Two valuable blocks will not enter the ANP auction

On the eve of the 15th round of bids of oil and gas blocks, the Court of Auditors of the Union (TCU) decided on Wednesday, 28, to suspend provisionally part of the auction scheduled for this Thursday, 29. Of a total of 70 blocks, the court has determined not to be offered precisely the two who have the highest expectation of individual signing bonuses of at least R $3.55 billion, until the court can examine the bidding process on merit. The court determined the immediate communication of the Ministry of Energy Mines and the National Petroleum Agency (ANP).

The two target blocks of the measure are part of the Santos basin.
The minimum bonus for the S-M-534 block is valued at R $1.9 billion, and the S-M-645 block, at R $1.65 billion. The two areas are located in a region of ultra waters and are arranged ahead of the pre-salt polygon, with the potential for discoveries of large oil accumulations in pre-salt.

In addition, the Court decided not to abide by the recommendation of the technical unit and decided not to suspend the offer of the Saturn block in the 4th pre-salt production sharing auction, scheduled for June 7.

One of the reasons for the suspension of the offer at the auction this Thursday is the finding of the court that there may be a risk of loss of R $2.37 billion to the union. According to the rapporteur, the definition of the technical and economic parameters for the related blocks, by CNPE, is without adequate technical support, with risks of damage to the union of R $2.37 billion.

The main flaw detected in this sense was the absence of analysis of the possible behaviors of government revenues and the impacts arising from the worked scenarios and the alternatives of economic parameters and of hiring at the disposal of the CNPE.

The rapporteur, Dr. Cassidy, also pointed out the absence of justifications and analysis as to the advantages and disadvantages of the Union in not declaring the area of Saturn as strategic, except for the greater competition Licitatória empirically expected in the regime of Granting.

The technical unit pointed out that the values set for the signature bonuses, for arrangement of blocks participating in the area of Saturn, in the bids of the 15th round of concession and the fourth round of production sharing, could mean a reduction of R $1.25 billion , in revenue, when compared to the subscription bonus value that could be reached for the same total area, according to the criterion set for the production-sharing auction.

The report also mentions the possibility of external interference in the technical work of the ANP, because of the pressure by the execution of tasks in exiguous deadlines are committing the preparation of technical opinions with diligence and due care with acuteness in Information processing.

Signing bonuses is a value paid to the Union for the right to exploit and produce oil and gas. To take the area, the oil companies have to present the best signing bonus offer at the auction.

The 15th round is expected to be held in two stages: one of offering blocks in the sea and another on land. Maritime areas are the most attractive for large oil companies, while terrestrials are more focused on smaller businesses.

In all, 70 blocks, 49 of them will be offered, distributed in five sedimentary basins. The Campos and Santos basins, the main national producers, are also the ones that offer the best investment opportunities. The blocks of the two basins have geological characteristics of pre-salt and are located near large reservoirs. The expectation of the national Oil agency, Natural gas and biofuels is to raise R $3.5 billion in the auction.

On Tuesday 27, the president of Petrobras, Pedro Kinsman, warned that investors might not appear at the 15th round auction because of the possibility that the Legislative Assembly of the state of Rio de Janeiro (ALERJ) did not adhere to the Repetro, fiscal regime Customs, approved in Congress, which exempts from taxes the import of equipment still in the phase of investments-when the production was not initiated and there is no generation of cash.
Relative came to call "irrational" the project presented in Alerj that could leave the river out of the Repetro, adopted in the rest of the country. "Taxing investment is one of the most irrational things that can exist," he said. Source: State Agency

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