Insight

The pre-salt stays hot: four takeaways from Brazil`s Round 4

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Report summary

On 7 June 2018, Brazil held another successful pre-salt auction, offering four blocks in the core of the pre-salt with more than 14 billion bbl of unrisked in-place prospective resources. Three areas were awarded, all of which Petrobras will operate. With bids submitted by 11 of the 16 registered companies and US$818 million collected in signature bonuses, the outcome was another big success for Brazil and, for the Majors, a chance to significantly deepen pre-salt exposure. Despite the conclusion of four other licensing rounds in the span of less than a year, there is no sign that the Majors’ interest is waning in the pre-salt. ExxonMobil's, BP`s and Equinor’s further, heavy commitment to Brazil was the clearest indicator of that success. Shell and Petrogal reinforced their existing positions, while Chevron became the latest new entrant to the pre-salt polygon. With a fifth PSC round set for September 2018, we can once again expect strong competition for pre-salt acreage.

What's included

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  • Document

    _4 PSC round Insight.xls (1)

    XLS 158.50 KB

  • Document

    The pre-salt stays hot: four takeaways from Brazil`s Round 4

    PDF 564.36 KB

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Table of contents

  • Petrobras and the Majors again dominate
  • Petrobras holds the key to PSC acreage
    • Uirapuru drove most of the competition with four bids
    • Dois Irmaos was a good chance for Petrobras to win a block with a low bid
    • Tres Marias was Chevron's winning bet
    • Itaimbezinho received no bid
  • Optimism about pre-salt performance and strong competition pushed profit shares up again
  • Conclusion

Tables and charts

This report includes 4 images and tables including:

Images

  • PSC Round 4 blocks received bids from 11 of the 16 registered companies
  • Pre-salt polygon acreage: Equinor doubles its pre-salt acreage and BP holds on to second place
  • PSC Round 4 saw bids rivalling the highest winning bids in the previous two auctions
  • Full-cycle company IRR as a function of profit share bid rates at US$65/bbl Brent prices

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