Brazil awards eight onshore E&P licenses

Thursday, May 11, 2017

Local oil juniors Ubuntu Engenharia e Serviços and Guindastes Brasil Intermodal secured two blocks each as Brazil awarded eight of the nine areas on offer at an onshore licensing round on Thursday.

Imetame, Petrol, Dimensional Engenharia and Newo also submitted winning bids in the country's first oil and gas auction since 2015.

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Companies were offered rights to develop mature areas ceded by state-run firm Petrobras in the states of Espírito Santo, Rio Grande do Norte and Bahia.

Hydrocarbons regulator ANP said developers committed to 7.98mn reais (US$2.5mn) in signature bonuses, a record for an auction of marginal onshore areas.

"It went very well. Bonuses [upfront payments] like this are unprecedented for this type of auction," ANP director general Décio Oddone said. "It's the rebirth of Brazil's onshore oil industry."

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Newo offered the auction's biggest signature bonus by bidding a downpayment of 5.71mn reais for the Itaparica field in the Recôncavo basin.

Ubuntu claimed the Urutau (Potiguar basin) and Rio Mariricu (Espírito Santo basin) fields with signature bonuses of 111,000 reais and 809,000 reais, respectively. Guindastes Brasil Intermodal clinched the Recôncavo basin's Araçás Leste field (358,000 reais) and Jacumirim field (132,000 reais).

The other areas awarded were Iraúna in the Potiguar basin (Imetame, 70,000 reais), Garça Branca in the Espírito Santo basin (Petrol, 24,000 reais) and Vale do Quiricó in the Recôncavo basin (Dimensional Engenharia, 765,000 reais)

The Potiguar basin's Noroeste do Morro Rosado field did not receive offers.

The so-called rodadinha – or little round – was the first of four oil licensing auctions planned in Brazil this year as the government attempts to rejuvenate an industry ravaged by corruption, sinking crude prices and Brazil's worst ever recession.

ANP hopes companies will be lured by changes to local content rules that make it easier to source cheaper equipment and services from abroad.

Oddone said the auction augured well for Brazil's 14th round of concessions for post-salt areas in September. He said auction terms and conditions for the round would be published within two weeks.

ANP is also planning two auctions for ultra-deepwater pre-salt fields in 2017 under its production-sharing contract model.

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