Brazil raises US$2 billion in large deepwater oil block auctions

RIO DE JANEIRO, BRAZIL – Brazil’s government in recent hours raised almost US$2 billion with the auction of two large oil blocks in pre-salt ultra-deep waters, which attracted bids from international companies such as Total and Shell.

“We had an extraordinary result for Brazil that exceeded our expectations,” said National Petroleum Agency (ANP) general director Ricardo Saboia in a statement.

Bids two years ago, touted as “historic,” raised US$17 billion, short of the expected US$26 billion, because large foreign companies did not participate.

To attract investors, the Brazilian government reduced the price to be paid for the rights to the two blocks by 70% and they were ultimately auctioned for R$11.14 billion (US$1.9 billion).

“There was competition (…) there were five winning companies, which broadens the diversity of the Brazilian pre-salt exploration and production scenario, thus increasing the sector’s dynamism,” Saboia said.

As in previous auctions, Brazilian state-owned Petrobras was the most active, disbursing a total of R$4.2 billion.

Among major foreign companies, the French group Total stood out as part of the two winning consortia, for a total of R$2.9 billion.

The Anglo-Dutch giant Shell obtained rights to part of the two blocks, paying R$1 billion.

Malaysia Petronas and Qatar Petroleum were also interested in the Sepia block, the larger of the two, each paying R$1.49 billion. According to experts, these could be the last “pre-salt” fields that Brazil offers, given the world’s growing reluctance to depend on fossil fuels and the pressure on the energy industry to move towards alternative sources.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error