MercoPress. South Atlantic News Agency

Brazil optimistic with next oil licencing round

The strong international demand and prices for oil should boost corporations interest for the next Brazilian oil licencing round scheduled August 17/18, said Sebastiao do Rego Barros, CEO of the country's National Petroleum Agency, ANP.

"Given the current situation, high oil prices, and structural factors such as a growing long term demand for oil and gas, leads us to believe that the next licencing round will be a great success", indicated Mr. Rego Barros adding that 27 companies had already contacted ANP, and 23 of them paid the registry fees for the round.

Mr. Rego Barros added that of the 23 corporations five are participating for the first time and even more encouraging several of the so called "major" oil companies which were absent in last year's round, have also registered.

"So far we've collected 6,4 million Reales (2 million US dollars), a clear indication of the growing interest in the coming August round", remarked Mr. Rego Barros. The sixth round includes 913 tranches in 12 sedimentary basins, some of them called "blue tranches" considered "very attractive" because the country's oil company Petrobras has done extensive surveying and exploring.

According to ANP reports the highly potential blue tranches and surrounding areas such as the Santos basin where recent discoveries of oil have been confirmed, represent 7% of the bid. Another 32% of the tranches are in mature basins and the rest 61%, in frontier provinces with scant geological background information.

As to how much investment the sixth round is expected to generate for Brazil, ANP sources said they are "quiet optimistic", however they declined to comment on the 20 billion US dollars anticipated by the Brazilian Ministry of Mines and Energy.

"We believe all tranches will be licenced and that the estimated reserves of 3,3 billion barrels of oil will be confirmed", said Milton Franke, ANP Licencing Manager.