Oil & Gas are among the most important resources worldwide, and Brazil has been investing a lot of time and money in this industry since the recent Pre-Salt discoveries.
After six years of waiting, a new oil bid took place two weeks ago in Brazil, and two more are to come before the end of the year. The next area to be bid is Libra Field, the primary Pre-Salt area discovered in the country. In this upcoming round, only that field will be offered, and ruled by a different type of contract.
In order to evaluate the well, ANP – the national agency that regulates the O&G industry – drilled what is the largest oil field in the country. In an interview to the TV channel GloboNews, João Carlos de Luca, President of IBP (Brazilian Institute of Petroleum, Gas and Biofuels), said it is a very interesting opportunity for the Brazilian government, since Libra corresponds to a widely big area that has already been evaluated by ANP, meaning more bonus can be charged by IBP. Libra’s depth is approximately 5.000m.
Pre-Salt bidding round presents a new contract system
Although Brazil has issued concession contracts since the first oil bid, Libra will be offered under a production sharing agreement. In the new system, the exclusive operator is already defined: Petrobras. The state-owned company shall participate with at least 30%, and other companies can dispute the remaining 70%. It means the government is more involved, nevertheless it may work well.
Mr. de Luca understands that the image of a single operator does not reflect the interest of the industry, since several companies have invested much in human resources, research and technology development.
The terms of the contract are not yet defined, and a public audience is going to take place within the next months. Mr. de Luca, however, believes that the current priorities shall be both, securing Brazilian interests through royalties and participation, and maintaining attractiveness for other international companies.