Total and Shell among winners in Brazil oil auction

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Several oil majors on Friday have promised to investigate the outlook for deep-sea oil off the coast of Brazil, following an auction that is widely seen as a test of the industry’s desire for crude oil in the face of a green energy transition.

Total, Petronas, Qatar Oil Brazilian Petrobras At a winning bid to develop a sepia field in the South Atlantic, Total and Shell will work with Petrobras to explore Attape’s outlook.

The two outlooks form part of a group of four “presalt” fields off the coast of Brazil. These fields are believed to contain a total of 15 billion barrels of oil. The high quality oil is named after the thick salt rind on top of the crude oil.

With the global demand for clean energy, oil companies are increasingly hesitant about traditional exploration. By joining a consortium in areas where reserves are established and production is relatively clean, oil groups can limit their impact on the environment and reputation and support supplies, according to analysts.

Petrobras has already pumped oil in the region, reducing the exploration risk of oil majors.

“Oil has already been discovered in these areas, so operational risk is low. [carbon dioxide] This justifies the interests of the enterprise even at the beginning of the energy shift, as emissions in the presalt sector are relatively low compared to other sectors, “said Marcelo Dea, Head of Latin American Upstream Research at Wood Mackenzie. Sith says.

The auction in Rio de Janeiro was foretold to be successful by the Brazilian government, which charged a total of nearly $ 2 billion in fees from oil majors. The Sepia Consortium provided 37.4% of “Profit Oil” (amount that needs to be shared with the government) and the Attap Group provided 31.7%.

An additional $ 35 billion will be invested by the company in the development of oil and gas production during the 35-year contract period. According to Brazil’s Minister of Mines and Energy Bento Albuquerque, the country’s production is expected to increase by 12% over the next five years.

The success of the auction is in contrast to the government’s last oil auction in 2019, where high prices and complex sharing rules surprised key global players. At that time, Brasília was asking for a fee of over $ 9 billion.

” [$2bn] Important with bonuses. It strengthens Brazil’s cash flow during times of financial fragility. Secondly, [$35bn] Increased investment commitment, this is even better. This is exactly what economists dream of for the future of the country. It’s a wave of investment that brings employment, income and innovation, “said Paulo Guedes, Brazilian Finance Minister.

“I will consider [this auction] More importantly, it has significantly increased the number of participants. Prosperity comes from intensifying competition. “

Henrique Jaeger, a researcher at the Institute for Oil, Natural Gas and Biofuel Strategy, said the reduction in prices paid by oil majors to the government on Friday reflects the increased risk of oil investment.

“Investing in this industry is costly in the face of climate change because the industry has a significant impact on the environment. Therefore, companies tend to pay more attention to their investment. How is this for auctions? Affects? Today, they want to share the risk with the states that offer the field with less payment. “

Total and Shell among winners in Brazil oil auction Source link Total and Shell among winners in Brazil oil auction

The post Total and Shell among winners in Brazil oil auction appeared first on California News Times.

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