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Total win $1 billion Brazilian deep offshore pre-salt license

11/10/2019
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Total, in a consortium with Malaysia’s Petronas and Qatar Petroleum have won exploration and production rights for the C-M-541 deep offshore block in Brazil’s pre-salt Campos Basin with a bid of just under $1 billion.

Through acquisition of exploration and production rights to this block, Total are expanding their footprint in Brazil's pre-salt region which currently includes projects like the Libra field
(Image via Total)

The block was part of the 16th bidding round held by Brazil’s National Petroleum Agency (ANP) on Thursday. The consortium bid 4.029 billion reais ($980 million) for the block, for which Total will be the operator with a 40% stake. Qatar Petroleum will also hold 40%, while Petronas will retain 20%.

The pre-salt area is a highly coveted zone that’s estimated to hold billions of barrels of oil beneath a thick salt layer on the ocean floor. Block C-M-541 is a fringe block, with a water depth of 3,000m, and is believed to share some geology with the pre-salt area. 

“Total is pleased to expand its footprint in the Campos Basin with this new operated exploration block, alongside two strategic partners. It is another demonstration of our ability to seize high quality exploration acreage in a key growth area for the Group,” said Patrick Pouyanné, Chairman and CEO of Total. 

“This is in line with our strategy to continue building our operator positions in Brazil’s deep offshore, where we can add value thanks to our deepwater competencies. It follows on from our acquisition in 2016, through successful direct negotiations with Petrobras, of operatorship of the Lapa field and an interest in the Iara concession. We have also launched development phases 1 and 2 of the giant Mero field.”

Two larger auctions are scheduled for 6th and 7th November, in which pre-salt blocks will be available. However, Pouyanné went on to say in a statement that the company will not participate.

“In this context, Total confirms that it will not participate in the upcoming Transfer-of-Rights (TOR) Surplus Round, as the competitive tender is only offering non-operated interests.”

The consortium plan to drill their first exploration well in the newly acquired block in 2021.

Total are growing their interests in deep water fields offshore Brazil
(Image via Total)

Other bidding successes

Total’s consortium made the largest investments in Thursday’s auctions, but they weren’t the only ones to come aware with interests. Exploration and production rights were awarded for 12 offshore oil blocks, to ten companies. 

In all, the Brazilian government raised $2.2 billion.

Petronas won a separate block in the Campos Basin with a bid of 1.116 billion reais ($270 million). And Petrobras joined BP to take a block for 2.045 billion reais ($500 million).

Shell, Wintershall, Chevron, ExxonMobil and Repsol all won at least minority stakes in exploration blocks. 

Twenty-four blocks, many in marginal oil producing areas, did not attract a bidder so will be placed in a “permanent offer” program by the Brazilian government.

All in, the auction raised approximately $2.2 billion for the Brazilian government, with Mines and Energy Minister Bento Albuquerque calling the results “well above expectations”.

It’s thought that the upcoming larger auctions will bring in around $25 billion for the government.

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Total win $1 billion Brazilian deep offshore pre-salt license - Time to read 3 min
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