Brazil raises record bonus at 16th bid round

Brazil has sold 12 of the 36 offshore blocks on sale at the country's 16th bid round, with oil companies once again paying record signing bonuses for areas holding subsalt potential in the Campos Basin, reports S&P Global Platts. The 36 blocks hold an estimated 70bn barrels of unrisked oil under the P50 model, which forecasts a 50% chance of exploration success, according to Brazil's National Petroleum Agency (ANP).

Oil companies led by France's Total and Malaysia's Petronas Shell are understood to have paid Real 8.9bn ($2.2bn) for the 12 blocks, three times the minimum bonuses set for the sale and topping the previous record of Real 8bn raised during Brazil's 15th bid round held in 2018.

The blocks in the Campos and Santos basins were considered the most attractive in the sale because they hold subsalt potential but are located outside the subsalt polygon that requires production-sharing contracts, according to S&P Global. That means companies own the oil reserves and pay royalties on production, rather than give Brazil's government a share of profit oil. A total of 10 of the 13 blocks on sale in the Campos Basin were sold, and two of the Santos Basin's 11 blocks on offer.