Peter Howard Wertheim
OGJ Correspondent
RIO DE JANEIRO, Sept. 28 -- Some international oil company executives have voiced concerns about Brazil's National Petroleum Agency (ANP) excluding the Campos basin and parts of the Santos basin from the country's Nov. 28 licensing round.
Excluding these areas from the 8th licensing round makes it "less attractive," Alvaro Teixeira, executive secretary of the Brazilian Petroleum & Gas Institute told OGJ.
Most of the field development activity undertaken by international firms is concentrated in the Campos basin, which produces 80% of Brazil's output of 1.8 million b/d of oil.
"Is the exclusion of these basins a sign that there will be changes concerning policies for future licensing rounds?" Teixeira posed. "Brazil's Mines and Energy Minister Silas Rondeau reaffirmed that the rounds will continue as normal and that the 9th Round will probably be announced right after the 8th round. We will see," he said.
The IBP executive said: "In the short term, there will be a reduction in the rhythm of annual investments in exploration. In the medium and long terms, there will be a postponement in investments to develop potential commercial discoveries of exploration work that was also postponed. The end result will be a reduction in the pace and or maintenance of the present rate of oil production in the next 6-7 years."
IBP is a 50-year-old, nonprofit, private organization with 220 associates including most of the multinationals operating in Brazil.
ANP placed 284 blocks on offer in the upcoming 8th Round (OGJ Online, Sept. 12, 2006). The blocks being offered are in seven sedimentary basins and are considerably less in number than ANP's previous announcement of 1,153 blocks in 18 basins.
ANP justified excluding the Campos basin by saying, "A wide selection of acreage is to be put up for auction, including areas considered to have great potential for both oil and gas, new frontier blocks, and blocks in mature areas."
ANP considers 35 offshore areas as high potential blocks, 153 offshore blocks as new frontier basins, 47 onshore blocks as new frontier basins (with little geological data), and 49 blocks in onshore mature basins.