Brazilian state-led oil company Petrobras and partner Total plan to sell a 30%-65% stake in four exploration-and-production blocks in the Pelotas Basin on the country's southern maritime border with Uruguay, Petrobras said in a prospectus published Monday.
Petrobras owns a 50% operating stake in the BM-P-2 concession contract including the four blocks, while Total retains the remaining 50%. The two companies are working together on the sale, Petrobras said.
The acreage would give a potential investor a head-start evaluating a region that will be one of the featured frontiers in the 18th bid round scheduled to be held in 2021, according to the National Petroleum Agency. While the area holds promise because it runs southwest of Brazil's prolific subsalt play, acreage in the Pelotas Basin failed to elicit any bids for blocks offered during the country's previous bid rounds.
Oil companies have also tepidly responded to bid rounds for similar acreage Uruguay offered further south in recent years. Total drilled a dry well in deep waters offshore Uruguay in 2018, which has also dampened enthusiasm for the play.
Petrobras and Total plan to offer a 30%-65% share of the P-M-1269, P-M-1271, P-M-1351 and P-M-1353 blocks, Petrobras said. Potential investors will also join a consortium committed to drilling a single well in the blocks under terms of the concession contract, according to Petrobras.
The blocks represent "reduced exploratory commitment with the potential to prove significant volumes and consolidate a position in a new exploratory frontier," Petrobras said in the prospectus. "The exploratory blocks are strategically positioned in relation to the next ANP Bid Rounds in the basin."
Interested bidders must submit qualification documents to Petrobras by January 3, the company said.
SERGIPE-ALAGOAS TEST
Petrobras also moved one step closer to starting a long-term well test at the Farfan discovery in the offshore Sergipe-Alagoas Basin last week. Brazilian federal environment regulator IBAMA issued an operations license to carry out the test, which is expected to start by the end of December or early January. The long-term well test had been expected to start in fourth-quarter 2018.
The floating production, storage and offloading vessel Cidade de Sao Vicente will carry out the tests through the end of the second quarter. The FPSO has installed production capacity to pump 30,000 b/d from a single well during the test.
Company and government officials believe the area holds immense potential to produce natural gas, pumping as much as 16 million cubic meters/day by the mid-2020s. Petrobras plans to install an FPSO in the area, which contains about 12 individual discoveries across three separate concession contracts, but the plans have already been delayed several times, including earlier this month with another year-long delay under the latest Petrobras investment to 2024.
Petrobras and an Indian consortium that is its partner in one of the contracts also placed a 20%-50% stake in the project up for sale last year. Under terms of that prospectus, Petrobras would sell up to 35% of the BM-SEAL-4 block, where it holds a 75% stake; a 50% share of its full ownership in the BM-SEAL-4A block; 30% of its full ownership in the BM-SEAL-10 block; and 20% of its 60% stake in the BM-SEAL-11 block. India's ONGC and IBV retain the remaining relevant stakes.
The area has attracted attention from other players in recent years, especially given its geologic similarities to West Africa, and ExxonMobil's major discoveries in the equatorial margin further north. ExxonMobil, Brazilian independent Enauta and Murphy Oil snapped up several exploration blocks surrounding the Petrobras discoveries at bid rounds held in 2017 and 2018.
