Lloyds List: Brazil's latest licensing round brings in $480m from bidders: “Shell made a big play to gain interests in Espirito Santo and Santos, gaining five deepwater exploration blocks.”: Tuesday 25 October 2005
National Petroleum Agency chief calls for more funds from government for geological research to gain data that could be available for future auctions
BRAZIL'S latest licensing round was a resounding success for the government, state oil company and international operators as around Reals1.1bn ($480m) was raised in bidding fees, writes Martyn Wingrove.
The National Petroleum Agency (ANP) awarded 251 of the 1,134 exploration blocks offered in the seventh hydrocarbon licensing round, gaining Reals1.09bn in fees.
ANP president Haroldo Lima said the round was a success and praised the companies that bid on frontier exploration blocks.
But he called for more funds from the government for geological research to gain data on hydrocarbon basins that could be available for future licence rounds.
'We only have enough data for one more licensing round and the success of this auction should show the government the importance of the oil industry,' said Mr Lima.
State oil company Petroleo Brasilero (Petrobras) paid half of the total bidding fees to the ANP to participate in the most onshore and offshore blocks.
It paid Reals503m and acquired 96 new blocks, of which 73 were onshore and 23 offshore. Petrobras is the operator on 70 of these and is a partner to other operators on another 26.
The Santos basin was the star of the show in the round with companies paying the largest fees to gain exploration acreage in the prospective deepwater areas. Of the 279 blocks offered in the basin 19 were awarded by ANP.
The highest bid made for a single block was Reals160m from Petrobras and BG Group for the S-M-508 block in Santos. It is thought to contain large gas condensate prospects similar to discoveries in nearby block S-M-510.
Other offshore basins including Campos and Espirito Santo also gained large fees from international oil companies for blocks.
US independent Devon Energy paid the second largest fee of Reals116m to win the rights to explore the C-M-471 block in the Campos basin, while the highest bid for an Espirito Santo block was Reals52m by Repsol YPF and Petrobras for ES-M-737.
Petrobras, Repsol, BG and Shell piled into the round to gain licences in the Santos Basin, where all four companies have already discovered oil and particularly gas deposits, including the large Mexlih'o and Merluza fields.
Petrobras went for a three-way strategy in the seventh round to gain positions in all the available basins.
It took 63 blocks in mature areas to help build oil production through targeted exploration and by using the latest well technology.
It said it successfully bid on 18 blocks in high exploration potential areas of the Espirito Santo, Campos and Santos basins with the objective of consolidating its position in deep and ultra-deepwater project.
The company also gained 15 blocks in frontier exploration areas such as the deepwaters of the Potiguar basin and onshore S'o Francisco and Solimoes basins.
'The new concession areas will be instrumental in allowing us to replenish our portfolio of exploratory blocks,' said a Petrobras spokesman.
International oil companies gained a flurry of licences in offshore areas.
Repsol YPF was involved in 12 successful bids for Santos blocks, one for a licence in Campos and two in Espirito Santo as it drives to build a gas production base in the country.
BG went in large with four block wins in Santo, and will be a key participant in exploring the S'o Francisco basin with Petrobras after gaining six blocks.
Shell made a big play to gain interests in Espirito Santo and Santos, gaining five deepwater exploration blocks.
US independent Devon was awarded four blocks. Canadian group EnCana will participate in two blocks, while Eni of Italy and New York-based Amerada Hess are in one block each.
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