Petrobras sweeps pre-salt oil supply auction

By Nathan Walters / Argus

RIO
Petroleumworld 11 24 2021

Brazil’s state-controlled Petrobras was awarded all four pre-salt oil supply contracts offered by state-owned pre-salt marketing firm PPSA at auction today, outbidding France’s TotalEnergies and China’s state-owned CNODC.

The awards give Petrobras the right to market more than 55mn bl of the federal government’s crude from the Tupi, Mero, Sapinhoa and Buzios fields that it operates.

Petrobras outbid CNODC for a three-year contract covering 6.6mn bl of 28°API Buzios crude. Petrobras prevailed after offering a R65/m3 ($11.64/m3) premium to reference prices set by oil regulator ANP.

Petrobras and CNODC also vied through multiple bidding rounds for a three-year contract covering 43.4mn bl of 29°API Mero crude, which was awarded to the Brazilian firm at a R52/m3 premium. The lot was the biggest in today’s auction.

CNODC holds a 5pc interest in Buzios and a 10pc stake in the Mero field, which is slated to receive its first 180,000 b/d floating production, storage, and offloading (FPSO) unit next year.

Petrobras operates Mero with a 40pc stake. Shell, which did not participate in today’s auction, holds 20pc in Mero, as does TotalEnergies. CNOOC holds the remaining 10pc in Mero, in addition to 10pc in Buzios.

TotalEnergies, which only holds the Mero stake, bid on all four contracts offered today. In addition to Buzios and Mero, the firm also lost in bidding for a five-year contract covering 2.4mn bl Sapinhoa 30°API crude, which was awarded to Petrobras at R7.35/m3. And Petrobras outbid the French firm for a five-year contract for 3.3mn bl of 28°API Tupi, with a winning R3.35/m3 bid.

Established in 2013, PPSA represents the federal government in 17 production-sharing contracts currently producing around 520,000 b/d. The firm has raised around R1.9bn from oil sales since 2018 and expects to raise $116bn in sales through 2031 — when output from the PSCs it manages climbs to an estimated 3.48mn b/d. The government’s share of profit oil — total production less approved costs — is forecast to reach 1.075mn b/d in 2031.

Two supply auctions launched by PPSA in 2018 failed to generate the level of competition seen at today’s auction, which was scheduled after an April tender to hire a marketing agent for its share of Tupi production also failed to attract bids. Petrobras, CNODC, Norway’s Equinor, Portugal’s Galp, Sino-Spanish joint venture Repsol-Sinopec, TotalEnergies were pre-qualified for the auction carried out today at the Sao Paulo stock exchange B3.

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By Nathan Walters from Argus Media.

argusmedia.com 11 26 2021

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