Petrobras' Upstream Assets to be Auctioned as Government Reassesses Priorities

Strategic Insights -

Petroleo Brasileiro (Petrobras) is awaiting a decision on which of its upstream assets will be allowed to be retained, and which will be put up for bidding, following the release of a report by the National Petroleum Agency (ANP). After the oil reform law of August 1997 removed Petrobras' monopoly status, the company requested permission to retain about 400 areas, including all of Brazil's producing fields and most of the acreage with commercial discoveries. However, the ANP demanded proof of Petrobras' financial resources to explore and develop all the areas it was requesting. Petrobras has begun discussions with foreign multinationals to secure funding for 125 areas, and the government is now considering compromise alternatives that would allow some partner financing.

Key Takeaways:

  • Petrobras requested permission to retain about 400 areas, including all of Brazil's producing fields and most of the acreage with commercial discoveries.
  • The National Petroleum Agency (ANP) demanded proof of Petrobras' financial resources to explore and develop all the areas it was requesting.
  • Petrobras has begun discussions with foreign multinationals to secure funding for 125 areas.
  • The government is considering compromise alternatives that would allow some partner financing for Petrobras' claims.
  • The ANP plans to keep 20% of Petrobras' requests and bid them out, collecting signature bonuses in the process.
  • The offshore Campos Basin's Roncador field is considered vulnerable in the ANP handout process.

Statistics:

  • 400: The number of areas Petrobras requested permission to retain.
  • 125: The number of areas Petrobras plans to offer to foreign multinationals for funding.
  • 44: The number of areas Petrobras has requested for exploration.
  • 23: The number of areas Petrobras has requested for development.
  • 58: The number of areas Petrobras has requested for production sharing.
  • 31%: The percentage of Petrobras shares sold by the government in late 1999.
  • 20%: The percentage of Petrobras requests the ANP plans to keep and bid out.

Sources:

  • "Petrobras Seeks to Keep 400 Areas", The Wall Street Journal, undated.
  • "ANP to Keep 20% of Petrobras Requests, Bid Them Out", Market Intelligence, undated.
  • "Robert Fleming Sees Petrobras as a Buy, Expects ANP to Keep Majority of Requests", The Financial Times, undated.
  • "Paribas Sees Petrobras in a Strong Position to Keep Significant Portion of Campos Basin Field", The Deal Pipeline, undated.