By PPSA
May 27, 2024
This is a machine translation of a press release originally published in Portuguese.
Presal Petroleum Company (PPSA) will sell 33 million barrels of oil in the 4th Union oil auction, which will be held on July 31 at the B3 headquarters in São Paulo. The company published the auction notice and the main information about the event in the Union's Official Gazette this Monday, the 27th. The auction will sell the entire production estimated to be produced in Union from Campos de Mello and Búzios in 2025.
The fields are the federation's main oil producers and the auction is expected to bring in more than 13 billion reais for the federal government, according to Director of Administration, Finance and Marketing Samir Awad. The funds are expected to be received throughout 2025 and can fluctuate depending on the price of the barrel, the value offered at the auction and the exchange rate. “We have presented the auction opportunity to the market and we have seen a lot of interest,” he said.
According to Technical Director and Interim President Tabita Loureiro, this will be the first auction in the auction calendar, which is currently under discussion with the Ministry of Mines and Energy. “We already plan to hold a new tender in April 2025 to commercialize the coalition's production scheduled for 2026 in the Melo, Búzios and Bacalhau fields. We are also considering other auctions to sell cargoes for 2027 and 2028. The coalition's production is increasing and we need to provide predictability to the market to deliver maximum results for Brazilian society,” Tabita explained.
For Mines and Energy Minister Alexandre Silveira, the EU's oil and gas resources are essential to ensure investments in health, education and the energy transition through social funds.
Four lots of oil will be auctioned separately in July: three from Mero (two with an estimated 10 million barrels each and one with an estimated 10.5 million barrels each) and one from Búzios (estimated 2.5 million barrels). This equates to about 66 cargoes of 500,000 barrels each being delivered in 2025. They will be available for FPSOs Guanabara, Sepetiba, Duque de Caxias and Pioneiro de Libra in Mero, and P-74, P-75, P-76, P-77 and Almirante Barroso in Búzios.
Companies can participate in the auction either individually or in consortia. Depending on the format, companies in oil exploration and production, marketing, logistics and refining may be eligible to participate. Foreign companies may join but not lead consortia.
Auction Trends
The open session will take place in two phases for each lot put up for auction, with the company offering the highest price being the winner. In the first phase, the price must be higher than the minimum price limit in US dollars per barrel that the PPSA plans to set two days before the auction. “Our mission is to maximize the outcome for the EU, therefore, in the first phase, we will establish a minimum price value based on dated Brent. The proposal from the second-placed bidder exceeding US$0.40/barrel will be declared the winner of the lot, and price proposals that differ from each other by up to US$0.40/barrel will be a condition for holding an open auction in which the companies that submitted proposals during this period will participate,” explained Guilherme França, PPSA Head of Marketing.
If no offers are made above the initial price level mentioned above, a second phase of the session, a loser round, will be held based on the new minimum price level announced at that time, and a live auction will begin in which all eligible companies will participate.
The notice is available on the PPSA website and the auction committee will answer questions sent by email to leilao4@ppsa.gov.br by 10 June.
Access the notice: https://www.presalpetroleo.gov.br/4o-leilao/
