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Petrobras preempts three pre-salt areas ahead of sixth auction

By
Renzo Pipoli
Roberto Castello, new president of Petrobras, as he delivered a speech during a transfer of powers ceremony in the headquarters of the company in Rio de Janeiro on January 3. Photo by Antonio Lacerda/EPA EFE
Roberto Castello, new president of Petrobras, as he delivered a speech during a transfer of powers ceremony in the headquarters of the company in Rio de Janeiro on January 3. Photo by Antonio Lacerda/EPA EFE

Jan. 15 (UPI) -- Brazilian state oil company Petrobras wants to exercise pre-emption rights for three areas ahead of the sixth bidding round of pre-salt offshore oil to be held later this year.

The Brazilian state oil company said it has notified Brazilian energy officials it wants to exercise its rights to secure operatorship in the pre-salt blocks of Aram, Norte de Brava and Sudoeste de Sagitario.

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Petrobras wants to become the operator of those fields with a 30 percent stake, which may be increased by forming a consortium during the bidding process.

The sixth round was approved in mid-December and is also set to include the areas of Boomerang and Southern Cross, which is a combination of the former Southeast Lula and the South and Southwest Jupiter blocks. It will be held November 1, 2019, an Offshore Engineer report said citing sources.

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The pre-salt auctions are done under production sharing agreements. New Brazilian oil officials appointed after Brazil President Jair Bolsonaro started his government in January have said that there has been no decision so far to change that concession modality for pre-salt, as has been speculated, the report added.

More pre-salt auctions are planned for 2020 and 2021, it said.

In addition to the pre-salt bidding, Brazil is also set to carry out in October a 16th auction of oil areas under the concession regime. It will include 42 blocks in seven areas.

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In the fifth pre-salt auction held in September Brazil awarded all four areas it had offered in 35-year contracts, a September 28 report from O Globo said.

The blocks were Saturno, Tita, Pau-Brasil and Sudoeste de Tartaruga Verde. Shell, ExxonMobil, and BP led consortiums that won the first three blocks with the last being awarded to Petrobras, according to a Energy-Pedia report.

The pre-salt fields located in deep waters have tripled production in the last four years, from 500,000 barrels per day in 2017 to 1.5 million barrels of oil per day in 2018.

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Pre-salt is a sequence of sedimentary rocks formed by the separation of the current American and African continents, about 150 million years ago.

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