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Brazil suspends upcoming licensing round on coronavirus outbreak
BRAZIL’S National Agency of Petroleum, Natural Gas and Biofuels (ANP) has approved the temporary suspension of the next round of oil and gas auctions, citing the coronavirus (COVID-19) crisis.
The agency had been planning to launch the 17th bidding round for exploration and production rights later this year. But it put the auctions on hold after the Brazilian Energy Ministry decided to suspend pre-auction pro- cedures, including the drafting of documents and contracts, owing to economic uncertainty stemming from the pandemic.
The regulator said in a press statement that Brazil’s National Energy Policy Council (CNPE) would reschedule the auction. It did not reveal when this might take place, though.
Brazil’s government had published a report in early March that was related to the 17th bid- ding round. The document evaluated the rules for exploration and production on the continen- tal platform beyond 200 nautical miles (370km).
In the upcoming licensing round, ANP is due to offer 128 blocks, including sites in Brazil’s rich pre-salt zone, to investors. The blocks lie within the Pará-Maranhão Maritime sedimentary basins and in the Potiguar, Campos, Santos and
Pelotas basins. They cover a total area of 64,100 square km.
Brazil’s pre-salt zone covers 149,000 square km. It is located offshore, between the southern states of Santa Catarina and Espírito Santo.
These areas, where oil and gas is found under layers of salt trapped beneath the ocean floor, are thought to contain some of the world’s most promising reserves. The oil and gas found there is considered to be of high commercial value and of very good quality.
Pre-salt fields have been drawing strong international interest for some time. Neverthe- less, the economic problems that have plagued Brazil over recent years have slowed develop- ment and deterred potential investors.
The country’s biggest-ever oil auction disap- pointed the Brazilian government last Novem- ber. It only drew bids from state-run Petrobras and two state Chinese firms.
Government officials told Reuters at the time that giving Petrobras preferential rights in some of Brazil’s offshore areas had been bad for com- petition. Meanwhile, the foreign companies that opted out of bidding cited high signing bonuses and complicated production-sharing deals as a deterrent to investment. ™
The bidding round would have included fields in the offshore pre-salt zone (Image: Petrobras)
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w w w . N E W S B A S E . c o m Week 14 09•April•2020