the oil and gas industry in brazil · grand hyatt rio de janeiro • rio de janeiro, brazil • 3-4...

G r a n d H y a t t R i o d e J a n e i r o • R i o d e J a n e i r o , B r a z i l • 3 - 4 M a r c h 2 0 2 0

The Oil and Gas Industry in BrazilUpcoming Bidding Rounds and Opportunities

Heloisa Borges Bastos Esteves

National Agency of Petroleum, Natural Gas and Biofuels

© G l o b a l O f f s h o r e B r a z i l S u m m i t a n d G u l f Q u e s t L L C

Notice

• This institutional presentation is based upon or

derived from sources believed to be reliable for

informational purposes only.

• Projections and future values are presented, but no

representation regarding their accuracy or

completeness is made.

• Forward-looking statements regarding our intent,

belief or current expectations may change without

prior notice.


The global energy mix will be the most diversified

the world has seen until 2040, with oil, gas, coal

and non-fossil fuels, each contributing about 25%

Demand for oil will grow, but will peak in the late

2030s

Society and Governments made

that choice

Changes in mobility (electric,

Self-driving/ autnonomous vehicles, app)

Technological Disruptions may speed

the change

Electrification and the transition to a

low carbon economy have already

started

The competition in the energy markets will intensify

Demand for natural gas grows strongly and

surpasses coal as the second largest source

of energy

Brazil needs to boost O&G activities to produce its reserves while they still have value

Energy transition is the future


Brazil is a country of continental

dimensions, however…

Less than 5% of

sedimenty areas are

contracted

2 basin with no wells

Only 30.000 drilled

wells. None them with

unconventional drilling

techniques.

A lot has been done, but we still need to unlock our full potential


38%

Onshore Oil Production

(October/2018)

107.415

91 94108

149

186 182 176

238 232

163

94 85

3926 28

Concluded Exploration Wells

89%

2011/2017

0

200

400

600

800

2015 2016 2017 2018

Concluded Development Wells

160

70%

2015/2017

2012/2018

41% 62%

2014/2018 (SEAL)

2012/2018

729%

Mil

bp

d

28

1.600

1.400

1.200

1.000

800

600

400

200

0

01/2

012

06/2

012

11/2

012

04/2

013

09/2

013

02/2

014

07/2

014

12/2

014

05/2

015

10/2

015

03/2

016

08/2

016

01/2

017

06/2

017

11/2

017

04/2

018

Pre-salt Oil Production

6.500

4.500

16.500

14.500

12.500

10.500

8.500

2013 2014 2015 2016 2017 2018

N.E. Basins Offshore Oil Production

SEAL RNCE

0

500

1.000

1.500

2.000

2012 2013 2014 2015 2016 2017 2018

Campos Basin Post-salt Oil Production

2012/2018


Supermajors

Great Companies

Great Companies

Exploration Experts

Mature Fields Operators

Small and Medium-

sized Companies0301 02

Pre-Salt Conventional

Offshore

Onshore

Supported by the financial market and demanding suppliers and companies of goods and services

Attracting the right players to each opportunities


A lot has been done

End of

2016

Petrobras no

longer the Sole

Operator(Law No

13,365/2016)

2018 14

Bidding Rounds

(2017-2021)

2017 2019

Review of the Agreement of

the Transfer Of Rights

Surplus and Guidelines for

the Bidding Round of the

Surplus

Open Acreage

Bidding Rounds Schedule until

2019

(CNPE Resolution No 10/2017)

New Local Content Rules


New E&P Policies


Prorrogation of Exploration

Phase of the 11th and 12th

Bidding Rounds ( ANP

Resolution No 708/2017)

REPETRO extension

(Law No 13,586/2017)

ANP Resolution on

Exemption of Local Content

for agreements until the 13th

Bidding Round

(ANP Resolution No 726/2018)

ANP Resolution on the

reduction of royalties on

incremental production (ANP

Resolution No 749/2018)

ANP Decision on Mature

Fields Operated by Petrobras

Agreements Assignmet

Resolution and reserve

based lending

Decommissioning Resolution

(under public consultation)

Abandonment Guarantee

Resolution (under public

consultation until the end of

the year)


