All blocks awarded in Brazil's 5th production-sharing round

On Friday, all four blocks in Brazil's fifth production-sharing round were awarded to major oil firms.

The Saturno block, in Santos basin, was awarded to a Shell-Chevron consortium. The firms offered 70.20% of profit oil to the government, 300% more than the minimum, and the biggest amount offered during the tender.

Also in Santos basin, a partnership between ExxonMobil and QPI won the Titã block by offering 23.49% of profit oil. The Pau Brasil block will be operated by a consortium led by BP, with the participation of Chinese CNOOC and Colombian Ecopetrol, which debuts in the pre-salt.

State-run Petrobras was the sole bidder for the Sudoeste de Tartaruga Verde area, in Campos basin, in which it had already executed its pre-emption right.

In total, the Brazilian government raised 6.82bn reais (US$1.7bn) in the auction and the obligatory investments for the areas awarded amount to 1bn reais. According to Décio Oddone, director of regulator ANP, production from these four blocks will generate 240bn reais in profit oil to the government during the concession period.

"We have now six operators in the pre-salt area under the production-sharing contract model. This diversification is very positive," Oddone added.

The round marked the last oil and gas tender under President Michel Temer's administration. Although some of the presidential candidates for the October 7 election argue against maintaining a regular offering, secretary of the energy ministry Márcio Félix believes it is unlikely that tenders stop or contracts for awarded areas are revoked, no matter which party is elected.

"Brazil will not stop having auctions; what could change is the frequency or the number of areas available, but even Petrobras will continue having the need for new areas," Félix explained.

ANTI-CORRUPTION PACT

On Thursday, President Temer visited the Rio Oil and Gas fair. Temer participated in the signing of an integrity pact among 14 oil firms, promising to establish ethical principles and confront corruption. Petrobras, Shell, BP, Chevron, Total, Equinor, Repsol Sinopec, Siemens, TechnipFMC, Schlumberger, Halliburton, GE Oil & Gas, Ocyan and Aker Solutions signed the document.