Brazil was able to cop a total of US$12.882 billion in signing bonuses from 15 block awards in its pre-salt area since the state-owned Petrobras made the first discovery back in 2006. This is according to the recent Economic Commission for Latin America and the Caribbean (ECLAC) report.
The pre-salt is a sequence of sedimentary rocks formed more than 100 million years ago in the South Atlantic where oil and natural gas deposits have formed under a 2,000-metre-thick layer of salt.
Petrobras’ discovery placed Brazil’s oilfields among the world’s leading. It also lead to the creation of a new regulatory framework to manage the assets in question, including the production sharing system, the country’s Sovereign Social Fund, and the creation of Pré-Sal Petróleo S.A – the state-owned firm to manage the assets, according to the report.
“A total of 15 blocks were awarded to consortiums formed by 29 foreign firms, culminating in the collection of some US$ 12.882 billion in signing bonuses and about US$ 1.067 billion for the minimum exploratory programme, which includes the commitment to carry out activities such as seismic surveys and the drilling of exploratory wells,” the report read.
Brazil, to date, remains South America’s top oil producer with the pre-salt still churning out discoveries. Its neighbor south, Guyana – the newcomer is now playing catch up.
Guyana’s Stabroek Block deal with ExxonMobil and partners Hess, CNOOC in 2016 saw it receiving US$18 million – reportedly not as a signing bonus, but as support in its border controversy with Venezuela.
The country launched its first licensing round this year with new model Production Sharing Agreements (PSA) for both onshore and offshore blocks. A total of 14 blocks are up for auction, and if all receive bids, Guyana would earn no less than US$170 million in signing bonuses.
Successful bidders will have to pay a minimum of US$10 million for each of the 11 shallow water blocks in play. They would also have to pay a minimum of US$20 million for the three deepwater blocks up for grabs in the ultra-deep Area C.