Brazil’s open acreage round draws US$270mn in investments

Bnamericas Published: Friday, December 16, 2022
Brazil’s open acreage round draws US$270mn in investments

Brazil’s first open acreage production sharing round attracted 1.44bn reais (US$270mn) in investments and 916mn reais in signing bonuses, as four offshore blocks were acquired by Petrobras and international oil companies (IOCs). 

The result of the auction held on Friday by the local regulator ANP split the opinions of experts. 

Petrobras took three assets as operator: Água Marinha, in partnership with TotalEnergies and QatarEnergy; Norte de Brava, with a 100% stake, in the Campos basin; and Sudoeste de Sagitário, with Shell, in the Santos basin.

Meanwhile, UK’s BP Energy acquired the Bumerange block, in the Santos basin. 

The contracts are expected to be signed by April 28, 2023.

No proposals were presented for the seven other areas that were on offer: Ágata, Esmeralda, Jade, Turmalina, Tupinambá, Itaimbezinho and Cruzeiro do Sul.

Source: ANP

The open acreage production-sharing tender was designed for contracting exploration and production for oil and natural gas in blocks in the pre-salt polygon and other strategic areas. 

In this system, blocks are permanently available and the rounds begin at the request of the registered companies through the submission of a declaration of interest to the ANP for one or more available blocks, accompanied by a guarantee of supply.

For Marcelo de Assis, director of upstream research for Wood Mackenzie, the result of the tender was within expectations. 

“The main blocks were acquired, two where Petrobras had previously demonstrated interest, and Sudoeste de Sagitário, adjacent to the Sagitário area, where Petrobras and Shell are partners, so it makes sense,” he told BNamericas.

“Regarding Bumerangue, it’s next to two blocks owned by BP,” Assis added.

Shell's president, Cristiano Pinto da Costa, said that the company is very excited about the new acquisition. 

"This production sharing open acreage round further increases our presence in the country, which already accounts for approximately 13% of Shell's global oil and gas production," he said in a public statement. 

Mahatma dos Santos, a researcher at the local strategic petroleum studies Ineep, deemed the result a failure.

"Considering that, in the open acreage rounds, the blocks only go to auction if at least one company presents prior interest, that all the auctioned blocks are located in the pre-salt polygon where the drilling success rate is above 80%, in addition to the fact that the government reduced local content requirements, the balance of the volume of signature bonuses and the government's share of oil in profit is very negative," he told BNamericas. 

In Santos’ view, the timing of the auction was terrible, coming just before a change in government (Brazil's new government takes over on January 1) generating uncertainties for potential investors. 

For the researcher, the outcome also indicates that there is an urgent need to resume investments in prospecting in new provinces for oil and natural gas production, such as the equatorial margin. 


Shell, TotalEnergies and QatarEnergy, alongside companies like Petronas, have been quite active in auctions held by the ANP in recent years, such as in the four areas acquired in the second transfer of rights of surplus oil auction carried out in December 2021. 

Assis pointed out that Shell and TotalEnergies are operators in Brazil and are still investing in the country, while Qatar, which started out very focused on gas, is diversifying into deepwater, but always as a partner. 

“And Petronas is seeking to rebuild reserves outside Malaysia as part of its internationalization strategy,” he said. 

On the other hand, ExxonMobil has signaled that it no longer has much interest in investing in Brazil. 

“Exxon had an aggressive participation after the opening of the market [in 2017], but its exploratory wells had negative results, both in the pre-salt and in concession areas,” Marcelo de Assis said. 

Meanwhile, areas beyond the 200 nautical-mile the Brazilian exclusive economic zone (EEZ) have not attracted the interest of oil companies, due to the higher costs and risk. 

In the consultant's view, an important question now is whether the new federal government, led by Luiz Inácio Lula da Silva, will maintain the open acreage model, including for production sharing blocks.

"This is a functional system, and Brazil already has the maturity to maintain it," he stated.

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