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Big Oil majors will bid for two exploration blocks in Brazil's prolific pre-salt zone today, with the eleven competitors including Exxon and Shell, as well as Brazilian companies.
This will be the second tender of the two blocks, Sepia and Atapu, after a tender in 2019 failed to attract any bids. The state is asking for a signing bonus of almost $2 billion for the two blocks, Reuters reports.
"Based on the interactions we're having with CEOs, we are expecting competition," the head of Brazil's oil watchdog told Reuters.
For Exxon, this would be the first big spending decision after it reported a massive loss of $22.4 billion for last year amid the pandemic, Reuters notes.
If both blocks find suitors, they may eventually boost Brazil's oil production by as much as 12 percent, bringing in some $40 billion in total investments over the next ten years, according to Brazil's energy ministry.
Brazil is putting a lot of effort into boosting its oil production. Earlier this year, the country's Mines and Energy Minister, Bento Albuquerque, said that by the end of the decade, Brazil could become the fifth-largest crude oil exporter.
"In 2030, when we reach a production of 5.3 million barrels of oil per day, Brazil will become the fifth largest exporter in the world," Albuquerque said, adding that Brazil's crude and liquids production is set to jump from 3.3 million barrels per day (bpd) now.
Currently, Brazil is out of the top ten of the world's largest crude oil exporters, a ranking where Saudi Arabia is firmly in the lead, with Brazil at number 12. State oil major Petrobras recently unveiled plans to invest some $68 billion in boosting production over the next five years, which constitutes 82 percent of its total investments planned for the period between 2022 and 2026.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com