4/19/2017 Brazilteesuppresaltbonanza|Upstream

Prolic province: Brazil's second pre-salt

licensing round is due to be held in June this
year Photo: AP/SCANPIX

Brazil tees up pre-salt

bonanza
Energy Ministry reveals rst details of offerings in 2017, 2018 and 2019 that
could tap as much as 50 billion barrels
Gareth Chetwynd
Rio de Janeiro 12 Apr 2017 18:43 GMT Updated 12 Apr 2017 19:35 GMT

Brazil has unveiled an aggressive licensing calendar for 2017, 2018 and 2019, giving a tantalising
glimpse of what will be up for grabs in fresh offerings in the coveted pre-salt province.
The policy-making panel of Brazils Energy Ministry gave details of what will be included in the
next pre-salt rounds planned, including a string of giant prospects.
One oil company executive told Upstream that the areas Brazil will put on offer in pre-salt
rounds 3, 4 and 5 could represent a risked recoverable resource bordering on 50 billion barrels.
Brazilian authorities had already laid out plans to hold four licensing events in 2017 alone.
These start modestly, in May, with an exercise for mature elds in the onshore sector, and
include the countrys 14thoffering of exploration and production concessions.
Brazils second ever pre-salt round, scheduled for June, will offer areas bordering known
discoveries on pre-existing concession contracts.
This unitisation round will allow companies acquire production-sharing rights on areas likely
to harbour reservoirs that are contiguous with earlier discoveries.
In some cases, such as Shells Gato do Mato discovery, or Statoils Carcara asset, the existing
concession operators are seen as strong candidates to emerge with aggressive bids for the
unitisation areas.
These unitisation areas are Gato do Mato, Carcara North, Sapinhoa Surround and Tartaruga
Verde South-West.
What theBrazilian National Council for Energy Policy (CNPE) revealed for the rst time this
week was the areas that will be offered for production-sharing rights in the countrys third pre-
salt round, scheduled for November.
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The acreage on offer encircles prospects known as Pau Brasil, Peroba, Alto do Cabo Frio-Oeste
and Alto do Cabo-Frio Central, with potential to harbour billions of barrels of light oil and gas in
a province already famed for its highly productive wells.
Pau Brasil and Peroba are huge prospects, in the heart of the pre-salt fairway, and are likely to
attract enormous bonuses, an oil company source said.
The Alto do Cabo Frio areas also contain multiple structures, though there is more risk here,
due to the presence of siliclastic reservoirs. Together I think you are looking at between 30 and
40 billion barrels of risked resources, oil equivalent, another source commented.
The nearest local analogy for the Alto do Cabo Frio areas is offered by Repsols discoveries on
BM-C-33, now operated by Statoil.
Pau de Azucar is mainly gas, but other discoveries in the area were essentially liquids, so there
is plenty to ponder here, one of the sources noted.
The CNPE offered investors a longer-term view of what is to come compared to what has been
seen in Brazil before, deciding on the pre-salt areas to be put up for offer in 2018 and 2019.
The offers will include Santos basin prospects Saturno, Tres Marias and Uirapuru featuring
some of the biggest structures in the pre-salt plus several ultra-deepwater exploration blocks
in the Campos basin, namely C-M-537, C-M-655, C-M-657 and C-M-709.
In the second half of 2019, Brazil will hold its fth pre-salt round, including the Santos basin
prospects Aram, Lula South-East, Jupiter South, Jupiter South-West and Bumerangue.
There are some giant structures, but there is the obvious risk factor that you might hit a dud like
ExxonMobil did on BM-S-22, or nd too much carbon dioxide, as with the Jupiter discovery.
These risks are there, but there is always a real chance of nding something as big as Libra but
with less CO
2
, another source commented.
The four Campos basin areas are in an area with an unbroken salt canopy found to the east of
established post-salt stalwarts such as the Roncador and Marlim Sul elds, where CO
2
content is uniformly low.
This area is a pure exploration play and could offer a lower cost entry for potential bidders, one
source noted.
In all, the CNPE set out the agenda for 10 licensing events for 2017-19 and also approved lower
local content requirements at Cabinet level recently.
In addition to the 14th licensing round of E&P concessions, the CNPE also gave details of Brazils
15th licensing round for E&P concessions, due to take place in May 2018. This event will include
offshore blocks in the Foz do Amazonas sectors SFZA-AP1, AP2, AR1 and AR2, Ceara sectors SCE-
AP2 and AP3, Potiguar sectors SPOT-AP1, AP2 and AR2, Campos basin sector SC-AP4 and Santos
basin sector SS-AUP1, plus onshore blocks in the Parana, Parnaiba, Sergipe-Alagoas, Reconcavo,
Potiguar and Espirito Santo basins.
The 16th concessions round will include offshore areas in Camamu-Almada basin sectors SCAL-
AP1 and AP2, and Jacuipe basin sector SJA-AP, plus ultra-deepwater areas in Campos basin
sector SC-AP5 and Santos basin sector SS-AUP5, as well as onshore acreage in the Solimoes,
Parecis, Sergipe-Alagoas, Reconcavo, Potiguar and Espirito Santo basins.

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The CNPE also approved a sequence of smaller licensing events offering onshore elds in mature
areas of production, the rst of which is scheduled for May 2017, the second in May 2018 and a
third in the second half of 2019.
The wealth of per-salt acreage on offer surprised many insiders in the oil sector.
The smallest prospects on this list could lead to discoveries of 2 billion to 3 billion barrels of
recoverable hydrocarbons, oil equivalent. The biggest could be more than 10 billion barrels, said
one.
Another source suggested that the offering of so many pre-salt areas with such potential might
take some of the interest away from the unitisation round.
There is an obvious attraction for the companies holding assets on the adjacent concessions, but
taking on the unitisation issue with two different contracting systems is going to seem less
attractive to any others, considering you can get a clean slate elsewhere, another experienced oil
executive said.

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