RIO DE JANEIRO (Reuters) - Brazilian regulator ANP plans to present a list of subsalt offshore exploration areas by early February for the government to consider auctioning at the end of the year as part of what the agency’s new head called a historic opening of the nation’s oil sector.
Décio Oddone, who took the job this month, said in an interview that the second auction in 2017 for areas in the coveted offshore oil region known as the subsalt would “offer areas with distinct characteristics.”
Reuters reported on Jan. 19 that a second subsalt auction was planned for this year, in November, and that the government expected it to generate the most revenue of any in 2017.
The first auction, expected in the first half of this year, will offer areas next to existing discoveries already in development. The November auction will be for new exploration areas.
Without giving specifics, Oddone said the areas auctioned in November would vary in their risk profiles. Some have already been extensively mapped and studied, while others are higher-risk.
This year’s auctions, an effort to lure foreign investment in a sector that for much of the past decade has been the object of protectionist policies, will be the first since 2013 for the subsalt area, where giant discoveries were made starting about a decade ago.
They are also part of a broader planned opening of the industry, which will bring rule changes and more frequent auctions in coming years.
Oddone said the aim was to attract a broad spectrum of bidders by offering cheaper exploration prospects in different auctions to complement the subsalt areas which, due to the technical know-how and billions of dollars needed to develop them, tend to only attract major companies.
The terms of the contracts accompanying the auctions will also be standardized and simplified.
“The idea is that the contracts are attractive, simple and objective,” Oddone said. “We will try to hone the contracts for the auctions this year.”
Together with a massive divestment program by state-run oil company Petroleo Brasileiro SA, the auctions represent the biggest opening in the domestic sector’s history, he said.
“In a few years, we will have a dynamic market in Brazil, with various companies in the subsalt, in the wider offshore areas and onshore.”
Reporting by Marta Nogueira; Writing by Stephen Eisenhammer; Editing by Lisa Von Ahn