14th August, 2018
Last year, Brazilian farmer Gustavo Lopes sized up his sugarcane plantation against his soybean fields.
8th June, 2018
Brazil's government auctioned off three of the four pre-salt oil fields offered in the fourth round of bidding on yesterday (Thursday 7th June), collecting R$3.15 billion (US$ 807 million).
According to experts and industry executives, the result demonstrated that the interventionist announcements that the government made, concerning fuel price adjustments, did not affect the appetite that companies had to take over the exploration and production sectors.
At the end of the auction, Décio Oddone, the director general of the National Agency for Oil, Gas and Biofuels (ANP), said that "the result is extraordinary". Of the three oil fields that were offered, two had strong competition, while the third was sold to a consortium led by Petrobras, which offered the minimum bid. Of the 16 companies registered, 11 submitted offers in seven different consortiums.
In pre-salt oil field auctions, the signing bonus does not vary: the consortium that commits to offering more oil to the Brazilian government - once production costs have been discounted - wins. According to Mr. Oddone, the federal government earned a surplus of 202% in terms of oil, guaranteeing an extra R$40 billion per year(US$10.3 billion) over the next 30 years - which is approximately how long the contracts last. The most competitive oil fields were Uirapuru and Três Marias. In both of these auctions, the consortiums led by Petrobras were defeated. However, the state-owned company exercised its preemptive right and will participate in the winning consortiums. In Uirapuru, it will form a consortium with Portuguese company Petrogal, Norwegian company Equinor (formerly called "Statoil") and American company Exxon. In Três Marias, Petrobras will join American company Chevron and Anglo-Dutch company Shell. However, in both cases, the state-owned company will have a smaller share than it had wanted as its preemptive right only guarantees a 30% share of the consortium.
In his inaugural address at the beginning of the auction, Mr. Oddone praised the free market and said that companies' freedom to stipulate their own prices would not be tampered with.