Several oil majors on Friday committed to exploring deep-sea oil prospects off
Brazil’s coast following an auction widely seen as a test of the industry’s appetite for crude in the face of the green energy transition.
Total, Petronas and Qatar Petroleum joined with Brazil’s Petrobras in a winning bid to develop the Sépia field in the south Atlantic, while Total and Shell will team up with Petrobras to explore the Atapu prospect.
The two prospects form part of a group of four “pre-salt” fields off Brazil’s coast, which are believed to contain as many as 15bn barrels of oil in total. The high-quality oil is named for the thick crust of salt that sits above the crude.
Amid a global push for clean energy, oil companies are increasingly hesitant about traditional exploration. By joining consortiums in areas with established reserves and relatively clean production, the oil groups could prop up their supply with limited environmental and reputational impact, analysts said.
Petrobras already pumps oil in the region, reducing exploration risks for the oil majors.
“In these fields, there was already oil discovered, so the operational risk is lower. Beyond that, [carbon dioxide] emissions in the pre-salt fields are relatively low compared with other fields, so this justifies the interest of companies even during the beginning of the energy transition,” said Marcelo de
Assis, head of Latin America upstream research at Wood Mackenzie.
The auction in Rio de Janeiro was heralded as a success by the Brazilian government, which claimed almost $2bn in total fees from the oil majors. The Sépia consortium offered 37-4 percent in “profit oil” — the amount they need to share with the government — while the Atapu group offered 31.7 percent.
A further $35bn will be invested by the companies in developing oil and gas production during the 35-year contract. National output is expected to increase by 12 percent over the next five years, according to Bento Albuquerque,
Brazil’s minister for mines and energy.
The success of the auction contrasts with the government’s last oil auction in 2019 when steep prices and complex shi Screenshot turned away major global Dpavers. At the time, Brasilia sought more than $9bn in fees.