Mexico



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Chevron, Shell clinch Saturno block in Brazil pre-salt oil tender

 

 

By Alexandra Alper and Gabriel Stargardter

RIO DE JANEIRO
Petroleumworld 10 01 2018

Royal Dutch Shell Plc and Chevron Corp on Friday led big bets by oil majors seeking to clinch key stakes in Brazil's coveted offshore oil play, shrugging off concerns over presidential elections that have cast a pall of uncertainty over the industry.

Shell and Chevron pledged to the government a high 70.2 percent of the oil it will produce after costs to clinch the choice Saturno block, while Exxon Mobil Corp and Qatar Petroleum International landed the Tita area with a 24.5 percent offer, with both groups locking in key real estate in the prized Santos basin.

By placing all four blocks, Brazil's cash-strapped government raked in 6.82 billion reais ($1.71 billion), days ahead of the most uncertain presidential vote in a generation, as oil companies scrambled to take advantage of what could be the last oil auction in years.

Leftist candidates have proposed slowing down oil auctions, revising market-friendly legislation or even clawing back areas already awarded. Meanwhile, right-wing presidential front-runner Jair Bolsonaro has floated the idea of privatizing state oil firm Petrobras and has said he would champion a market-friendly approach.

“We take a long term view on these things,” said Felipe Arbelaez, chief for Latin America of BP Plc, which took the Santos Basin's Pau Brasil block in a consortium with Colombia's Ecopetrol and China's CNOOC Ltd.

“Ultimately, we think Brazil has a long track record of respect of law, respect of contracts so we're not very concerned about the elections,” Arbelaez said.

SPONSORED STORIES

Lured by world-class geology, shrinking reserves and rising oil prices, companies have already dropped billions of dollars in Brazil, Latin America's top oil producer, to lock in stakes in its pre-salt layer, where billions of barrels of oil are trapped under a thick layer of salt offshore.

Oil majors' interest has been boosted by industry-friendly policies under center-right President Michel Temer, including loosening rules favoring local suppliers, tax sweeteners and the removal of a requirement that Petrobras be sole operator in pre-salt blocks.

But a win by a leftist candidate could walk back many of the market-friendly policies. Fernando Haddad, a leftist academic who has climbed into the No. 2 spot, has vowed to recover the pre-salt to serve Brazilians instead of foreign oil companies.

He also pledged to restore stricter requirements for using local suppliers. Ciro Gomes, a leftist former state governor in third place, has threatened to freeze auctions and expropriate blocks already handed out.

Oil prices rose more than 1 percent on Friday, with Brent climbing to a fresh four-year high, as U.S. sanctions on Tehran squeezed Iranian crude exports, tightening supply.

But oil majors discounted the role of the price rise in betting plans in Brazil.

“Our decisions are not made based on the day's change or price per barrel,” said Andre Araujo, Shell's country chief in Brazil. “They are investments for 30 years...we do not make decisions based on volatile issues,” he added.

Under rules set up for Brazil's pre-salt oil play, consortia vie for blocks by offering the most after-cost oil to the Brazilian government, and agree to pay a fixed signing bonus.

Petrobras was the sole bidder and winner the Southwest of Tartaruga Verde block in the Campos Basin. It had exercised its right to express interest in the block months before the Friday bid round. ($1 = 4.0235 reais)


________________________


Story by Alexandra Alper and Gabriel Stargardter ; Reporting by Marta Nogueira and Alexandra Alper Editing by Chizu Nomiyama from Reuters.

reuters.com 09 28 2018


We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1


November 13 - 15, 2018.

Gubkin University, Moscow
SPE Student Chapter

 

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.