STORY-TRÅD·politik

Brazil’s largest pre-salt auction awards 7 of 13 blocks

Brazil’s largest auction of oil and gas exploration and production blocks in the so-called Pre-Salt Polygon ended with seven of the 13 blocks awarded. The 4th Cycle of the Permanent Production-Sharing Offer was held on Wednesday morning (Oct. 7). The auction, organized by Brazil’s national oil authority ANP at its headquarters in downtown Rio, brought in BRL 530 million in signing bonuses for the government. Had all blocks been awarded, the total would have reached BRL 1.24 billion. Notícias relacionadas:Auction to offer 23 pre-salt exploration blocks in Brazil.This was the pre-salt auction with the most blocks awarded. The previous one (3rd Cycle, in 2025) had five areas up for bid. With this result, the exploration area under the production-sharing regime expands by 58 percent to 39,200 km² – some 90 percent of the territory of the state of Rio de Janeiro (43,800 km²). There were 19 qualified companies, but only six submitted bids, four of which were foreign. There was no competition – in other words, for all seven blocks awarded, there was only one bidder. The biggest winners were the Brazilian companies Petrobras and Prio (formerly PetroRio), each with two blocks. Norway’s Equinor also secured two blocks, one of them in a consortium with Portugal’s Galp. To explore the blocks – all located in the Santos and Campos basins off the southeastern coast – the oil companies committed to making minimum investments totaling approximately BRL 778.4 million. Production-sharing model Like the signature bonuses, the minimum investment requirements are set forth in the call for bids issued by the ANP, which is affiliated with the Ministry of Mines and Energy. In addition to approval from the Ministry of Mines and Energy, the exploration areas put up for auction also received the green light from the Ministry of the Environment and Climate Change. In a production-sharing model auction, the winning company is the one that offers the federal government the largest share of surplus oil – the production remaining after costs are paid. The agreement functions as a form of profit-sharing with the Brazilian government. The call for bids sets a minimum price for each block. The bidding process is confidential regarding the submission of offers – that is, companies do not know in advance what percentage of surplus oil their competitors are offering or in which areas they will bid. As a result, even though there was no bidding competition for the blocks, all were awarded at a premium ranging from eight to nearly 495 percent. The average premium was 108.38 percent. Five areas in the Campos Basin (Magnetite, Tourmaline, Hematite, Larimar, and Azurite) and eight in the Santos Basin (Jade, Aragonite, Cruzeiro do Sul, Opal, Garnet, Cerussite, Ruby, and Rhodochrosite) were up for bid. Here is the list of winners for each block awarded: Magnetite Winner: Prio Excess oil percentage: 32.80% Premium: 132.79% Hematite Winner: Prio Excess oil: 7.18% Premium: 315.03% Azurite Winner: Petrobras Excess oil: 30% Premium: 139.81% Jade Winners: Chinese companies CNOOC (70% of the consortium) and Sinopec (30%). Excess oil: 18.20% Premium: 65.76% Cruzeiro do Sul Winner: Petrobras Excess oil: 15.27% Premium: 8.07% Rubi Winner: Norway’s Equinor Excess oil: 25.02% Premium: 91.72% Rodocrosita Winners: Norway’s Equinor (70% of the consortium) and Portugal’s Galp (30%) Excess oil: 15.52% Premium: 494.64% The winning companies must now follow the remaining steps outlined in the schedule – such as submitting documents and paying the signing bonus – so that the contracts can then be signed, which is scheduled to take place on February 26, 2027. The Turmalina, Larimar, Aragonita, Opala, Granada, and Cerussita blocks were not awarded. They will be carried over to the next bidding round. Pre-salt The pre-salt layer lies beneath a thick layer of salt, which can reach depths of up to 7,000 meters. It is currently Brazil’s main production area. In September, for example, it accounted for 82.6 percent of the country’s oil and gas production. As ANP Director-General Artur Watt Neto stated before the auction began, the pre-salt remains “one of the most significant exploration frontiers in the world.” “We have to continue working to offer blocks adjacent to the identified opportunities,” he said, referring to the pre-salt as “a great source of wealth for the country.” New areas At the start of the production-sharing auction, Renato Dutra, the Ministry of Mines and Energy’s National Secretary for Oil, Natural Gas, and Biofuels, stated that oil is a factor that gives Brazil an advantage on the international stage. He added that the ministry is working together with the Ministry of the Environment to increase the supply of exploration blocks to “preserve national energy security.” In the coming months, he noted, the government is expected to make more than 50 exploration blocks available in the Pelotas basin, on the country’s southern coast. The area is also viewed as promising because it has geological characteristics similar to those of the African coast, where oil is produced. “That’s a possible step forward,” he said. He reaffirmed the government’s interest in what is known as “unconventional” exploration – fracking. This technique involves injecting a mixture of water, sand, and chemical additives under high pressure to create fractures in rock formations and enable the extraction of fossil fuels. The proposal faces opposition from environmentalists and is the subject of a case before the Superior Court of Justice.