6/27/2014
BRASILIA – Brazil’s government has granted state-controlled energy giant Petrobras the right to develop surplus hydrocarbons at four fields located in the pre-salt region, a massive, recently discovered oil frontier located far below the floor of the Atlantic Ocean.
Petrobras already had the right to produce up to 5 billion barrels of oil equivalent from the Buzios, Entorno de Iara, Florim and Nordeste de Tupi fields thanks to a 2010 transfer-of-rights deal in which the government took a bigger stake in Brazil’s largest company.
It now has been authorized to develop additional oil found at those fields in exchange for making advance payments to the government totaling billions of reais.
The National Council for Energy Policy on Tuesday decided to directly contract Petrobras as the government’s partner in developing that surplus oil, the Rio de Janeiro-based company said.
Under the 35-year production-sharing agreement, Petrobras is authorized to develop that extra oil – which Brazil’s National Petroleum Agency estimates at between 9.8 billion and 15.2 billion boe – at those government-owned fields, it added.
In exchange for those rights, Petrobras must pay the government a 2-billion-reais ($898-million) signing bonus; in anticipation of part of the profit oil, the company also must pay the government 2 billion reais in 2015, 3 billion reais in 2016 and 4 billion reais in both 2017 and 2018.
The four fields included in the production-sharing arrangement are all located in the pre-salt region, so-named because its reserves are located under water, rocks and a shifting layer of salt at depths of up to 7,000 meters (22,950 feet) below the surface of the Atlantic.
That region, the main focus of Petrobras’ investment plan, could vastly increase Brazil’s proved reserves and turn the country into a major crude exporter.
BRASILIA – Brazil’s government has granted state-controlled energy giant Petrobras the right to develop surplus hydrocarbons at four fields located in the pre-salt region, a massive, recently discovered oil frontier located far below the floor of the Atlantic Ocean.Petrobras already had the right to produce up to 5 billion barrels of oil equivalent from the Buzios, Entorno de Iara, Florim and Nordeste de Tupi fields thanks to a 2010 transfer-of-rights deal in which the government took a bigger stake in Brazil’s largest company.
It now has been authorized to develop additional oil found at those fields in exchange for making advance payments to the government totaling billions of reais.
The National Council for Energy Policy on Tuesday decided to directly contract Petrobras as the government’s partner in developing that surplus oil, the Rio de Janeiro-based company said.
Under the 35-year production-sharing agreement, Petrobras is authorized to develop that extra oil – which Brazil’s National Petroleum Agency estimates at between 9.8 billion and 15.2 billion boe – at those government-owned fields, it added.
In exchange for those rights, Petrobras must pay the government a 2-billion-reais ($898-million) signing bonus; in anticipation of part of the profit oil, the company also must pay the government 2 billion reais in 2015, 3 billion reais in 2016 and 4 billion reais in both 2017 and 2018.
The four fields included in the production-sharing arrangement are all located in the pre-salt region, so-named because its reserves are located under water, rocks and a shifting layer of salt at depths of up to 7,000 meters (22,950 feet) below the surface of the Atlantic.
That region, the main focus of Petrobras’ investment plan, could vastly increase Brazil’s proved reserves and turn the country into a major crude exporter.
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