Brazil round draws bids from Shell, independents

Shell was the sole international oil company to participate in the second phase of Brazil's open acreage licensing round, picking up a deepwater exploration block adjacent to its existing Campos basin acreage.

In Brazil's only upstream offer of 2020, Shell went unchallenged with a R12.1mn ($2.4mn) bid for the C-M-757 block, the biggest for an exploration asset in today's round.

The tally of total signing bonuses was around R57mn. Oil regulator ANP said the 18 awarded areas will generate estimated total investment of around R160mn.

Shell and partners Qatar's QPI and Chevron paid around R1.3bn for the C-M-713 and C-M-659 blocks— next to C-M-757—in the 16th concession model round in 2019, outbidding challengers Malaysian Petronas, the UK's BP and Norway's Equinor.

IOCs have been gravitating to Campos basin assets that are believed to have pre-salt potential but are governed by concession terms that the industry generally prefers to the production-sharing model that applies to most of Brazil's prolific pre-salt acreage.

"Today´s bid round further demonstrates our continued investment in Brazil, which is home to approximately 13pc of Shell's global oil and gas production," Shell Brasil president André Araujo said.

Shell is Brazil's second largest crude producer behind state-controlled Petrobras, which did not participate in the round.

Onshore, Brazilian independent Eneva pledged around R43mn for seven assets, including R25mn for the Jurura mature oil field in the gas-prone Solimoes basin in Amazonas state.

In a shift from its longstanding offshore focus, local independent Enauta partnered with Eneva in four onshore blocks in the Parana basin. Brazilian independents Imetame and EnP picked up five onshore blocks in the Espírito Santo basins. Two blocks in the Potiguar and Tucano basins were awarded to locals PetroReconcavo and Petroborn.

The open acreage round covers around 700 blocks not awarded in previous rounds and marginal oil fields. In 2019, a first phase attracted around R15mn in signing bonuses.

Brazil will launch its next concession model round in October 2021, when the ANP will offer 92 offshore blocks in the Campos, Santos, Pelotas and Potiguar basins.

By Nathan Walters