Most of Brazil's basins up for bid

Brazil has disclosed plans to open the vast majority of the country's sedimentary basins to public bidding for exploration and development projects.

The tender encompasses as much as 92.9% of Brazilian basins, to be removed from the control of state petroleum company and former sector monopolist Petroleo Brasileiro SA, according to David Zylbersztajn, general director of Brazil's National Petroleum Agency (ANP).

This area includes 48.1% of the Brazilian oil sector's "crown jewel," the Campos basin, which provides about 70% of the country's total crude oil output of about 1 million b/d. The offshore Campos basin in recent years has yielded a string of giant fields in progressively deeper waters-and with that string a tally of new worldwide deepwater drilling, production, and pipelaying records every year.

The choicest Campos basin fields, such as the deepwater Marlim and Albacora complexes-well along in development-and 1996 ultradeepwater discovery Roncador-currently under initial development-will remain with Petrobras as operator. In some instances in the Campos basin, Petrobras will have a choice of operating alone or in association with other companies.

Petrobras stance

The final carve-up of Brazil's prospective hydrocarbon areas isn't far from what the state company had sought.

Petrobras had requested the control of 10.5% of the country's sedimentary basins, but will only control 7.1% of the total 6.4 million sq km. The area to be kept by Petrobras totals around 458,000 sq km.

The ANP director said Petrobras had proved its capability to invest the required total of $9.6 billion over the next 3 years, of which $7.2 billion will come from its own resources and a further $2.4 billion from project finance. Under the project finance scheme, Petrobras will put up future oil production in proven sites as collateral for loans from financial institutions.

Petrobras Pres. Joel Mendes Renno said that ANP's decision does not affect the company's production target of 1.2 million b/d of crude by 1999 and 1.5 million b/d by 2000.

"Most large international companies have shown keen interest in participating in this new phase of Brazil's petroleum history," Renno told OGJ. He named interested parties for joint ventures or partnerships as including British Petroleum plc, Royal Dutch/ Shell, YPF, Total, Conoco Inc., Exxon Corp., and Mobil Corp., among others.

ANP was created by a petroleum deregulation law enacted by Brazil's congress in August 1997, which effectively ended Petrobras' 43-year monopoly in petroleum exploration, production, refining, marketing, exports, and imports. (OGJ, Apr. 13, 1998, p. 25).