(Bloomberg) – Brazil sold five of the seven blocks offered in an oil auction on Wednesday to majors including Petrobras and Equinor ASA in a sign of renewed interest to explore in deep waters off the country’s southern coast despite low oil prices.
The auction presented surprises with Melbourne-based Karoon Energy Ltd winning the Esmeralda block by itself. Chinese oil majors CNOOC Ltd. and China Petroleum & Chemical Corp., or Sinopec, won a block without any local partners.
“The bid round was successful,” said Marcelo De Assis, a Rio de Janeiro-based independent oil consultant. “A Chinese operated block in the pre-salt is a first.”
The fields are located in the so-called pre-salt region that is so productive that the single biggest project produces more oil than all of Colombia. Discoveries made in the 2000s propelled Brazil to become Latin America’s biggest producer, but exploration was lackluster for more than a decade until bp Plc announced the Bumerangue discovery in the pre-salt this year.
State-controlled Petroleo Brasileiro SA, as it is formally known, has also announced a series of oil finds at the Aram block in the pre-salt.
“What’s most important is that the pre-salt has heated up again,” said Pedro Zalan a geologist and consultant who previously worked at Petrobras. “The pre-salt, where there was little interest recently, got a new lease on life.”
Still, European majors who operate in Brazil, Shell Plc, bp Plc and TotalEnergies SE didn’t present any bids.
The National Agency for Petroleum, Natural Gas and Biofuels, or ANP, received investment commitments even amid low prices that are prompting the oil companies to slash spending and downsize staff.
Top image: bp Plc
