The Song Remains the Same

After the undeniably disappointing results in yesterday’s TOR auction, the song remained the same today in Brazil’s 6th pre-salt production sharing round, showing that global oil majors are hesitant with structure offered up by the Brazilian government. Even with more rational pricing and clearer terms, competition over the pre-salt exploration fields was weak, with only one of the five “high-potential” blocks receiving a bid. All in all, the government only brought in R$5.05 billion in signing bouses (approx. US$1.24 billion). For the full results, check out the chart below.

• Aram was up first, receiving only one bid from a consortium made up of Petrobras (80%) and CNOOC (20%). The result was somewhat expected as Petrobras had exercised it right of first refusal to operate the block. 
• Cruzeiro do Sul went next, receiving no bids. 
• Third to hit the auction block was Sudoeste de Sagitário, also receiving no bids.
• Next up was Bumerangue, once again with no bids.
• Last but not least, Norte de Brava also received no bids.