Español

 

Guyana


Trinidad
& Tobago




Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

Petrobras CEO says Brazil should end subsalt production-sharing

Riotimesonline.com

Roberto Castello Branco, Petrobras CEO

By Jeff Fick / Platts

RIO DE JANEIRO
Petroleumworld 08 21 2019

Brazil should end the use of its production-sharing regime for developing oil and natural gas reserves in the country's subsalt frontier in a move that could unlock additional growth for Latin America's biggest producer, Petrobras CEO Roberto Castello Branco said Tuesday.

"The production-sharing regime is not efficient," Castello Branco said during a presentation at an event hosted by the Brazilian Petroleum Institute. "It was established by bureaucrats for political convenience."

Brazil implemented the production-sharing regime in 2010 as a way to maintain greater control over the region and keep most of the cash generated by development in the country. The policy obliged state-led Petrobras to be sole operator in the region and created an offshore polygon the size of New York State that required the use of production-sharing contracts in any development.

The production-sharing regime, however, caused development delays amid lackluster participation in the single auction held in 2013, when just one bid was submitted for the Libra area. In addition, Brazil failed to release an annual schedule of production-sharing auctions.

In 2016, Brazil changed the law to allow foreign oil companies to operate subsalt fields sold under production-sharing contracts and set up a five-year schedule of annual licensing auctions.

The changes proved popular with international players, who bid aggressively at recent production-sharing auctions, paid record-setting signing bonuses and guaranteed record profit-oil for the government. Many industry officials believe additional reforms would generate even more interest and investments.

"We definitely need to either end the production-sharing regime or, in a more-moderate move, end the subsalt polygon," Castello Branco said.

Brazil will hold its sixth subsalt production-sharing auction on November 7. The country will also auction off rights to develop 5.2 billion-15.1 billion barrels of recoverable oil discovered by Petrobras in the transfer-of-rights areas on November 6.

COST CUTTING

Oil companies operating in Brazil's subsalt frontier also will need to continue to focus on slashing development costs for the ultra-deepwater province, whether or not the country opts to end its experiment with production-sharing, Castello Branco added.

Cost cutting in the wake of the 2014-2016 collapse in oil prices combined with the high productivity of the subsalt region to reduce Petrobras' lifting costs to about $6/b in the second quarter, Castello Branco said. But the executive expects Petrobras to reduce its lifting costs to less than $6/b by the end of 2019.

"The search for efficiency and cost reductions is continuous," Castello Branco said. While Petrobras' lifting costs are among the world's best, the company still has areas where fat needs to be trimmed, such as in administrative costs and human resources, he said.

 



Story by Jeff Fick from SPGlobal Platts

spglobal.com/platts / 08 20 2019

________________________


We invite you to join us as a sponsor.Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.

________________________

Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.

Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1


TOP

Contact: editor@petroleumworld.com,

Editor & Publisher: Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2019, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2019, Petroleumworld   / Elio Ohep - All rights reserved
This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.