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Brazil's ANP puts 110 billion barrels on block

Brazilian regulator reveals details of sixth pre-salt auction and 16th licensing round

The Brazilian National Petroleum Agency (ANP) has unveiled extra details about the blocks to be offered in the forthcoming sixth pre-salt auction and 16th licensing round, with the acreage pegged as holding unrisked volumes of more than 110 billion barrels of oil in place.

The ANP aims to raise 11.6 billion reais ($3 billion) in signature bonuses if all blocks in the 16th round, scheduled for 10 October, and the sixth pre-salt round, earmarked for 7 November, are sold for the minimum price.

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“The two rounds are incredible opportunities. Our goal is to have multiple companies operating in different plays,” said ANP director Felipe Kury.

The Aram area is expected to attract a lot of attention and to be the star of the pre-salt round, as the regulator estimates the structure alone could be as big as the giant Buzios and Lula fields, with unrisked volumes of 29 billion barrels of oil in place.

The Aram prospect is estimated to cover about 1350 square kilometres — bigger than Rio de Janeiro state — with pre-salt deposits nestled at depths of more than 6000 metres.

Aram is located immediately to the west of the Equinor-operated Carcara discovery and carries a fixed signature bonus of 5.05 billion reais, the largest to date for any production sharing contract offered in the pre-salt play, excluding the Libra area that was acquired for 15 billion reais by a Petrobras-led consortium in late 2013.

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Besides Aram, the sixth pre-salt round will also auction four additional areas, which all have extraordinary potential, according to the ANP.

The Cruzeiro do Sul area is squeezed between Lula and Block BM-S-24, home of the Jupiter find, suggesting a unitisation agreement will likely be required. It will be offered for 1.15 billion reais.

Cruzeiro do Sul harbours the Gaia, Aurora, Minerva, Marte and Venus accumulations. Combined with three other prospects that spill over to Lula and BM-S-24, the area holds unrisked volumes of 4.65 billion barrels of oil in place.

In the southernmost portion of the Santos basin lies Bumerangue, a new frontier area with a higher geological risk due to the lack of significant pre-salt finds nearby.

Located in water depths of about 2000 metres, it will be auctioned for 550 million reais. However, the ANP highlighted mapped prospects including Bumerangue, Canguru, Coala, Dingo and Tasmania that it estimates can together hold unrisked volumes of 3.63 billion barrels of oil in place.

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The last two areas on offer, North of Brava and Southwest of Sagitario, are unitisable with their respective discoveries in the Marlim-Voador field and Block BM-S-50, both of which are operated by state-controlled company Petrobras.

A large section of the Brava find made inside the Marlim ring-fence extends to North of Brava, but the acreage on offer also has other promising leads such as Jambu and Cacau.

As for Southwest of Sagitario, the ANP estimates about a third of the maiden find in BM-S-50 is located in the adjacent area, potentially holding unrisked volumes of 1.54 billion barrels of oil in place.

The government is asking for signature bonuses of 500 million reais and 600 million reais for Southwest of Sagitario and North of Brava, respectively.

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Petrobras has already exercised preferential bidding rights for Aram, North of Brava and Southwest of Sagitario, meaning it will be entitled to minimum 30% operating stakes in these areas.

If a rival consortium outbids Petrobras' offer on the day of the round, the state-controlled oil giant will have a short period to decide whether to take up the operated interest in that consortium.

Petrobras did just that in the fourth pre-salt round in 2018, when it joined winning bids by rival consortia in the Uirapuru and Tres Marias pre-salt areas.

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