ANP Says China's CNOOC Pulls Out of Brazil Oil-Concession Auction

Chinese integrated oil company CNOOC Ltd. pulled out of an auction of oil and natural gas exploration concessions in Brazil, the country's National Petroleum Agency, or ANP, said Tuesday.

ANP officials gave no reason for the company's withdrawal. CNOOC officials were not immediately available to comment. The ANP had approved 64 companies for the auction, the country's first since 2008.

The ANP is offering 289 oil and natural gas exploration blocks for sale at the auction.

The fresh round of bidding is expected to generate a surge in activity across Brazil's oil industry, which was running out of areas to explore in the absence of concession auctions. Oil companies had warned that exploration could dry up as soon as 2015 without new sales of exploration acreage.

The auction is the first of several sales of exploration acreage set to take place in Brazil this year, including the first sale of subsalt exploration acreage under new production-sharing agreements.

Billions of barrels of oil have been discovered in the subsalt region, where oil and natural gas were found trapped deep beneath the ocean floor under a thick layer of salt. Unconventional oil and natural gas concessions, the same type of shale and tight gas acreage that sparked an oil-industry revolution in the U.S., are also expected to be sold this year.

Many of the world's largest oil companies from 18 different countries have been cleared to participate in the auction, including Exxon Mobil Corp., Chevron Corp. and BP. Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, entrepreneur Eike Batista's OGX Petroleo e Gas Participacoes and startup HRT Participacoes em Petroleo also have been approved.

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Karoon Gas Increases Size of Oil Discovery Offshore Brazil

SYDNEY - Karoon Gas Australia Ltd. Friday raised the size estimate of its Bilby-1 oil discovery off the coast of Brazil, increasing the likelihood of a commercial development.

Further testing has indicated the well has a proven gross oil column of 320 meters and a potential column of 560 meters, up from an initial estimate of 200 meters, Karoon said in a statement.

The net oil-bearing reservoir, or the parts of the column that contain oil, is estimated around 70 meters, with porosity levels, which indicate the oil's ability to flow from rock, up to 23%, Karoon said.

The Australian company has discovered oil in two out of three wells drilled in the Santos Basin, located south of Rio de Janeiro, with joint venture partner Pacific Rubiales Energy Corp. Karoon owns 65% of the venture and analysts expect it to sell more of its interest if there is enough oil to underpin a multibillion dollar development.

The Bilby-1 discovery follows the success of the Kangaroo-1 well offshore Brazil. However, the Emu-1 well was a dry hole.

Karoon is planning to test the Kangaroo and Bilby discoveries with appraisal wells.

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Brazil Seeks to Expand Oil, Gas Investment with 11th Bidding Round

The director of Brazil's Agencia Nacional do Petroleo (ANP) reports significant interest from operators in Brazil's upcoming 11th bidding round as Brazil pursues its plans to double its oil and natural gas production. The bidding round is the first since December 2008 and the first under the nation's new hydrocarbon law.

ANP will offer 189 blocks across 11 Brazilian states. Ten of these states are located in north and northeastern Brazil in the 11th round, the largest in terms of activity since the ninth bidding round, in an effort to expand oil and gas investment from the southeast to other parts of Brazil, ANP director Magda Chambriard told attendees Wednesday at the 2013 Offshore Technology Conference in Houston.

Sixty-four companies were qualified for the round and 44 companies received bid bonds, and 30 oil and gas companies have already been classified as operators. Companies from 21 countries expressed interest in the round, including a number of new entrants to Brazil. Seventeen Brazilian companies have been qualified as operators, as well as seven U.S. companies, five UK-based companies, five Canadian companies and five Japanese companies.

Chambriard, who has worked in the oil and gas industry for over 30 years and took over as ANP director last year, said she has never seen such possibilities as what is being offered this year. Acreage being offered in Brazil's upcoming 11th bidding round bears similarities to oil producing regions in Africa's Equatorial Margin and the Gulf of Mexico, Chambriard commented. Salt movement seen in acreage in the Eastern Margin area is also similar to that found in the Gulf of Mexico.

The 2011 Zaedyus discovery offshore neighboring French Guyana indicates the potential of Equatorial Margin acreage being offered in the 11th round.

