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Supermajors Shell and TotalEnergies were among the winning bidders in an oil auction in Brazil that offered 59 exploration blocks, including several in the Santos Basin and several in the Potiguar Basin.
The auction fetched $90.10 million in signature bonuses, which represented a premium of over 800 percent. Exploration in the blocks could draw some $86.5 million (406.3 million reais) in investments.
Shell won the rights to explore in six blocks in the Santos Basin, Reuters reported. The supermajor was bidding in consortium with Colombia’s state oil company Ecopetrol.
TotalEnergies also won the rights to explore in the Santos Basin, but for two blocks.
Brazilian company 3R Petroleum won exploration licenses for six blocks in the Potiguar Basin.
Brazil is among the ten largest oil producers globally, but it has major ambitions to move up the ranks. Earlier this month, the country’s Minister of Mines and Energy, Bento Albuquerque, announced the government planned to expand national production of oil by 300,000 bpd this year, or about 10 percent from last year.
Currently, Brazil produces about 3 million bpd.
Commenting on the supply situation in global oil, Albuquerque told Brazilian media that “Countries that have stock, like the US, Japan, India, and others, are releasing. But there also has to be an effort to increase production.”
“She [Jennifer Granholm] asked me if Brazil could be part of this effort and I said ‘of course it can’. We are already increasing production, while most OECD countries have reduced. We have increased our production in the last 3 years.”
Meanwhile, Brazil’s domestic oil demand is on the rise, too. The U.S. Energy Information Administration has forecast that Brazil’s oil demand will expand by 34 percent over the next 30 years, and state oil major Petrobras is working on production growth.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com