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27.10.2017 14:36
Big Oil will bid for Brazil's deepwater pre-salt fields
Oil reserves are estimated to be more than 12 billion barrels

  • © Michael Elleray,

Brazil will auction eight blocks in its coveted deepwater oil region on Friday, a prospect that has lured top executives from the world’s biggest oil companies to Rio de Janeiro for the bidding round, Reuters reported.

The oil firms and Brazilian officials expect to see aggressive bidding for the more than 12 billion barrels of estimated oil reserves on offer.

The blocks are in a region with prolific oil production from fields known as pre-salt, where crude and gas sit beneath thousands of feet of salt under the deep Atlantic waters off eastern Brazilian shores.

President Michel Temer’s government has enacted reforms to make the energy sector more attractive to oil majors, and for the first time foreign energy firms will be offered the rights to operate the pre-salt fields. Previously, the government required state oil giant Petrobras to operate the fields. That made investment less attractive to oil majors, because they could not manage development as they saw fit.

“It’s going to be competitive,” Bernard Looney, chief executive for upstream at oil major BP, has told Reuters.

“It’s great for Brazil that the oil majors are here,” Wael Sawan, Executive Vice President for Shell’s deepwater division, has told Reuters, describing Brazil’s oil reserves as among the best in the world. Shell will participate in the auction and is confident it can pump from the pre-salt fields at below $40 a barrel, he said.

Exxon Mobil is also expected to bid, oil industry sources said.

Brazil has big hopes for the volume of oil the energy giants can pump from the blocks. Brazilian oil output could double to more than 5 million barrels per day (bpd) by 2027, up from just shy of 2.6 million bpd produced in August, Brazil oil and gas regulator ANP said.

TAGS: Brazil | auction | fields | crude | oil | deepwater | production | extraction | bidding | BP | Shell | Exxon 

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