Additional oil and gas investment opportunities for onshore conventional and unconventional gas, mature basins and pre-salt will be offered in two separate bidding rounds later this year. Forty-four companies have applied to participate in Brazil's 12th bidding round, to be held Oct. 30-31, which will include acreage in several basins, including the Parnaiba and Pareas, which are estimated to contain in-situ gas volumes of 64 trillion cubic feet (Tcf) and 124 Tcf.

Requirements for the pre-salt bidding round – scheduled for Nov. 28-29 – call for Petroleo Brasileiro S.A. (Petrobras) to continue to serve as operator for concessions due in part to its experience in drilling pre-salt and safety concerns. Concessions will be awarded to the highest bidder. The company will retain a 30 percent interest if it loses in the bidding round, but can raise that stake higher if it wins a bid. Chambriard remains confident that development plans.

ANP may offer the Libra prospect, which has been initially estimated to contain 18 billion barrels of oil, in the upcoming round.

The 11th bidding round will have the same local content law requirements as seen in previous bidding rounds, but will change for the 12th round. However, Chambriard does not believe these new requirements will pose a significant issue for onshore projects.

Chambriard noted that the production sharing contract (PSC) being offered is similar to that seen in other countries. But in Brazil, the PSC is not negotiable, and concession holders must pay a 15 percent royalty. Concession holders will be able to deduct the royalty from oil production.

While unconventional gas acreage is being offered this year, Petrobras CEO Marcia Foster has said that shale gas is not a priority for Petrobras. Chambriard believes this opens the door for opportunities for other Brazilian and international companies. However, Chambriard thinks that oil and gas companies will pursue conventional gas opportunities first.

"It doesn't matter if it's conventional or unconventional, just as long as it's being produced," Chambriard commented.

Chambriard noted that an estimated $400 billion in supplier opportunities to provide goods and services for the oil and gas activity will be available through the next decade.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Karoon Finds Oil Offshore Brazil, Shares Jump

SYDNEY - Karoon Gas Australia Ltd. has made its second significant oil discovery offshore Brazil, sending its shares soaring as much as 28% Monday and increasing the possibility of finding another partner to share development costs.

The Australian company has now discovered oil in two out of three wells drilled in the Santos Basin, located south of Rio de Janeiro, with joint venture partner Pacific Rubiales Energy Corp. Karoon owns 65% of the venture and analysts expect it sell more of its interest if there's enough oil to underpin a multibillion dollar development.

Karoon said the Bilby-1 well discovered oil across a 200-meter gross column, although more work needs to be done to determine the size of the find and whether it can be developed commercially.

The rise in Karoon's stock lifted the company's value to 1.1 billion Australian dollars (US $1.1 billion), although doubts remain about its ability to fund projects that include developing natural gas fields offshore Australia in partnership with ConocoPhillips.

Scott Ashton, a senior energy analyst at BBY in Sydney, said it is too early to be sure the Bilby discovery can be developed commercially. "We do not know the net pay, the quality of the oil, and whether it is capable of flowing," he said in a note.

The well hasn't yet reached its target depth of 4,537 meters and Karoon expects further drilling to encounter a different geological structure, which could also contain oil.

The Bilby-1 discovery follows the success of the Kangaroo-1 well offshore Brazil. However, the drilling program hasn't been a complete success, with the Emu-1 well failing to find commercial quantities of oil.

The fluctuating fortunes of the drilling campaign has intensified volatility in the company's shares. Karoon was worth A$1.6 billion as recently as early March, just before it announced the outcome of the Emu-1 well.

Karoon is planning to test the Kangaroo and Bilby discoveries with appraisal wells.

Citigroup analyst Mark Greenwood said earlier this year that Karoon could eventually reduce its holding in the Brazil venture to 20% to raise funds for drilling and development.

Edward Munks, Karoon's chief operating officer, told The Wall Street Journal in March that the company had several funding options. "Having a discovered resource with high equity levels gives you a lot of flexibility," Mr. Munks said.

Options include a further stake sale, issue of new Karoon shares or an initial public offering of the South American assets. Of these, Mr. Munks said the company isn't likely to revisit an IPO after shelving plans in 2010.

The venture's properties are in much shallower water than giant discoveries made by international energy companies further offshore Brazil, such as the Tupi field.

However, significant commercial discoveries have been made close to the coast. Among the most notable is the Piracuca oil field just five kilometers northeast of Karoon's blocks. Petroleo Brasileiro SA, known as Petrobras, and partner Repsol SA in 2009 declared Piracuca a commercial discovery estimated to contain 550 million barrels of light oil.

