MercoPress. South Atlantic News Agency

Brazil's newest oil auction attracting oil majors

Brazil expects the transfer of rights auction that will be held on November 6 to bring in US$ 25 billion in licensing fees

Brazil’s newest oil auction is attracting some of the world’s biggest oil majors such as BP, Chevron, CNOOC, ExxonMobil, and Shell, the Brazilian government said on Monday, according to Bloomberg.

Brazil expects the transfer of rights auction that will be held on November 6 to bring in US$ 25 billion in licensing fees for an area that Brazil had originally given to Petrobras to pump 5 billion barrels of oil. But Petrobras found more oil than that, leaving Brazil to auction off the rest, which could be between 6 billion and 15 billion additional barrels, according to the regulator.

As Petrobras has already found a significant amount of oil in the area, the interest in the upcoming auction is no surprise. The areas up for sale lie in Brazil’s presalt zone off Brazil’s coast, and in addition to Chevron, Exxon, and Shell, 14 other companies have expressed interest as well. The blocks up for sale are the Buzios, Atapu, Itapu, and Sepia blocks.

Other oil majors that have registered for the auction includes other heavy hitters including CNODC, Equinor, Galp Energia, Petrogal, Petrobras, and Total, to name a few.

This auction is particularly attractive due to Petrobras already discovering oil in this area. Still, the blocks are deepwater blocks, and attract mostly bigger oil companies who have deep pockets.

The auction just last week cleared a significant hurdle after the Brazilian Congress approved part of a energy bill that determines how the revenue sharing will be handled for the auction.

The auction is important for Brazil, who’s national debt has risen to a new record high of 79.8% of GDP, according to central bank figures as reported on Monday.

By Julianne Geiger for Oilprice.com