By Gram Slattery, Marta Nogueira and Sabrina Valle
RIO DE JANEIRO, Dec 17 (Reuters) - The world's top oil
majors will compete in Brazil on Friday for the chance to snatch
up some of the world's most coveted offshore oilfields, a test
of the nation's investment climate and of large oil producers'
willingness to keep spending big on traditional assets.
Eleven companies, ranging from Exxon Mobil Corp to
Royal Dutch Shell PLC to relatively small local
players, are signed up to bid for two fields, known as Sepia and
Atapu. The assets, both located in a prolific offshore oil
formation known as the 'pre-salt', have a combined signing bonus
of 11.14 billion reais ($1.96 billion), with the government
asking 7.138 billion reais for Sepia and 4.002 billion reais for
Atapu.
Brazil attempted to sell off both fields in 2019, though
neither received bids https://www.reuters.com/article/us-brazil-oil-auction-idUSKBN1XH1X3,
even from state-run Petroleo Brasileiro SA, or
Petrobras. At the time, complex legal issues and rich signing
bonuses kept oil majors away https://www.reuters.com/article/uk-brazil-oil-petrobras-exxon-mobil-excl-idINKBN1XI2DC.
This time, bidding terms are considered more attractive https://www.reuters.com/article/idUSL1N2SZ1VO,
according to several industry sources consulted by Reuters,
thanks largely to big cuts in signing bonuses. The government
has also cut the percentage of oil that must be turned over to
the state, known as "profit oil", from 26.23% to 5.89% at Atapu
and from 27.88% to 15.02% at Sepia.
"Based on the interactions we're having with CEOs, we are
expecting competition," Rodolfo Saboia, the head of Brazil's oil
regulator, told Reuters.
Potential bidders include a consortium composed of
Petrobras, Exxon and Petrogal, a subsidiary of Portugal's Galp
Energia SGPS SA, Reuters reported on Thursday https://www.reuters.com/markets/commodities/exclusive-exxon-prepares-bid-new-oil-blocks-brazil-sources-2021-12-16.
Exxon declined to comment on the matter, while neither
Petrobras nor Galp immediately responded to comment requests.
Almost all the parties have held at least preliminary talks with
banks or operational partners.
The fields are considered attractive as Petrobras has
already discovered commercially recoverable oil in both blocks,
eliminating exploration risk.
If both fields are awarded, they could boost Brazilian oil
production by 12% over the next decade and bring in almost $40
billion in investment, the nation's Energy Ministry said on
Monday. Petrobras would receive $6.2 billion in compensation for
past investments in the two fields.
The 11 companies signed up for the auction, scheduled for 10
a.m. local time (1300 GMT), are: Petrobras, Exxon, Shell,
Petrogal, Chevron Corp, Ecopetrol SA, Equinor
ASA, Enauta Participacoes SA, Petronas,
TotalEnergies SE and Qatar Energy.
($1 = 5.68 reais)
(Reporting by Gram Slattery and Marta Nogueira in Rio de
Janeiro and Sabrina Valle in Houston; Editing by David Gregorio)
