Brazil’s latest licensing round sets new record

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Speaking after Brazil’s Licensing Round 16 on Thursday, Juliana Miguez, from Wood Mackenzie’s Latin America upstream, said the round has set a record – the BRL 8.9 billion (US$2.2 billion) – in signature bonuses, the highest yet for a Brazilian round.

Of the 36 blocks on offer, 12 were awarded, all in the prolific offshore Campos and Santos basins.

Malaysia’s Petronas, Qatar’s QPI, Spanish producer Repsol and the US’ Chevron all bid high. QPI and Petronas were the biggest spenders of the day, as well as Petrobras. The NOC won only one block with BP and was outbid in the hotspot block C-M-541, evidencing the success of the market opening.

“Only Campos and Santos basin blocks were awarded, with frontier acreage failing to attract interest,” Miguez said.

Petronas marked its Brazilian debut in style, walking away with four blocks, two of which it will operate. It has a 20% stake in the Total-operated (40%) consortium which won Block C-M-541, in the Campos. Together with partner QPI, the trio offered the highest bonus ever paid in a concession round (US$ 983 million), outbidding a Petrobras-Equinor consortium by committing to a higher exploration programme.

“Petronas also won Block C-M-661, fighting off the BP-Equinor and Shell-QPI-Chevron consortiums for the Campos acreage,” Miguez pointed out.

Of the Campos blocks awarded, Petrobras and BP Energy won Block C-M-477; Shell, QPI and Chevron were awarded Block C-M-659 and C-M-713; ExxonMobil took Block C-M-479; Petronas won blocks C-M-661 and C-M-715; Repsol takes Block C-M-795; Repsol and Chevron won Block C-M-825; and a consortium of Repsol, Chevron and Wintershall won Block C-M-845. Only two blocks in Santos basin were awarded in the round.

Ms Miguez added: “The Majors and Petrobras look to be keeping their powder dry, preferring to wait for the two upcoming rounds – the long-awaited transfer of Rights Surplus round on 6 November, and the PSC round on 7 November.”