Insight
Brazil’s Transfer of Rights surplus DRO round results: a party of one
Report summary
As we predicted in our last Insight on the Transfer of Rights process, bids came in at the minimum government profit share. With no offers from IOCs, Petrobras took the lead. Still, Atapu and Sépia failed to attract offers. Búzios and Itapu offer much better returns – with no surprise Petrobras took a large piece of each of them. CNOOC and CNPC joined Petrobras in Búzios. The Chinese NOCs need to refresh their long-term opportunity sets, and the Transfer of Rights surplus round offered materiality and high margins. Despite the short-term reduction of the capacity to pay debt, Petrobras will benefit from its advantages on the auction - the massive co-participation payment has a positive effect for the NOC. The IOCs baulked at the terms, the uncertainty on payments to Petrobras was too significant.
Table of contents
- Executive summary
- Lone bids for Búzios and Itapu, no offers for Atapu and Sépia
- Petrobras leads the pack
- Chinese NOCs bid for high-margin long-life assets
- Why have the IOCs stayed away?
Tables and charts
This report includes 5 images and tables including:
- IRR (%) sensitivity to Brent for the two surplus PSCs
- Transfer of Rights surplus round results
- Benchmark: WM upstream capex spend intensity
- Petrobras Q4 2019 liquidity
- Top 10 companies in Brazil by recoverable resources
What's included
This report contains:
