A Petrobras-led consortium was the sole bidder for the flagship Aram area in the Santos basin at the opening of Brazil’s sixth pre-salt round in Rio de Janeiro.
Petrobras on 80% and China National Oil & Gas Exploration & Production Development Corporation (CNODC) on 20% secured Aram for a fixed signature bonus of 5.05 billion reais ($1.24 billion).
To the surprise of many that expected competition for the high-profile area, Petrobras faced no rivals to acquire Aram by offering a minimum profit oil share of 29.96%.
The Brazilian National Petroleum Agency (ANP) estimates that Aram holds unrisked volumes of 29 billion barrels of oil in place.
There were no bids for the Cruzeiro do Sul pre-salt area. The ANP asked for a fixed signature bonus of 1.15 billion reais and a minimum profit oil share of 29.52%.
Even though Petrobras had previously exercised preferential bidding rights for the Southwest of Sagitario pre-salt area, the block failed to attract any bids.
The area was unitisable with Block BM-S-50, operated by Petrobras on 60%, with Shell on 20% and Repsol Sinopec on 20%.
The Bumerangue pre-salt area, located in the southern portion of the Santos basin, also did not attract any offers.
The last block on offer, the North of Brava pre-salt area, also failed to get any bids. The area was unitisable with the Marlim field, wholly owned by Petrobras.
ANP director general Decio Oddone admitted that he was surprised by the result, given that Petrobras had exercised preferential bidding rights on three areas and only acquired Aram.
“We are also starting to see changing of priorities. Companies are concentrating on making the most of investments already made, and getting ready to drill wells and such. This is natural in any basin in the world,” he said.
Mines & Energy Minister Bento Albuquerque said the government intends to learn from results of the latest rounds.
“We will be looking at ways we can improve the way we offer acreage and we plan to offer these areas to the market again, together with Sepia and Atapu, and do so in a way that makes the best use of Brazil’s wealth,” Albuquerque told reporters in a press conference after the round.
There were some differences in interpretation among participants in the round.
A manager from an IOC told Upstream on the sidelines of the event: “There was a pretty co-ordinated message from the international oil companies and, for me, the main complaint was that signature bonuses are too high."
Another manager added: “To me the message goes deeper. You can see the contrast with the 16th licensing round under the concession regime, which was an enormous success, with diverse participation. I think the message goes to the heart of this.”
Andre Fagundes, vice president for Welligence Energy Analytics, said: “The days of chasing pre-salt exploration acreage at any cost are over. It is clear that the ANP needs to rethink the terms under which it offers acreage in the pre-salt polygon.”
One source was more sanguine, saying the result is “a smack in the face of the government".
(This story has been updated to correct the minimum profit share offered by Petrobras for Aram to 29.96% from 29.26% as Upstream initially reported.)