• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 3 hours How to Create a Pandemic
  • 10 mins Which producers will shut in first?
  • 5 hours KSA taking Missiles from ?
  • 5 hours There are 4 major mfg of hydroxychloroquine in the world. China, Germany, India and Israel. Germany and India are hoarding production and blocked exports to the United States. China not shipping any , don't know their policy.
  • 5 hours A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 3 hours TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 4 hours Trump eyes massive expulsion of suspected Chinese spies
  • 10 mins WE have a suicidal player in the energy industry
  • 33 mins Eight Billion Dollars Wasted on Nuclear Storage Plant
  • 5 hours Breaking News - Strategic Strikes on Chinese Troll Farms
  • 19 hours Today 127 new cases in US, 99 in China, 778 in Italy
  • 20 hours America’s Corona Tsar, Andrew Fauci, Concedes Covid-19 May Be Just a Bad Flu With a Fatality Rate of 0.1%
Joao Peixe

Joao Peixe

Joao is a writer for Oilprice.com

More Info

Premium Content

Brazil’s Pre-Salt Auction Goes to Shell-Total Consortium

A consortium led by Anglo-Dutch oil major Shell, France’s Total and PetroChina and its sister company Cnooc, won the bid for Brazil’s Libra deep-water oilfield in a landmark auction on Monday, 21 October.

Shell and Total will each have a 20% stake in Libra, with the two Chinese companies holding a 10% stake each and the rest held by Brazil’s state-run Petrobras.

A 41.65% cut of “profit oil” from Libra will go to the government, which it will then be able to sell on its own, in line with the minimum requirements for the auction.

Related article: Brazil could Mark a Change in Strategy for Chinese Oil Companies

As Oilprice.com reported earlier in its premium newsletter, Oil & Energy Insider, Chinese involvement in a consortium for Libra was inevitable, though the expectation was that China would be the dominant force in the auction. The fact that Shell and Total will each have a 20% stake is promising for the Brazilian government and efforts to attract more private investment.  

“This is a turning point between the past and the future,” said Edison Lobão, Brazil’s oil minister, in a speech before the auction. “With the discovery of the pre-salt fields we will more than double our certified oil reserves in Brazil.”

It wasn’t a tough win since this was the only consortium bidding, but it was a hard-won day for the government, which had to deal with protests that turned into clashes with security forces outside the auction venue. Security forces used tear gas and rubber bullets to disperse protesters. At least six people were injured in the incident.

Unions said the auction of Libra represented the “fire sale” of Brazil’s natural riches to “foreign capital”.   

Libra is estimated to hold between 8 billion and 12 billion barrels of oil.

Related article: 40,000 Petrobras Employees Strike over Upcoming Libra Oilfield Auction

Petrobras is in deep debt largely because of government policy that has forced the company to continue borrowing to cover investments while it cannot recoup costs due to the fact that it is not allowed to charge its own consumers world prices. Brazil desperately needs new oil finds to come online, and the first step is the Libra auction—providing that the government indeed introduces measures that would help Petrobras actually finance its side of the deal, according to experts at Southern Pulse.

With a $6.8 billion mandatory signing bonus and costly exploration and development in the forecast, most analysts suspect it could take nearly 20 years before the winner of the October auction starts making a profit, Southern Pulse said.

By. Joao Peixe of Oilprice.com


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News