Insight
Second take in Brazil’s Surplus DRO licensing: borderline economics may limit interest again
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
On 17 December 2021, Brazil will relicense the surplus volumes in Atapu and Sépia. The two PSCs failed to attract bids in 2019. The 2021 licensing round terms offer two clear improvements compared to the previous round: reduced uncertainty and reduced entry costs. Still, it is an opportunity for consortia or those with deep pockets – upfront costs will sum to US$10.6 billion to access 1.6 billion barrels of 2P oil reserves.
Table of contents
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Executive summary
- Areas on offer
- Improved licensing terms are not sufficient
- Capital gain tax takes a bite out of contractor's profit
Tables and charts
This report includes the following images and tables:
- Atapu returns sensitivity to Brent and profit share bids
- Sépia returns sensitivity to Brent and profit share bids
- Atapu cummulative cash flow sensitivity
- Sépia cummulative cash flow sensitivity
- Surplus Transfer of Rights bid parameters comparison: 2019 and 2021
What's included
This report contains:
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