• 6 minutes WTI @ 67.50, charts show $62.50 next
  • 14 minutes Saudi Fund Wants to Take Tesla Private?
  • 18 minutes California Solar Mandate Based on False Facts
  • 3 hours Starvation, horror in Venezuela
  • 3 hours Monsanto hit by $289 Million for cancerous weedkiller
  • 27 mins Anyone Worried About the Lira Dragging EVERYTHING Else Down?
  • 1 hour Oil prices---Tug of War: Sanctions vs. Trade War
  • 6 hours Why hydrogen economics is does not work
  • 2 hours Correlation does not equal causation, but they do tend to tango on occasion
  • 10 hours WTI @ 69.33 headed for $70s - $80s end of August
  • 9 hours WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 1 hour Russia retaliate: Our Response to U.S. Sanctions Will Be Precise And Painful
  • 15 hours What Turkey Sanctions Are Really About
  • 14 hours Saudi Production Cut or Demand Drop?
  • 12 hours Merkel, Putin to discuss Syria, Ukraine, Nord Stream 2
  • 8 hours Saudi Aramco IPO Seems Unlikely
Alt Text

Russia Reverses Almost All Its Oil Production Cuts

Russia reversed almost all of…

Alt Text

Why Saudi Arabia Cut July Oil Production

Saudi Arabia’s oil production in…

Alt Text

Saudi Crackdown On Canada Could Backfire

The Saudi/Canadian spat that started…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

You Didn’t Hear About It, But Every Oil Pro Is Watching This Gov’t Decision

offshore rig

It barely got any coverage in the press this week. But one of the biggest happenings in oil just came down, in a place everyone in the petro-world is looking at.

Offshore Brazil.

As I’ve discussed, there’s been a lot of hope for Brazil the last several months. With the government moving to make big-upside fields in the subsalt and presalt plays much more attractive for international operators.

One of the biggest changes was scrapping a law that required state E&P Petrobras to take a minimum 30% in all offshore fields — and act as operator. With this move raising hopes that foreign firms would be able to own and operate licenses for the first time ever.

But Brazil’s government did an abrupt about-face last month. Putting in new rules that allow Petrobras to opt for preferential rights in offshore bid rounds. And this week, the state firm took up the offer — declaring that it will exercise preemptive rights as part of two upcoming rounds.

Here’s how it works. When a bid round approaches, Petrobras is allowed to name blocks in which it will seek preferential rights. This week’s nomination by the company named three such projects: the Sapinhoá field, and the Peroba and Alto de Cabo Frio Central. Related: 4 Wildly Different Oil Price Scenarios For 2020

That election instantly changes the dynamics around the upcoming bid rounds. With three of the seven blocks being offered for bids now having Petrobras attached to them — leaving fewer options for international firms who want to own and operate.

Under the rules brought in last month, regulators now get to choose what percentage Petrobras will get in the declared projects. But it will be at least 30 percent — and Petrobras will have right of first refusal on acting as operator.

The key question now is, will foreign E&Ps back away from bidding? Watch for the results of the next licensing round, planned for Q3 this year.

Here’s to the elephant in the room.

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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