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There are no plans to tender transferred rights to develop oil-producing fields by the end of this year, Brazil’s deputy energy minister Marcio Felix said, as quoted by Reuters. The rights to develop these fields belong to state energy giant Petrobras, but the government, pressed for cash, has considered tendering them to other companies.
However, before this could happen, the government and Petrobras first have to agree on the value of the assets in the Santos Basin to which the company holds development rights. In 2010, when the then-government awarded these rights to Petrobras, they held estimated reserves of 5 billion barrels of crude, but this crude was less costly in 2010 than it is now.
Beside an agreement on the value of the rights, there is also a legislative obstacle to the transfer-of-rights tender. The lower house of Brazil’s parliament has already approved the bill that would allow Petrobras to cede up to 70 percent of the development rights, but now the Senate has to vote on it. This needs to happen by September 15 for a tender to be scheduled for this year.
“It would be hard,” Felix said as quoted by Reuters, “but we haven’t thrown in the towel yet.”
The Santos Basin, in Brazil’s pre-salt zone, is one of the hot spots in the oil industry right now. It contains billions of barrels of crude and supermajors have been expanding their presence in Brazil in precisely this zone. This suggests there will be more than sufficient interest from foreign field operators in the transfer of rights, which should motivate Senate to move quickly and approve the necessary legislation.
On the other hand, the debate of the value of the assets between Petrobras and the government could delay things. It has been going on for four years now, after the area was evaluated and found to be commercially viable. Both Petrobras and the government demand billions of dollars from each other because of the changes in oil prices since 2014.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.