clbrief.com\/![](\"http:\/\/www.petroleumworld.com\/images2021\/brazil_oil_rigs_guanabara_bay_700.jpg\")
The auction marks a turnaround from just two years ago when international oil explorers shunned the sale,
and a second failure would have been an embarrassment for the business-friendly Bolsonaro administration.
– Sweetened terms, high crude prices made fields more attractive
– Brazil\u2019s famed pre-salt region has driven growth since 2010<\/p>\n\n\n\n
By Mariana Durao and Peter Millard \/ Bloomberg News
RIO
Petroleumworld 12 17 2021<\/p>\n\n\n\n
European supermajors TotalEnergies SE and Royal Dutch Shell Plc will join Brazil\u2019s state-controlled oil giant at two key fields, marking the latest expansion in Latin America\u2019s largest crude producer and an important victory for President Jair Bolsonaro.<\/p>\n\n\n\n
TotalEnergies won stakes in both of the deepwater fields on offer Friday, and Shell was awarded a piece of the Atapu field. Both bids surpassed minimum requirements and market expectations. The French energy titan bid with Malaysia\u2019s Petronas and Qatar Petroleum for the rights to Sepia by offering 37.43% of oil output that\u2019s left over after accounting for extraction costs and taxes. Shell\u2019s partners in the successful Atapu bid were TotalEnergies and Petrobras.<\/p>\n\n\n\n
The auction marks a turnaround from just two years ago when international oil explorers shunned the sale, and a second failure would have been an embarrassment for the business-friendly Bolsonaro administration. Sweeter terms and higher oil prices enhanced the appeal of Brazil\u2019s offshore oil trove which includes some of the world\u2019s largest oil discoveries this century.<\/p>\n\n\n\n
\u201cI\u2019d like to celebrate this process and the increase in the number of participants,\u201d Economy Minister Paulo Guedes said during a press conference at the event. \u201cMore players means more investment and production.\u201d<\/p>\n\n\n\n
Petrobras already operates both fields and exercised its rights to a 30% stake in Sepia. Its new partners will have to compensate it for investments made to date and Petrobras won\u2019t increase leverage to pay for the fields, Chief Financial Officer Rodrigo Araujo Alves said.<\/p>\n\n\n\n
\u201cEventually there may be some additional dividend distribution because there will be additional cash inflow in 2022,\u201d Alves said.<\/p>\n\n\n\n
In 2019, Sepia and Atapu failed to attract buyers in what was possibly the world\u2019s priciest oil auction, with bidders on nearby fields paying signing bonuses to the government that totaled $9 billion. Sepia and Atapu are part of a cluster holding an estimated 15 billion barrels of recoverable crude, according to a study by Houston-based consultancy Gaffney, Cline & Associates. The area also includes Petrobras\u2019s Buzios and Itapu fields.<\/p>\n\n\n\n
Petrobras already produces oil in the area, eliminating most exploration risks. The company\u2019s partner in a block that borders on Sepia is Portugal\u2019s Galp Energia SGPS. Galp, Total, and Shell are its partners in a block that borders on Atapu. The pre-salt region has driven Brazil\u2019s growth in recent years.<\/p>\n\n\n\n
Crude from the sub-salt layer of rocks off Brazil\u2019s coast has less sulfur than many grades, reducing the amount of pollution involved in converting it into gasoline. TotalEnergies described the pre-salt as low- emissions reserves in a statement.<\/p>\n\n\n\n
\u201cThe presence of not one but two European supermajors proves that the pre-salt is a long term investment play that has the necessary and sufficient conditions to continue producing through the energy transition,\u201d said Schreiner Parker, an analyst at Rystad Energy AS.<\/p>\n\n\n\n ______________________________________<\/p>\n\n\n\n By Mariana Durao and Peter Millard from Bloomberg News Copyright \u00a91999-2021 Petroleumworld or respective author or news agency. All rights reserved.<\/p>\n\n\n\n Petroleumworld.com Copyright \u00a92021 Petroleumworld.<\/p>\n","protected":false},"excerpt":{"rendered":" clbrief.com\/The auction marks a turnaround from just two years ago when international oil explorers shunned the sale,and a second failure would have been an embarrassment for the business-friendly Bolsonaro administration. – Sweetened terms, high crude prices made fields more attractive– Brazil\u2019s famed pre-salt region has driven growth since 2010 By Mariana Durao and Peter Millard …<\/p>\n![\"\"\/](\"http:\/\/www.petroleumworld.com\/baners_2020\/horizontal_motorola_dec_english_Add-Mineria-04-EN.jpg\")
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bloomberg.com<\/a> 12 17 2021<\/a><\/p>\n\n\n\n