Petrobras Interested in Two TOR Auction Areas

May 22, 2019

World Energy Reports LLC.
web AdobeStock_114251998.jpg

Petroleo Brasileiro said on Tuesday it is interested in exercising its preferential right to tender in two areas in an auction of excess oil from the so-called "transfer of rights" (TOR) area, according to a company filing.

The Brazilian state-run company said it was interested in the Buzios and Itapu areas, based on a 30% stake with a chance to increase the holding on the day of the auction, which is expected in October. The auction could result in a signing bonus of nearly 21 billion reais ($5.20 billion), it said.

Petrobras, as the company is known, said that it could participate in auctions in two other areas, but on the same terms available to other potential bidders.

The news of Petrobras' desire to enter the auction brings clarity to a long-awaited auction that is likely to lure some of the world's top energy firms and which the government says could generate some 100 billion reais ($26 billion).

Petrobras has settled a long-running dispute about the TOR area, a roughly 2,800-square-km (1,080-square-mile) zone off the coast of southeastern Brazil where billions of barrels of oil are trapped beneath a layer of salt under the ocean floor.

Under the terms of the settlement, Brazil's government will pay Petrobras $9.058 billion, paving the way for the auction, which grants access to prized assets in an oil-producing zone known as the pre-salt. The area has emerged as one of the world's most promising conventional oil plays.

Petrobras and the government are still discussing how the auction winners will potentially partner with the state oil company, which is already producing at Buzios and has the right of first refusal to remain operator at the four fields.

Regardless of the final arrangement, winners of the auction will be required to compensate Petrobras for the infrastructure and exploratory work in which the company has already invested.

Among the companies with exploration and production assets adjacent or relatively close to the TOR area, offering potential cost savings, are Total SA, Royal Dutch Shell PLC , and China's CNOOC Ltd and CNPC.

($1 = 4.0390 reais)

(Reporting by Roberto Samora, Gabriel Stargardter Editing by Daniel Flynn and Grant McCool)

Floating Production Week delivers unrivaled overview, insight and analysis to the Offshore Floating Production Systems and Technology market

Floating Production Systems Report And Online Database

  • Monthly reports -- Our monthly reports provide a detailed snapshot of the business sector as of the middle of each month. More than 80 pages of data and industry analysis each month. Excel spreadsheets with each report enable subscribers to tailor the data presentation to their needs. In October of each year we provide a detailed five year forecast of production floater orders. In March of each year we fine tune the forecast and make revisions as needed.
  • Online database -- The online database is updated every day – with information direct from primary sources. In the database are details for 240 planned projects, 370 installations in service, 70+ floaters on order and 20+ floaters available. The database is fully searchable. Customized charts and spreadsheets can be directly produced from the database.
  • Customer support -- We are available to assist with technical questions about information in the database and reports -- and assist with any questions about using the database search tools.

Here's what you get!

Request a Free Sample Report