New Exploration Opportunities in Brazil
Brazil is the world's 10th largest producer of oil, with most of its production coming from the prodigious Santos and Campos basins. But there is a lot more to Brazil and plenty of other exploration targets with considerable potential for those who prefer to stay clear of the presalt fray.
In 2018, Brazil’s licensing authority the Agencia Nacional do Petroleo, Gas Natural e Biocombustiveis (ANP) announced plans to offer more than a million square kilometers of licensing opportunities through multi-phase licensing rounds over a three-year period.
Multi-Phase Licensing Carousel
- Production sharing rounds for the presalt polygon
- Open acreage process increases the tradability of blocks on the margin and shelf
- Annual concession rounds open new exploration areas on the shelf
Brazil biddings rounds are arranged by the ANP, guided and authorized by the National Energy Policy Council (CNPE). Bidding is a public event held in the presence of authorities, companies, and the press. The bidders put their offers, including the signature bonus, in a sealed envelope into a transparent urn.
Like the urn, the process is transparent. The winner is announced immediately, engendering excitement along with significant revenue. Exploration licensing generated USD 7 Billion in signature bonuses between 2016 and 2018 alone, and is a vital generator of income for the Brazilian economy.
Production Sharing Rounds
There is a twice-yearly system for blocks in the presalt polygon and other strategic areas. These basins hold the majority of Brazil’s oil reserves but they are complex, requiring deep pockets and considerable expertise to produce them. Since 2016, major oil companies are invited to take a larger share in the Santos and Campos presalt areas, although Petrobras retains preferential bidding rights that guarantee it an operating stake of at least 30%.
Awards in PS Round 5, covering Saturno, Tita, Pau-Brazil and Sudoeste de Tartaruga Verde, were made in October 2018. The blocks were snapped up by consortia including BP, Chevron, Shell, Exxon, CNNOC, and Qatar.
The PS Round 6 is to be held in 2019 and will target Aram, Lula (southwest and south), Jupiter, and Burmerangue.
Open Acreage Process
In November 2018, after a long period of discussions, Brazil will launch a new rolling program for release of open acreage concessions through a permanent block offering. This should increase participation by smaller and medium-sized players.
Over 1800 offshore blocks, covering around 700 000 sq. km of offshore acreage will be released for licensing over the next 12 months. The permanent open acreage process will offer blocks covered by previous licensing rounds that were awarded and have been relinquished, and areas that were offered as part of previous rounds but not awarded.
Many of these blocks cover play fairways that have been neglected during the race for the presalt blocks. They allow intermediate size companies to explore in Brazil for prospects left behind by the majors. This sets the stage for a return to exploration for basin floor fans and associated reservoirs that drove some of Brazil’s early success in the deep water.
Concession Bidding Rounds
Regular annual license opportunities for new exploration areas continue alongside the presalt and permanent offers. These too have been revamped to encourage industry interest. Details of new block availability are published with a three-year horizon by the ANP.
- The 15th Round (2018) focuses on Ceara, Potiguar, and Sergipe-Alagoas in the Brazilian Equatorial Margin, which has potential for oil discoveries in Upper Cretaceous Turbidite reservoirs. It also included parts of the Santos Campos Basin outside the presalt polygon.
- The 16th Round (2019) will focus on producing and prospective exploration areas in the East Margin: Jacuipe, Camamu-Almada. Ultra-deep Campos and Santos acreage outside the pre-salt polygon will also be offered.
- The 17th Round (rescheduled to 2021) shifts focus back to the Equatorial Margin, with blocks from the Pará-Maranhão Offshore Basins, Pelotas, and Potiguar; again with ultra-deep waters outside the presalt Campos and Santos basins.
- For the 18th Round (expected 2022) the Ceará Basin, Pelotas, and ultra-deep waters outside the presalt polygon of the Espírito Santo Basin will be the targets.
Finally, a so-called Transfer of Rights process has promised to release additional reserves in blocks adjacent to areas operated by Petrobras and is expected to commence in 2019.
Making the Most of the Opportunities
With so much opportunity on offer, how should you assess the best place to invest? The answer will depend on your priorities and preferred risk profile, and the PGS data library is an excellent place to start. PGS has been a driver of technological advances in subsurface imaging offshore Brazil for over 20 years and introduced first 3D seismic, then broadband technology to this part of the world. We have carried out a lot of exciting acquisition and imaging projects over the years.
You can see the results in our data library which holds over 127 000 sq. km 3D, all acquired by PGS, including ca. 37 000 sq. km GeoStreamer data. In addition, we offer 70 000 sq. km of reprocessed 3D data, including the Santos Vision broadband reprocessing, and the 144 000 sq. km MegaSurvey.
- Presalt Basins: In the Santos and Campos areas we have over 70 000 sq. km of 3D data. This includes the monumental new Santos Vision 3D reprocessing project, which rejuvenates over 34 000 sq. km of data with the latest imaging techniques. You can read about the challenges, the technology applied, and the striking results in our Santos Vision case study.
- Open Acreage: Around the Equatorial Margin the PGS data library has 20 000 sq. km of 3D data, including 18 000 sq. km GeoStreamer broadband 3D data. Coming soon is our 2018 GeoStreamer coverage of Sergipe Alagoas.
All this modern acquisition, reprocessing, and background understanding will allow you to fully assess the exploration potential and the risks before bidding. Final imaging products for Ceara Fortaleza and Potiguar Aquiraz are available now. Fast track data is available on Potiguar Aracati.
- 16th Round: The Camamu and Sergipe Alagoas areas will be targeted in the 16th Bidding Round and we have some great data to share in these areas.
- New Areas: Our New Ventures team is synchronizing a raft of new projects tailored for the upcoming license rounds, applying tailored and proven technology to uncover the potential of new areas, in dialog with oil companies interested in exploring these areas.
Browse our data library to find out more, or contact our North and South America Sales and New Ventures team to arrange a tailored presentation for your team on your targets.