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Karoon Finds Oil Offshore Brazil, Shares Jump

SYDNEY - Karoon Gas Australia Ltd. has made its second significant oil discovery offshore Brazil, sending its shares soaring as much as 28% Monday and increasing the possibility of finding another partner to share development costs.

The Australian company has now discovered oil in two out of three wells drilled in the Santos Basin, located south of Rio de Janeiro, with joint venture partner Pacific Rubiales Energy Corp. Karoon owns 65% of the venture and analysts expect it sell more of its interest if there's enough oil to underpin a multibillion dollar development.

Karoon said the Bilby-1 well discovered oil across a 200-meter gross column, although more work needs to be done to determine the size of the find and whether it can be developed commercially.

The rise in Karoon's stock lifted the company's value to 1.1 billion Australian dollars (US $1.1 billion), although doubts remain about its ability to fund projects that include developing natural gas fields offshore Australia in partnership with ConocoPhillips.

Scott Ashton, a senior energy analyst at BBY in Sydney, said it is too early to be sure the Bilby discovery can be developed commercially. "We do not know the net pay, the quality of the oil, and whether it is capable of flowing," he said in a note.

The well hasn't yet reached its target depth of 4,537 meters and Karoon expects further drilling to encounter a different geological structure, which could also contain oil.

The Bilby-1 discovery follows the success of the Kangaroo-1 well offshore Brazil. However, the drilling program hasn't been a complete success, with the Emu-1 well failing to find commercial quantities of oil.

The fluctuating fortunes of the drilling campaign has intensified volatility in the company's shares. Karoon was worth A$1.6 billion as recently as early March, just before it announced the outcome of the Emu-1 well.

Karoon is planning to test the Kangaroo and Bilby discoveries with appraisal wells.

Citigroup analyst Mark Greenwood said earlier this year that Karoon could eventually reduce its holding in the Brazil venture to 20% to raise funds for drilling and development.

Edward Munks, Karoon's chief operating officer, told The Wall Street Journal in March that the company had several funding options. "Having a discovered resource with high equity levels gives you a lot of flexibility," Mr. Munks said.

Options include a further stake sale, issue of new Karoon shares or an initial public offering of the South American assets. Of these, Mr. Munks said the company isn't likely to revisit an IPO after shelving plans in 2010.

The venture's properties are in much shallower water than giant discoveries made by international energy companies further offshore Brazil, such as the Tupi field.

However, significant commercial discoveries have been made close to the coast. Among the most notable is the Piracuca oil field just five kilometers northeast of Karoon's blocks. Petroleo Brasileiro SA, known as Petrobras, and partner Repsol SA in 2009 declared Piracuca a commercial discovery estimated to contain 550 million barrels of light oil.

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Petronas Denies Signing Pact for Brazil Oil Rights

KUALA LUMPUR - Malaysia's state-run oil and gas company Petroliam Nasional Bhd., or Petronas, hasn't signed any pact with Brazil's OGX Petroleo e Gas Participacoes SA or any other company to purchase rights in a Brazilian oil block, Petronas said in a statement Wednesday. 

The company was responding to media reports that Petronas is in talks to acquire OGX's 40% interest in the Tubarao Martelo oil block in Brazil's Campos Basin. 

Petronas last year bought Canada's Progress Energy Resources Corp. in a 5.18 billion Canadian dollar ($5.1 billion) deal.

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Shell Studying Oil, Gas Areas Up for Bids in Brazil Auctions

RIO DE JANEIRO - Anglo-Dutch oil major Royal Dutch Shell is interested in Brazil's upcoming oil and natural gas concession auctions but has not yet decided whether to participate, Chief Executive Peter Voser said Thursday.

"Shell will study the bid areas and make a technical evaluation before deciding how to participate" in the auctions, Mr. Voser told reporters. The first of three auctions scheduled for this year will be held May 14-15, the first such bid round since 2008.

"Our assumption is that Brazil has significant resources being developed and to be developed," Mr. Voser said, noting that Latin America's largest country will play an important role in the global oil and natural gas map in the future.

In addition to the concession auction, Mr. Voser said that Shell was evaluating assets state-run energy giant Petroleo Brasileiro, or Petrobras, has put up for sale in Brazil and the Gulf of Mexico. Petrobras plans to sell $9.9 billion in assets to fund its $237 billion investment plan through 2017.

