Brazil to auction 92 oil blocks this year
– which equals only size three of Guyana’s blocks combined
Kaieteur News – Global energy information provider S&P Global has reported that Brazil has cleared 92 offshore exploration and production oil blocks for licensing at a public auction. The blocks were approved by the National Energy Policy Council (CNPE), the government agency responsible for advising the President on energy.
The blocks will be part of Brazil’s 17th bidding round, and will be sold under the concession agreement – an alternative to the Production Sharing Agreement (PSA) to which Brazil is now clearing more, says the National Petroleum Agency (ANP), Brazil’s oil industry regulator. The concession agreement is being viewed more favorably, and Brazil has come under pressure to make its regulatory infrastructure more attractive to investors.
“92 blocks will be proposed in the offshore sedimentary masses of Potiguar, Campos, Santos and Pelotas,” the ANP is quoted as saying. The blocks will cover 53,900 square kilometers.
To put that into perspective, the combined award of Guybro’s Stabroek, Kaieteur and Corentyne blocks is 52,840 square kilometers. By contrast, Brazil managed to divide such acres into 92 blocks.
Guyana had ruled its oil in violation of the legal guidelines for block size, giving them more acres than enacted for them. It is worth noting Guyana that there will be an attractive price in every block in Brazil, securing a lot of revenue for the Brazillian people.
Guyana has never conducted a bidding round. His blocks were generally awarded on a first-come, first-served basis. It only ever received one signing bonus, US $ 18M from ExxonMobil when the government gave PSA to the supermajor and its partners in 2016.
Guyana is considering getting its first bidding round this year, though the country has not updated its legislation in this regard. Nor has he made pronouncements about a new model PSA.
It has nevertheless attracted a lot of excitement about the many discoveries made in the Guyana-Suriname basin, especially the finds of the Stabroek 18 Exxon block.
Brazilian geologists, according to S&P, believe that the same geological drama ExxonMobil found in its 18 discoveries extends along the northern coast of Brazil in the Foz do Amazonas and Para-Maranhao basins. However, these basins are not part of the 92 blocks approved for the 17th Brazilian proposal round, due to concerns from environmental groups about a coral reef found in the area.
ANP Brazil is expected to hold a public audience to discuss the auction rules and the concession contract on Feb. 3, and the public bidding round is set for Oct. 7.