RIO DE JANEIRO (Reuters) – Oil major Royal Dutch Shell Plc (L:RDSA) won half the blocks awarded in Brazil’s deepwater oil auction on Friday, while rival BP (L:BP) took two blocks and Exxon Mobil Corp (N:XOM) took one out of a historic opening within the pre-salt play to foreign operators.
Brazil awarded six within the eight blocks available inside the auction with the rights to function oil within the country’s coveted pre-salt region, where millions of barrels of oil are trapped below a large number of feet of salt during the country’s Atlantic waters.
The wins will bolster Shell’s position when the largest foreign operator in Brazil’s offshore oil sector, second and then state-run oil giant Petroleo Brasileiro (Petrobras) (SA:PETR4).
The Anglo-Dutch oil major won an area in consortium with France’s Total SA (PA:TOTF), another with Petrobras and Repsol-Sinopec, along with a third with Qatar Petroleum International (QPI) and China’s CNOOC.
Shell says it’s confident it could possibly pump with the pre-salt fields at below $40 a barrel.
Rival BP Plc (L:BP), which happens to be active in Brazil yet not yet producing oil, took two more blocks on Friday.
“We view the us government of Brazil being more supportive of foreign companies entering Brazil,” BP Latin America President Felipe Arbelaez said following rounds.
“You can find excellent assets. We believe which the assets here shall be resilient in a price environment.”
Brazil earned 6.15 billion reais ($1.88 billion) in signing bonuses for any six fields that it awarded while in the auction.
President Michel Temer’s government has enacted reforms to really make the energy sector more appealing to foreign investment, have the option to new international oil firms might be capable to operate fields within the pre-salt.
Countries worldwide sitting on gas and oil prices reserves wish to pump it before it is less valuable as global policies to treat coffee kick in.
The opposition in Brazil has opposed a number of the reforms, and also the auction was delayed by three hours on Friday after having a federal judge issued an injunction to suspend the task in the behest with the leftist Workers Party.
That left top executives on the world’s largest oil companies milling around in the hotel that hosted the auction, inside an upscale seaside neighborhood in Rio de Janeiro.
EXXON
In a twist, U.S. major Exxon Mobil, whose 10-block win in last month’s Brazilian auction was seen by many as the prelude towards a big use on Friday, took an individual block during a consortium with Norway’s Statoil ASA (OL:STL) and Portugal’s Petrogal [PETP.UL], one of Galp Energia (LS:GALP). Two blocks got no bids.
The quality of reserves along with the reforms sometimes make Brazil an essential target for oil majors, but they also have less appetite for capital-intensive mega projects since crude prices crashed in 2019.
Brazil has high wants the volume of oil the firms can pump within the blocks. Brazilian oil output could double to greater than 5 million barrels on a daily basis (bpd) by 2027, in comparison to both the.6 million bpd created in August, regulator ANP said on Thursday.
($1 = 3.2652 reais)