"We have a very successful partnership with Petrobras and are interested in further collaboration," Mr. Voser said.

Shell is also carefully watching developments in Venezuela, where the company has a small operation in the Lake Maracaibo region, Mr. Voser said. Venezuela has suffered with political unrest following President Hugo Chavez's death and last weekend's election of his handpicked successor, Nicolas Maduro.

"We take a long-term view on investments in Venezuela," Mr. Voser said, adding that Shell was on the lookout for growth opportunities in the country that is home to the world's largest crude-oil reserves.

Elsewhere, Mr. Voser said, the shale gas revolution in the U.S. could fundamentally change industry in the world's largest economy. "Cheap natural gas feedstock could drive a reindustrialization in the U.S.," Mr. Voser said, bringing previously outsourced manufacturing heavy industry and petrochemicals output back to the U.S.

Shell also expects the U.S. to approve exports of between 50 million and 60 million tons of liquefied natural gas derived from shale gas, Mr. Voser said.

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Shell Studying Oil, Gas Areas Up for Bids in Brazil Auctions

RIO DE JANEIRO - Anglo-Dutch oil major Royal Dutch Shell is interested in Brazil's upcoming oil and natural gas concession auctions but has not yet decided whether to participate, Chief Executive Peter Voser said Thursday.

"Shell will study the bid areas and make a technical evaluation before deciding how to participate" in the auctions, Mr. Voser told reporters. The first of three auctions scheduled for this year will be held May 14-15, the first such bid round since 2008.

"Our assumption is that Brazil has significant resources being developed and to be developed," Mr. Voser said, noting that Latin America's largest country will play an important role in the global oil and natural gas map in the future.

In addition to the concession auction, Mr. Voser said that Shell was evaluating assets state-run energy giant Petroleo Brasileiro, or Petrobras, has put up for sale in Brazil and the Gulf of Mexico. Petrobras plans to sell $9.9 billion in assets to fund its $237 billion investment plan through 2017.

"We have a very successful partnership with Petrobras and are interested in further collaboration," Mr. Voser said.

Shell is also carefully watching developments in Venezuela, where the company has a small operation in the Lake Maracaibo region, Mr. Voser said. Venezuela has suffered with political unrest following President Hugo Chavez's death and last weekend's election of his handpicked successor, Nicolas Maduro.

"We take a long-term view on investments in Venezuela," Mr. Voser said, adding that Shell was on the lookout for growth opportunities in the country that is home to the world's largest crude-oil reserves.

Elsewhere, Mr. Voser said, the shale gas revolution in the U.S. could fundamentally change industry in the world's largest economy. "Cheap natural gas feedstock could drive a reindustrialization in the U.S.," Mr. Voser said, bringing previously outsourced manufacturing heavy industry and petrochemicals output back to the U.S.

Shell also expects the U.S. to approve exports of between 50 million and 60 million tons of liquefied natural gas derived from shale gas, Mr. Voser said.

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Pacific Rubiales Farms-In to Bilby Well Offshore Brazil

Pacific Rubiales Energy has exercised its option to acquire a 35-percent interest in Block S-M-1166 located in the Santos Basin offshore Brazil. The block is held by Karoon Gas Australia Ltd. (Karoon) and Pacific will exercise its right to acquire a stake through the funding and participation in the Bilby-1 exploration well.

This marks the third exploration well within the Karoon blocks that Pacific has participated in, following the Kangaroo-1 and Emu-1 wells.

As for the Bilby-1 well, Pacific will complete the minimum work commitments required to retain a stake in all five blocks (S-M-1037, -1101, -1102, -1165 and -1166) and request operatorship of the project. The transaction is subject to regulatory approval.

"Although we are in early exploration stages, we are pleased with the results to date and our partnership with Karoon," said Ronald Pantin, CEO of Pacific Rubiales, in a statement. "Our first well, Kangaroo-1, discovered oil in an Eocene structure and we are looking forward to following up with an appraisal well as soon as a suitable drilling rig can be sourced and mobilized to the Kangaroo-2 location."

Karoon spud the Kangaroo well in December 2012 using the Blackford Dolphin (mid-water semisub). Currently, the rig is drilling the Emu-1 well and it is expected that Karoon will use the same rig to drill the Bilby-1 well.

