Brazil's PPSA to auction designate
pre-salt oil marketer in April
Brazil to designate pre-salt oil marketer in April
By Nathan Walters/Argus
Petroleumworld 04 01 2021
Brazil's state-owned pre-salt company PPSA plans to hold an auction on 28 April for a marketing agent to sell the company's share of crude production from the giant Tupi offshore field.
The auction for the five-year marketing contract will be a first for Brazil, which is still experimenting with different ways to market the government's take from production-sharing contracts that govern pre-salt acreage.
Consortiums of up to three members, including a trading or logistics company from the same economic group as the consortium leader, are cleared to bid on the contract, so long as the leader is producing and exporting pre-salt crude, according to the final tender notice.
The requirement effectively limits the leadership role to a handful of companies, including Brazil's state-controlled Petrobras, Shell and Portugal's Galp. The process could also draw bids from Chinese state-owned CNOOC and CNPC. Most of Brazil's pre-salt crude is absorbed by China.
The agent will be responsible for all facets of trading, including identifying buyers, offloading from floating production, storage and offloading (FPSO) units, transportation, insurance, independent inspection and hedge positions.
PPSA says the contract will cover around 4mn bl of oil with an estimated value of $218mn.
PPSA holds a 0.551pc non-equity stake in a unitized portion of Tupi, Brazil's top oil-producing field with the around 1mn b/d of 28°API. The firm currently receives around 2,800 b/d from the Santos basin field.
Petrobras holds a 65pc operating stake in the BM-S-11 block where Tupi is located. Shell holds a 25pc interest and Galp the remaining 10pc.
Established in 2013 to represent the federal government in production-sharing contracts, PPSA expects to generate around $75.3bn from sales in 2021-30.
PPSA is among the state-owned companies that the government plans to privatize this year.