Brazil eyes 2025 bid round featuring 14 pre-salt areas

The Brazilian National Petroleum Agency (ANP) has approved the bidding rules that will govern the country’s next pre-salt round, which will feature 14 areas in the Campos and Santos basins under the permanent offer initiative.

After a timid response in late 2023 in the second pre-salt round where only a single block out of five was awarded, the ANP started a wide revision of the auction guidelines and the areas on offer with the goal of organising the third cycle next year.

The next round will include a total of 14 areas — six in the Campos basin and eight in the Santos basin — to be offered as production sharing contracts.

The Campos basin areas are Citrino, Itaimbezinho, Jaspe, Larimar, Onix and Turmalina, while the Santos basin acreage encompasses Agata, Amazonita, Ametista, Esmeralda, Jade, Mogno, Safira Leste and Safira Oeste.

The regulator also implemented a few changes in the bidding rules in an effort to make the auction more attractive to both local and foreign players, as Brazil competes regionally with neighbours such as Guyana and Suriname for capital.

Among the main improvements are changes in local content requirements, exclusion of payment of the participation fee, a no longer obligation to drill an exploration well and instead replace it by the acquisition and reprocessing of 3D seismic activities, and inclusion of practices aimed at reducing greenhouse gas emissions.

Petrobras has already exercised preferential bidding rights for the Jaspe area, a large pre-salt structure estimated by the ANP to hold in place volumes of about 2.5 billion barrels of oil equivalent.

By exercising preferential bidding rights, Petrobras can now secure a 40% operating stake in Jaspe, which the government estimates it will be offered under a fixed signature bonus of 401 million reais ($72.2 million).

Nevertheless, the Brazilian state-controlled company will still have to submit a competitive proposal in the round, either alone or as part of a consortium, to be entitled to Jaspe.

Should a rival bidder offer the government a higher share of the profit oil than the Petrobras-led consortium, then the Brazilian company still retains the right — although not an obligation — to join the winning group and acquire the statutory 40% operating stake in the process.

Such a situation has happened three times in the past for the Uirapuru, Tres Marias and Agua Marinha areas, with Petrobras exercising its preferential rights every time.

The ANP submitted the new guidelines to the Brazilian Mines & Energy Ministry for approval, which later will undergo consultation and public hearings.

Created in 2017 as part of an extensive review of Brazil’s upstream sector, the permanent offer was designed to continue making acreage available on an ongoing basis to generate more interest in the country’s oil and gas.

In the first pre-salt round under the mechanism, the ANP raised about $172.5 million in signature bonuses with the awarding of the Agua Marinha, Bumerangue, North of Brava and Southwest of Sagitario areas.

However, the agency only auctioned off one area in the second round held last year. UK supermajor BP acquired the Tupinamba area for $1.4 million.