The Emu-1 well in the Santos Basin reached total depth with initial wireline results showing the main objective to be water bearing, said Tudor Pickering & Holt in a March 28 analyst report.

"It does not change our view on geological chance of success in the basin."

It is estimated that Bilby, situated in a water depth of 1,320 feet, contains a potentially significant sized Eocene accumulation with multiple targets at several geological levels, including the Santonian, Campanian, Maestrichtian, Eocene and Miocene. The well is expected to reach total depth in 2Q.

Karoon currently holds 100 percent interest in the Santos Basin Blocks.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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Pacific Rubiales Farms-In to Bilby Well Offshore Brazil

Pacific Rubiales Energy has exercised its option to acquire a 35-percent interest in Block S-M-1166 located in the Santos Basin offshore Brazil. The block is held by Karoon Gas Australia Ltd. (Karoon) and Pacific will exercise its right to acquire a stake through the funding and participation in the Bilby-1 exploration well.

This marks the third exploration well within the Karoon blocks that Pacific has participated in, following the Kangaroo-1 and Emu-1 wells.

As for the Bilby-1 well, Pacific will complete the minimum work commitments required to retain a stake in all five blocks (S-M-1037, -1101, -1102, -1165 and -1166) and request operatorship of the project. The transaction is subject to regulatory approval.

"Although we are in early exploration stages, we are pleased with the results to date and our partnership with Karoon," said Ronald Pantin, CEO of Pacific Rubiales, in a statement. "Our first well, Kangaroo-1, discovered oil in an Eocene structure and we are looking forward to following up with an appraisal well as soon as a suitable drilling rig can be sourced and mobilized to the Kangaroo-2 location."

Karoon spud the Kangaroo well in December 2012 using the Blackford Dolphin (mid-water semisub). Currently, the rig is drilling the Emu-1 well and it is expected that Karoon will use the same rig to drill the Bilby-1 well.

The Emu-1 well in the Santos Basin reached total depth with initial wireline results showing the main objective to be water bearing, said Tudor Pickering & Holt in a March 28 analyst report.

"It does not change our view on geological chance of success in the basin."

It is estimated that Bilby, situated in a water depth of 1,320 feet, contains a potentially significant sized Eocene accumulation with multiple targets at several geological levels, including the Santonian, Campanian, Maestrichtian, Eocene and Miocene. The well is expected to reach total depth in 2Q.

Karoon currently holds 100 percent interest in the Santos Basin Blocks.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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BP: Commercial Flow Rates at Itaipu-1, Offshore Brazil

LONDON - BP PLC Monday said it has completed a flow test at its Itaipu-1A well offshore Brazil, one of the world's most promising oil and gas frontiers, that indicates commercially viable flow rates from the pre-salt reservoir.

BP said the test achieved flow rates of up to 5,600 barrels of oil a day for 32 hours from the well, which is located in the deep-water sector of the Campos Basin, 125 kilometers offshore Brazil.

"This is a good result for the Itaipu project, indicating that commercially viable flow rates can be achieved from this pre-salt carbonate reservoir," said BP vice president for exploration Brazil Neil Piggott.

Geologists believe the oil and gas exploration areas off Brazil's northeastern coast may hold similar reserves to those found in west Africa. Bountiful hydrocarbon discoveries in the last decade have led to a near 70% rise in the South American country's proven oil and gas reserves. Much of that success has been achieved by tapping reservoirs contained beneath an ultra-deep layer of salt that lies thousands of meters below the seabed.

The Itaipu-1A pre-salt well was drilled in 2009 by Devon. BP purchased Devon's interests in Brazil in 2011.

The Itaipu-2 appraisal well was drilled in 2011. A second appraisal well location, Itaipu-3, has been agreed with the Brazilian National Petroleum Agency, and will be the next operation at the Itaipu field later this year.

BP is the operator of the block with 40% equity. Anadarko Petroleum Corp. (APC) holds a 33.3% stake in the block and Maersk Energia Ltda. has a 26.7% share.

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Japan Firms Plan to Invest in Brazil FPSO

TOKYO - Four Japanese companies announced a plan Friday to invest in a floating vessel which is used by the offshore oil and gas industry to be deployed in an oil field near Brazil.

