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Brazil seeks long-awaited licensing reboot with three 2017 rounds

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09 June 2017

Brazil seeks long-awaited licensing reboot with three 2017 rounds

Report summary

Brazil is betting that prospectivity will outweigh regulatory uncertainty and political turmoil as it schedules three rounds for the end of 2017. The offer includes frontier and emerging under-explored acreage not accessible since 2006. The highlight will be large pre-salt DROs and exploration opportunities. The auctions face stiff global competition from 25 bid rounds underway. Explorers are looking for low-cost acreage, with an increased emphasis on favourable fiscal regimes. Will the pre-salt’s prospectivity offset the large signature bonuses required? Significant regulatory improvements to make Brazil more competitive have been implemented. But a series of concerns, including environmental licensing, vague unitisation regulations, and the fate of REPETRO threaten to undercut competition, even for the best acreage. In this first in a series of two Insights on Brazil’s rounds, we weigh these risks and opportunities to understand if Brazil can reboot exploration in 2017.

Table of contents

  • Government is betting that attractive acreage will outweigh regulatory uncertainty and ongoing political turmoil
  • Acreage on offer
    • Recent Brazilian bid rounds
      • Round 11 (2013)
      • Round 13 (2015)
    • Exploration activity has come to a standstill since 2014
      • But a resurgence in exploration budgets could lead to high-impact wells opening up new plays in frontier basins
    • Stiff competition for exploration capital
    • 14th round
    • PSC rounds
      • 2nd PSC Round
        • Unitisation challenges still not addressed
      • 3rd PSC Round
    • Reduced and simplified local content rules remove a serious concern
    • Petrobras preferential operating rights
    • Frontier acreage and onshore areas expected to draw less attention from IOCs
  • Lingering above-ground risks remain a significant hurdle
  • Bidding will show how far prospectivity outweighs uncertainty
  • Related reports

Tables and charts

This report includes 14 images and tables including:

  • Santos and Campos basin acreage
  • North Atlantic Margin acreage
  • South Atlantic Margin acreage
  • Breakdown of acreage on offer by basin and round
  • Offshore acreage on offer
  • Onshore acreage on offer
  • Exploration drilling in Brazil's South East Atlantic Margin
  • Exploration wells in Santos and Campos basins
  • Volumes discovered in Santos and Campos basins
  • Ongoing and recently completed licensing rounds
  • Brazil seeks long-awaited licensing reboot with three 2017 rounds: Image 10
  • Pre-salt rounds key contract terms
  • Key wells to watch in the Brazilian Equatorial Margin
  • Undiscovered volume potential in Brazil's South East Atlantic Margin

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