sale, said GloboNews.

Brazil’s National Petroleum Agency (ANP), which discovered oil in the Libra prospect in 2010, estimated the block to contain about 16 billion barrels of recoverable oil. During the auction, which will be managed by ANP, Brazil plans to offer areas in the Subsalt Polygon.

"At the latest auction, the first in five years, Brazil sold 142 exploration areas to 39 companies from 12 countries for BRL2.82bn."

The area is anticipated to hold giant discoveries, where oil is trapped in undersea reservoirs by a layer of salt nearly 7,000 metres below the ocean’s surface.

The Polygon is expected to cover about all unleased areas in the Campos and Santos basins, where existing leases already produce 80% of Brazil’s oil.

The Brazilian Petroleum Institute of Rio de Janeiro-State University estimates the Polygon to hold around 100 billion barrels of oil.

Under the 2010 law, all new leases in the Polygon will be production-sharing contracts, while state’s control has been increased over resources in the offshore Campos and Santos Basins north-east and south of Rio de Janeiro.

As part of the law, state-controlled oil company Petroleo Brasileiro (Petrobras) will also have to take a minimum 30% interest and pay nearly 30% of all investment in the Subsalt Polygon blocks.


Image: Sapinhoa (formerly Guara) oil field is located in block BM-S-9 of the Santos basin.

Energy