Mitsui & Co., Mitsui OSK Lines Ltd., Marubeni Corp. and MODEC Inc. will invest in a 20-year charter project of a floating production, storage and offloading system operated by MODEC for use in the Iracema Norte block of a pre-salt oil field off the coast of Brazil owned by Petroleo Brasileiro SA, the companies said in a statement.

Mitsui, Mitsui OSK Lines and Marubeni will own 32.4%, 20.6% and 17.6% of the project respectively, while MODEC will own the remaining 29.4%, the statement said.

The FPSO for the Iracema Norte block will start operations in the fourth quarter of 2015, and has the capacity to produce 150,000 barrels a day of crude oil and 280 million cubic feet of natural gas, it said.

This will be the second FPSO project the four Japanese companies are jointly investing in. The one serving the nearby Iracema Sul block was the first.

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Subsea 7 Scoops Up Petrobras Work Offshore Brazil

Subsea 7 S.A. announced the award of three contracts with a combined value in excess of $300 million from Petrobras.

The scope of work comprises the installation of flexible lines by the Seven Seas, under two lump sum contracts and one day rate contract.

The lump sum contracts encompass the installation of two export flexible Lazy Wave Risers at the Sapinhoa and Lula NE fields in the Santos Pre-Salt Basin in water depths of approximately 6,890 feet (2,100 meters). The day-rate contract encompasses the project management, engineering and installation of Petrobras - supplied flowlines and umbilicals. Operations will commence in 2013.

"We’re proud to be selected by Petrobras to perform these important projects, using our in-depth experience of operating in ultra-deep water. We look forward to supporting Petrobras in future developments," Subsea 7 Senior Vice President for Brazil Victor Bomfim said.

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Subsea 7 Scoops Up Petrobras Work Offshore Brazil

Subsea 7 S.A. announced the award of three contracts with a combined value in excess of $300 million from Petrobras.

The scope of work comprises the installation of flexible lines by the Seven Seas, under two lump sum contracts and one day rate contract.

The lump sum contracts encompass the installation of two export flexible Lazy Wave Risers at the Sapinhoa and Lula NE fields in the Santos Pre-Salt Basin in water depths of approximately 6,890 feet (2,100 meters). The day-rate contract encompasses the project management, engineering and installation of Petrobras - supplied flowlines and umbilicals. Operations will commence in 2013.

"We’re proud to be selected by Petrobras to perform these important projects, using our in-depth experience of operating in ultra-deep water. We look forward to supporting Petrobras in future developments," Subsea 7 Senior Vice President for Brazil Victor Bomfim said.

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Brazil Releases Tender, Contract Details for Oil Concession Auction

RIO DE JANEIRO - Brazil's National Petroleum Agency on Tuesday published the final tender and concession contract details for the keenly awaited auction of new oil and natural gas concessions set for May 14-15.

The so-called 11th bidding round will put 289 oil and natural gas exploration blocks up for sale, Brazil's first such auction since December 2008.

The fresh round of bidding is expected to generate a surge in activity across Brazil's oil industry, which was running out of areas to explore in the absence of concession auctions. Oil companies had warned that exploration could dry up as soon as 2015 without new awards of exploration acreage.

The 11th round auction is the first of several sales of exploration acreage set to take place in Brazil this year, including the first sale of subsalt exploration acreage under new production-sharing agreements. Billions of barrels of oil have been discovered in the subsalt region, where oil and natural gas were found trapped deep beneath the ocean floor under a thick layer of salt.

Unconventional oil and natural gas concessions, the same type of shale and tight gas acreage that sparked an oil-industry revolution in the U.S., are also expected to be sold this year.

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Brazil Releases Tender, Contract Details for Oil Concession Auction

RIO DE JANEIRO - Brazil's National Petroleum Agency on Tuesday published the final tender and concession contract details for the keenly awaited auction of new oil and natural gas concessions set for May 14-15.

The so-called 11th bidding round will put 289 oil and natural gas exploration blocks up for sale, Brazil's first such auction since December 2008.

The fresh round of bidding is expected to generate a surge in activity across Brazil's oil industry, which was running out of areas to explore in the absence of concession auctions. Oil companies had warned that exploration could dry up as soon as 2015 without new awards of exploration acreage.

The 11th round auction is the first of several sales of exploration acreage set to take place in Brazil this year, including the first sale of subsalt exploration acreage under new production-sharing agreements. Billions of barrels of oil have been discovered in the subsalt region, where oil and natural gas were found trapped deep beneath the ocean floor under a thick layer of salt.

