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Brazil expects to reap up to the equivalent of US$1.4 billion from three oil and gas exploration licensing rounds this year, Brazil’s Energy Minister Fernando Coelho Filho said on Thursday.
The pre-salt exploration licensing round is expected to account for most of the expected revenues, with the government targeting to raise at least US$941 million (3 billion Brazilian reais), the minister noted. Brazil is working to slate the pre-salt licensing round for the first half of the year, compared to initial plans to hold it in the second half of 2017, he added.
Brazil plans to fare much better this year compared to the previous oil and gas auctions of 2015 when few companies showed scant interest in exploring oil and gas opportunities.
In October last year, Brazil’s Parliament passed legislation removing the requirement that state-held Petrobras be a participating partner in all pre-salt project areas. Up to that point, Petrobras by law was required to be a partner in all developments, guaranteeing that Brazil’s government would own an interest in every field. By removing the requirement for state participation, Brazil will now be allowing international exploration and production companies to bid for pre-salt oilfield development.
Even before that legislation was passed, Norway’s Statoil moved to acquire assets in the pre-salt layer, agreeing to buy from Petrobras a 66-percent stake in the Carcara field in the Campos Basin in a deal worth US$2.5 billion.
Earlier this week, energy consultancy Wood Mackenzie said in its global upstream outlook for 2017 that Brazil’s pre-salt, together with the Permian Basin in the U.S., would be the hot oil plays for development this year, with both areas having materiality and one of the lowest development breakevens worldwide.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.