Pre-salt redoubles ExxonMobil's Brazil focus

Brazil's second and third pre-salt licensing rounds served to reinforce the renewed focus of US giant ExxonMobil on Brazil, according to UK-based oil consultancy firm Wood Mackenzie.

The Texas-based firm was part of a consortium that won exploration and production rights for the vaunted Norte de Carcará area, which boasts estimated crude reserves of 2.2Bb.

Last Friday's auctions also signaled the entry of BP to Brazil's pre-salt region after the British major secured an interest in the Peroba block alongside Petrobras and CNODC.

"The rounds confirmed the prospectivity of Brazil's pre-salt acreage and are a direct tangible result of the country's recent regulatory reforms," Wood Mackenzie's Latin America research director Horacio Cuenca said.

"Although signature bonuses were considerable, by setting low minimum bids authorities were able to secure much higher-than-anticipated profit share rates through competition, aided by the outcome of the recent 14th round. These high rates will translate into billions of dollars in additional revenue for the country once production starts," he added.

The auctions marked the first time that private and foreign companies were able to bid for operating stakes in pre-salt areas, which are awarded under Brazil's production sharing regime.

International players were also buoyed by a 20-year extension to the Repetro tax incentive program and cuts to royalty payments.

ExxonMobil's success in the pre-salt offerings came a month after the company secured stakes in 10 blocks at Brazil's 14th round for concession contracts, marking its return to South America's largest country after a five-year absence.