Unconventional oil and natural gas concessions, the same type of shale and tight gas acreage that sparked an oil-industry revolution in the U.S., are also expected to be sold this year.

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ABB Bags $160M Worth of Electrical Systems for Drillship Orders in Brazil

ABB disclosed Friday that it has won orders worth $160 million from Jurong Shipyard for the design, supply, supervision of installation, testing and commissioning of the main electrical systems for seven next generation drill ships that will operate in the deep water oil and gas fields off the coast of Brazil. The orders were booked in 4Q 2012 and 1Q 2013.

The ships will be used to drill wells in the enormous offshore pre-salt fields off the southeast coast of Brazil. ABB's integrated electrical package will provide a reliable power supply to subsystems onboard ships and help the operators maximize their energy efficiencies.

 The seven vessels are the first in a series of high-efficiency drill ships designed for ultra-deep water operations and built by Estaleiro Jurong Aracruz at their shipyard on the central eastern coast of Espirito Santo, Brazil. It is a wholly-owned shipyard of the Jurong Shipyard based in Singapore.

"ABB's ability to provide locally produced content for this project and the expertise of our local organization were important factors in winning this order. This represents a breakthrough for ABB in the Brazilian market," said Veli-Matti Reinikkala, Head of ABB’s Process Automation division.

"ABB has a great record of project execution for similar projects with Jurong’s shipyard in Singapore; the trust achieved over time with the shipyard was crucial for us in closing this agreement," added Haider Rashid, region manager for ABB in South Asia and country manager of Singapore.

ABB's scope of supply includes complete electrical systems including generators, distribution switchboards, transformers, drives and motors to power the ships' thrusters and drilling systems. Equipment deliveries to the shipyard are scheduled for this year, with the first vessel to be delivered to the ship-owner in the second quarter of 2015.

Equipment deliveries to the shipyard are scheduled for 2013, with the first vessel to be delivered to the ship-owner in the second quarter of 2015.

The ships will be delivered to Sete Brazil, a company established in 2010 by various Brazilian and international investors. On delivery, the seven drill-ships will be chartered to Petrobras for 15 years. Three of the ships will be partially owned and operated for Petrobas by Odfjell and three by Seadrill, both Norwegian based companies.

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ABB Bags $160M Worth of Electrical Systems for Drillship Orders in Brazil

ABB disclosed Friday that it has won orders worth $160 million from Jurong Shipyard for the design, supply, supervision of installation, testing and commissioning of the main electrical systems for seven next generation drill ships that will operate in the deep water oil and gas fields off the coast of Brazil. The orders were booked in 4Q 2012 and 1Q 2013.

The ships will be used to drill wells in the enormous offshore pre-salt fields off the southeast coast of Brazil. ABB's integrated electrical package will provide a reliable power supply to subsystems onboard ships and help the operators maximize their energy efficiencies.

 The seven vessels are the first in a series of high-efficiency drill ships designed for ultra-deep water operations and built by Estaleiro Jurong Aracruz at their shipyard on the central eastern coast of Espirito Santo, Brazil. It is a wholly-owned shipyard of the Jurong Shipyard based in Singapore.

"ABB's ability to provide locally produced content for this project and the expertise of our local organization were important factors in winning this order. This represents a breakthrough for ABB in the Brazilian market," said Veli-Matti Reinikkala, Head of ABB’s Process Automation division.

"ABB has a great record of project execution for similar projects with Jurong’s shipyard in Singapore; the trust achieved over time with the shipyard was crucial for us in closing this agreement," added Haider Rashid, region manager for ABB in South Asia and country manager of Singapore.

ABB's scope of supply includes complete electrical systems including generators, distribution switchboards, transformers, drives and motors to power the ships' thrusters and drilling systems. Equipment deliveries to the shipyard are scheduled for this year, with the first vessel to be delivered to the ship-owner in the second quarter of 2015.

Equipment deliveries to the shipyard are scheduled for 2013, with the first vessel to be delivered to the ship-owner in the second quarter of 2015.

