• 3 minutes Looming European Gas Crisis in Winter and North African Factor - a must read by Cyril Widdershoven
  • 7 minutes "Biden Targets Another US Pipeline For Shutdown After 'Begging' Saudis For More Oil" - Zero Hedge Monday Nov 8th
  • 12 minutes "UN-Backed Banker Alliance Announces “Green” Plan to Transform the Global Financial System" by Whitney Webb
  • 7 hours Microbes can provide sustainable hydrocarbons for the petrochemical industry
  • 13 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 58 mins CO2 Electrolysis to CO (Carbon Monoxide) and then to Graphite
  • 11 hours Hunter Biden Helped China Gain Control of Cobalt Mines in Africa
  • 4 days Is anything ever sold at break-even ? There is a 100% markup on lipstick but Kuwait can't break-even.
  • 5 days Building A $2 Billion Subsea Solar Power Cable From Chile To China
  • 10 hours NordStream2
  • 4 days Modest drop in oil price: SPRs vs US crude inventory build
  • 4 days 2019 - Attack on Saudi Oil Facilities.
  • 4 days Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 13 mins "Gold Set To Soar As Inflation Fears Mount" by Alex Kimani
  • 6 days Ukrainian Maidan after 8 years
  • 6 days Peak oil - demand vs production

Breaking News:

Expect Cheaper Gasoline This Week

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




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News