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Libya’s Oil Revenue Takes A Beating

Libya’s Oil Revenue Takes A Beating

Libya’s oil revenue fell significantly…

Brazil Announces New Round Of Pre-Salt Oil Block Auctions

Brazil

Brazilian energy policy council CNPE approved on Thursday the fourth round of auctions for the coveted pre-salt oil blocks and set the date of the auction for June 7, 2018.

The energy policy council also approved the 15th round of the auction for bidding under the concession regime on non-pre-salt oil blocks, and scheduled it for March 29.

The pre-salt auction will include blocks in the Santos and Campos basins, while the auction for 70 blocks under the concession regime includes offshore blocks in the Ceara, Potiguar, Sergipe-Alagoas, Santos, and Campos basins, and onshore blocks in the basins Parana and Parnaiba.

The council postponed the auction of oil blocks in the Foz do Amazonas basin for 2019 in order to allow for completion of the environmental licensing of blocks auctioned in previous rounds in the basin. 

Two weeks ago, Brazil held the second and third rounds of auctions of blocks in its pre-salt layer, offering a total of eight blocks in the Campos and Santos basins. While two blocks received no bids, the other six were won by consortia of various large oil companies including Exxon, Shell, BP, Total, and Petrobras.  

State oil firm Petrobras—which has the preemptive right to act as operator in the pre-salt blocks—is leading the consortia as operator in three of the winning blocks, while Shell and Statoil are the other leaders of consortia and proposed operators in the other three blocks.

Related: Is U.S. Biofuel In Jeopardy?

Just a couple of days before the second and third rounds, Wael Sawan, Executive Vice President Deepwater at Shell, said that his company was confident that it can produce oil from Brazil’s promising pre-salt layer for less than $40 per barrel.

The pre-salt layer holds high-quality and prolific oil reserves, and recent Brazilian reforms have made them more attractive assets, Sawan told Reuters. Shell believes that it can extract oil from those fields below its targeted breakeven cost of $40 a barrel, otherwise it would not have taken part in the auction, Shell’s manager noted.

By Tsvetana Paraskova for Oilprice.com

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