Government raises R$ 916 million with concession of 4 pre-salt areas

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The government granted 4 of the 11 blocks offered in the last auction of areas for pre-salt exploration under the Bolsonaro administration. The auction held this Friday (16th) raised BRL 916 million in signing bonuses.

The blocks will receive a minimum investment of BRL 432 million in research for oil reserves. The value tends to grow into the billions in case of discoveries of commercial reserves.

Petrobras took a stake in three of the four blocks tendered. In one of them, Água Marinha, it had lost the dispute to a consortium formed by Total, Petronas and Qatar Energy, but exercised its preemptive right guaranteed by law and ended up with 30% of the consortium.

The state-owned company also won the most expensive block in the bidding, Norte de Brava, with the payment of BRL 511 million in bonuses and the commitment to deliver 65.71% of production, after deducting costs, to the government.

It is an area contiguous to the state-owned discovery already in production in the Campos Basin, which anticipates revenue for new concessionaires. The company won a dispute with a consortium formed by Equinor and Petronas.

It was also located in the Sudoeste de Sagitário block, in partnership with Shell. BP alone won the fourth block, Boomerangue.

It was the first pre-salt auction under the permanent offer model, in which auctions are only scheduled after oil companies express interest in the areas. Historically, the format has yielded smaller gains to the government than traditional auctions.

The dispute took place under the shadow of changes in the State Law, which concerns oil companies that are Petrobras partners in pre-salt investments.

Experts expected some competition, but considered that the remaining pre-salt areas no longer have the size of the giant discoveries made in the region and offer greater exploratory risk, which should result in lower premiums.

If it granted all areas, the government would raise BRL 1.28 billion in signature bonuses – by way of comparison, the last auction of this type, in 2019, awarded only one block for the equivalent today of BRL 6.2 billion.

In a speech before the auction, the Minister of Mines and Energy, Adolfo Sachsida, said that more important than the collection is “the maintenance of this economic activity, generating jobs and income for the population”.

The auction was the subject of a public civil action filed by the environmental organizations Arayara and Observatório do Petróleo e Gás, which question the overlapping of the blocks offered with conservation areas for sensitive species or endangered species.

They also say that the opinions of the ministries of the Environment and of Mines and Energy that guarantee the auction disregard these restrictions and that there are no estimates of greenhouse gas emissions from oil production in eventual discoveries.

“It is evident that the mere offer of the aforementioned blocks with the irregularities pointed out completely blemishes the process, and even generates legal uncertainty for the private initiative”, say the organizations, in the lawsuit.

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