* Based on the report published in the newspaper O Globo of11/03/2019

Brazil

The rest of the world

Concentration of World E&P bonuses in Brazil from 2017

R$ 220 B, anual average of exploratory

investments in theworld (includes bônus

payments)

The bonuses collected in 2019 represent 40% of thisamount

90%

10%

R$ 111,9 B

R$ 11,6B

0

50.000.000.000

100.000.000.000

150.000.000.000

A T E 2 0 1 6 A P A R T I R D E 2 0 1 7

Accumulate d Bonus

Partilha

Concessão

Industry Escalade


New Operators

Consortia

by block

16th Bidding Rounds Open Acreage

• 10 new independentOnshore Operators

• Increase of 40% inthe quantity ofindependenteoperators

Increase of15% in the

total ofExploration

Agreements.


Taxes and

Government

ShareProduction

PlatformsOil Exportation

Oil Production

A drastic change in the industries activities

2018:~2,6

2030:~7,5Million bpd

2018: ~1,2

2030: ~4 a 5Million bpd

2018: 106

2030: ~170Units

2018: ~ 60(Royalties e SS)

2030: peak ofmore than R$

300(Royalties,SS,alíquita

and IT)

2030 data: evaluation on the potential that can be achieved


Brazil’ Potential

7,5

Production Potential

in 2030

The most prominent

Offshore

environment

Low recovery factor on

average. High potential for

attracting investments

The Brazilian potential is

unknown. The discussion

on the use of

unconventional resourses

must increase

bpd

M

>60New

FPSOs

Contracted or ongoing

New

FrontiersMature

Fields


Potential Impacts on the Brazilian Economy

Bidding Rounds Platforms*Production Peak

(MM bpd)

Nominal

Investments

(billions)*

Tax RevenueNominal Values

(billions)

BID until 2016 27 2,5 US$ 130 (R$ 520) US$ 450 (R$ 1.800)

BID 2017, 2018

2019 22 2,5 US$ 126 (R$ 504) US$ 487 (R$ 1.948)

Transfer of Rights

Surplus17 2 US$ 105 (R$ 420) US$ 489 (R$ 1.956)

Aumento em 5%

no Fator de

Recuperação(revitalization)

- 11 Bi boe in

new reservoisUS$ 90 (R$ 360)

US$ 55 only roalties(R$ 220)

Investments

(until ~ 2030)~R$ 1,8

trillions

* Estimates Investments

R,D&I R$ 3 billion/ year, with peak around

R$ 5 billion/ year


A diverse oil industry

94%

6%

Petrobras Others

2019

Future

Goal: to create a regulatory environment that enables the establish of a real oil industry in Brazil, with a significant number of players operating in each environment

94% of the Brazilian production is operated by

Petrobras.

36 companies

operate production

fields in Brazil

Only 52 companies

have oil production in

Brazil

Petrobras´ divestment plan (more than 100 concessions)

+

Partnerships with majors in

the big mature fields+

Bidding Rounds/

Open Acreage

A diverse oil industry with

multiple players

and operators

Only 7 companies

operate production in

Brazilian offshore

A diverseoil industry (open and competitive market)


Open Acreage: on demand Bidding Rounds

Technicaland

EconomicalParameters

Companiesstudies

Enrollment

Declarationof interest

Disclosure ofna interest

and thebidding

schedule

Deadline for new

enrollments

Offersubmition

(publicsession)

Open AcreageCycles

740 blocks by July 2020

1039 blocksbeing

evaluated

First Cycle: 33 contractsand 16 new operators

© G l o b a l O f f s h o r e B r a z i l S u m m i t a n d G u l f Q u e s t L L CThis is, potentially, the biggest transformation in the sector, completing the opening started in 1997

Opportunity in E&P: immediate certification of reserves; fast development of production; increase of reserves and of production

For the first time effective opening of natural gas market

Refining and Oil Supply: creation of a competitive marketing, open and diverse

Development of a modern, diverse and competitive chain of suppliers


More information:

rodadas.anp.gov.br/pt/

[email protected]

National Agency of Petroleum, Natural Gas and Biofuels

-ANP

Av. Rio Branco, 65, 12º - 22º andar Rio de Janeiro – Brasil

Tel: +55 (21) 2112-8100

the oil and gas industry in brazil · grand hyatt rio de janeiro • rio de janeiro, brazil • 3-4...

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