Recently, folks have written about the increases interest in Namibia by the majors. See news piece below that states the government wants 75% of the profits, regardless of whether it is direct from Petrobras pockets or from royalties et al charged to other oil companies.
Maybe the majors are fed up with Dilma and her entourage of sycophants and have decided that their focus should be Namibia. To me, the risk (dry hole, blow-outs, weather dangers, government seizure) in Brazil off-shore far outweighs any reward, even if you hit a huge reservoir.
Brazil's ANP Sees Million Barrel Per Day Oil Output at Libra
Last update: 7/12/2013 12:21:40 PM
By Paul Kiernan
RIO DE JANEIRO--Studies by Brazil's National Petroleum Agency, or ANP, show that peak output at the nation's offshore Libra oil site should reach one million barrels of oil per day, ANP General-director Magda Chambriard said at a news conference Friday.
Current average production of oil in Brazil is just below two million barrels per day.
Ms. Chambriard on Friday reaffirmed the main characteristics of an auction of oil development sites at Libra. The auction is set for October 21 in Rio de Janeiro. It will be the first auction of oil development sites in the so-called pre-salt region, an offshore area featuring ultradeep oil reserves.
The auction of Libra sites will be based on new rules that assure greater participation by state-run oil giant Petrobras (PBR, PETR4.BR) than at previous auctions, all of which covered sites outside of the pre-salt region.
Ms. Chambriard repeated recent assertions by other Brazilian officials indicating that the Brazilian government expects to collect about 75% of all the eventual profits from development of Libra, and other pre-salt sites to be auctioned in the future.
Brazil's government will collect signing bonuses from companies winning the sites as well as royalties for the oil drilled at the sites. The government will also collect taxes on company operations and profits from Petrobras.
Brazilian President Dilma Rousseff has called for all government revenues from the pre-salt region to be used for public education and health. Brazil's Congress is likely to pass legislation to that effect next week.
Ms. Chambriard noted that concessions for the Libra sites will run for 35 years and will not be renewable. "The 35-year concession is intended to guarantee that development occurs at the pace Brazil needs," she said.
She said that only oil companies will be allowed to bid at the October 21 auction. She said bidding consortiums will be limited to five companies each.
Ms. Chambriard also commented on problems faced at another offshore site by troubled Brazilian company OGX (OGXPY, OGXP3.BR).
Earlier this month, private oil and gas developer OGX, controlled by billionaire Eike Batista, said it was weighing whether to shut down an offshore field called Tubarao Azul early in 2014. The field is not located within the pre-salt region.
Ms. Chambriard said the ANP could insist that OGX relinquish its concession to Tubraro Azul in the event it shuts down the field. Under terms of government concessions, concession-holders must invest to develop the sites they win.
"The ANP itself is studying the commercial viability of the Tubraro Azul site," said Ms. Chambriard. "If it's viable, then OGX will have to submit a new investment plan."
Write to Paul Kiernan at paul.kiernan@dowjones.com
(END) Dow Jones Newswires
July 12, 2013 12:21 ET (16:21 GMT)
AI