The ships will be delivered to Sete Brazil, a company established in 2010 by various Brazilian and international investors. On delivery, the seven drill-ships will be chartered to Petrobras for 15 years. Three of the ships will be partially owned and operated for Petrobas by Odfjell and three by Seadrill, both Norwegian based companies.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Brazil Oil Workers to Vote on Wider Petrobras Strike

RIO DE JANEIRO - Brazilian oil workers will vote to approve a five-day strike at state-run energy company Petroleo Brasileiro, or Petrobras, that would likely interrupt oil production at the company, a union official said Friday.

The strike is tentatively scheduled to start Feb. 20, said Joao Antonio de Moraes, general coordinator for the Brazilian Oil Workers Federation, or FUP. FUP is an umbrella union representing about two-thirds of Petrobras's 80,000 employees.

If approved, the strike would come at a delicate time for Petrobras. Petrobras has struggled with flagging crude-oil production over the past year because of declining recovery rates at mature fields and maintenance shutdowns at ageing offshore platforms. The company's finances have also been stretched because of heavy imports of gasoline and diesel fuel that the company is forced to sell at a loss in the domestic market.

Petrobras reports fourth-quarter earnings results Monday, with year-on-year net profits expected to rise about 20%. The company's full-year profit, however, is expected to be the worst in nearly a decade.

Workers are protesting Petrobras's latest profit-sharing offer, which the union contends short-changes workers to the benefit of shareholders. Workers could accept a lower slice of Petrobras's profits if the company also reduced dividends paid to shareholders, Mr. Moraes said.

"The negotiations are very difficult" this year, the union chief added. While FUP has sought out further negotiations with Petrobras and the government, nothing has been scheduled so far, Mr. Moraes said.

Petrobras said that it used the same criteria for its profit-sharing proposal as previous years. "The company remains open to negotiations with labor groups so that all parties may come to an understanding," Petrobras said in an email.

The broader strike would follow a 24-hour "warning" strike held Monday. Workers declined to change shifts at refineries and terminals, while workers at offshore platforms only performed routine duties. The strike did not aim to affect production, union officials said.

That's not the case this time around, Mr. Moraes said. "It's safe to say that production will be affected by a strike lasting five days," Mr. Moraes said.

The last major strike at Petrobras took place in July 2008, when oil workers walked off the job for five days to protest work issues and profit-sharing proposals. The strike cost Petrobras about 63,000 barrels of crude oil production per day.

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Brazil Oil Workers to Vote on Wider Petrobras Strike

RIO DE JANEIRO - Brazilian oil workers will vote to approve a five-day strike at state-run energy company Petroleo Brasileiro, or Petrobras, that would likely interrupt oil production at the company, a union official said Friday.

The strike is tentatively scheduled to start Feb. 20, said Joao Antonio de Moraes, general coordinator for the Brazilian Oil Workers Federation, or FUP. FUP is an umbrella union representing about two-thirds of Petrobras's 80,000 employees.

If approved, the strike would come at a delicate time for Petrobras. Petrobras has struggled with flagging crude-oil production over the past year because of declining recovery rates at mature fields and maintenance shutdowns at ageing offshore platforms. The company's finances have also been stretched because of heavy imports of gasoline and diesel fuel that the company is forced to sell at a loss in the domestic market.

Petrobras reports fourth-quarter earnings results Monday, with year-on-year net profits expected to rise about 20%. The company's full-year profit, however, is expected to be the worst in nearly a decade.

Workers are protesting Petrobras's latest profit-sharing offer, which the union contends short-changes workers to the benefit of shareholders. Workers could accept a lower slice of Petrobras's profits if the company also reduced dividends paid to shareholders, Mr. Moraes said.

"The negotiations are very difficult" this year, the union chief added. While FUP has sought out further negotiations with Petrobras and the government, nothing has been scheduled so far, Mr. Moraes said.

Petrobras said that it used the same criteria for its profit-sharing proposal as previous years. "The company remains open to negotiations with labor groups so that all parties may come to an understanding," Petrobras said in an email.

The broader strike would follow a 24-hour "warning" strike held Monday. Workers declined to change shifts at refineries and terminals, while workers at offshore platforms only performed routine duties. The strike did not aim to affect production, union officials said.

That's not the case this time around, Mr. Moraes said. "It's safe to say that production will be affected by a strike lasting five days," Mr. Moraes said.

The last major strike at Petrobras took place in July 2008, when oil workers walked off the job for five days to protest work issues and profit-sharing proposals. The strike cost Petrobras about 63,000 barrels of crude oil production per day.

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here