Round Results Promise High Interest Despite Regulatory Hurdle
BMI View: Results of Brazil's 11 th licensing round showed strong participation by international oil companies. The country's legal uncertainty triggered by the numerous debates surrounding the royalty law did little to prevent majors wishing to gain exposure to Brazil's below- ground potential. With a subsalt round expected in the coming October also likely to be well-received, prospects for a high rate of exploration activities create upside risks to both our reserves and production forecasts.
Results from Brazil's 11 th licensing round were announced at the beginning of June. The country's National Agency of Petroleum (ANP) was had offered 172 blocks covering onshore, shallow and deepwater acreage. These lie above the already explored Sergipe-Alagoas, Recôncavo, Potiguar and Espírito Santo basins and the underexplored Foz do Amazonas, Ceará, Pará-Maranhão, Barreirinhas, Potigua and Parnaíba basins.
ANP reported that a minimum level of around BRL6.9bn (US$3.2bn) in investment was committed to exploration activities - more than three times the amount pledged during any of the previous rounds. 142 of the blocks were purchased, with signing bonuses totalling BRL2.8bn (US$1.3bn). These were allocated among 30 different companies: 12 local and 18 foreign. Winners include international oil companies (IOC) such as BP, BG Group, Chevron, ExxonMobil, Total and Statoil, highlighting once again the interest that Brazil's below-ground potential draws.
|Upside Risks From Exploration|
|Brazil's Oil Production, Consumption & Net Exports, '000 b/d|