Lack of internal support for…
Very low inventories of oil…
The oil auctions in Brazil could help cut Brazil’s deficit for this year to below US$24 billion (100 billion Brazilian reais), the Secretary of the Treasury, Mansueto Almeida, said on Thursday.
The government expects the transfer-of-rights auction on November 6 to fetch as much as US$11.56 billion (48 billion reais), Almeida told local television channel GloboNews, as carried by Reuters.
This month and next, Brazil is holding three oil auctions for different areas under different regimes in its offshore basins.
The first auction, held on October 10, attracted major international oil companies, with Big Oil scooping up exploration blocks in the bid round that fetched a record total amount of signing bonuses. Total, Shell, BP, ExxonMobil, Chevron, Petrobras, Petronas and Repsol all won oil exploration blocks in the concession bid round.
After winning an exploration license in the auction, Total confirmed last week that it would not participate in the upcoming Transfer-of-Rights (TOR) Surplus Round on November 6, because the competitive tender is only offering non-operated interests.
In the 6th production sharing round, to be held on November 7, Brazil’s oil regulator said this week it had approved the participation of 17 companies in the bidding, including BP, Chevron, Equinor, ExxonMobil, Petrobras, Repsol, and Shell. The number of participating companies is a record for this kind of oil auction in Brazil, the regulator said.
Related: $300 Oil: What If The Attacks In Saudi Arabia Had Destroyed Production?
Brazilian Mines and Energy Minister Bento Albuquerque said that the positive first auction last week signals that the other two bidding rounds would also be successful.
Commenting on the bid round from last week, Juliana Miguez at Wood Mackenzie’s Latin America upstream said that frontier acreage failed to attract interest, with majors focused instead on just the Santos and Campos basins.
“The Majors and Petrobras look to be keeping their powder dry, preferring to wait for the two upcoming rounds,” Miguez added.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.