Opportunities in the Brazilian Oil & Gas Industry · Current RF Final RF. Onshore Goal: to...
Transcript of Opportunities in the Brazilian Oil & Gas Industry · Current RF Final RF. Onshore Goal: to...
Opportunities in the Brazilian Oil &
Gas Industry
Dirceu Amorelli
Director
J u n e 1 2 t h , 2 0 1 9
NOTICE
• The ANP´s institutional presentation is based on currentand reliable information, but no representation orwarranty is made as to its accurateness andcompleteness, and it should not be relied upon as such.
• Projections and estimated values are included withoutany guarantee as to their future realization.
• Forward-looking data, information, projections andopinions expressed during the presentation are subjectto change without prior notice.
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Open Acreage Process.
02
Upcoming Licensing Rounds
03
Conclusions
04
Outline
Oil and Gas Scenario
Improvements
Opportunities
Final Remarks
Oil and Gas Scenario
Final Remarks
Improvements
Rounds
01
02
03
04
Outline
OnshoreConventional
Offshore Onshore Pre-SaltConventional
Offshore
Pre-SaltPolygon
5.0 million km2 – onshore
2.5 million km2 – offshore
7.5 million km2
Concession
• 424 fields
• 322 blocks
Production Sharing
• 4 fields
• 7 blocks
Three different E&P environments
Less than 5%of the sedimentary areas are
contracted
97 Groups
• 47 Brazilian
• 50 foreign
Goal: to attract the right players for each environment
Pre-salt Conventional Offshore Onshore
Supported by oilfield service companies, suppliers and financial institutions
The right players
Home to the largest offshore oil
discoveries in the last decade
The next bidding rounds will offer blocks with
potential for giant discoveries in the pre-salt
Proved reserves
~8 billion barrels of oil
Pre
-Sal
t p
rod
uct
ion
gro
ws
shar
ply
in t
he
sho
rt t
erm
Conventional Offshore
Goal: to increase
explorationactivities in the East
and Equatorial
Margins.
Current RF
Final RF
Onshore
Goal: to revitalize activities in onshore fields, by attracting
mature field players
Brazil has potential to significantly increase its onshore
production in short/medium term
Oil
Gas
Onshore Production (2018)
111Thousand bbl/d
22Million m³/d
Production Perspective
In 2018, 67,000 wells were drilled onshore
around the world
Only 128 wells were drilled onshore in
Brazil
0
500000
1000000
1500000
2000000
2500000
3000000
Bar
rels
of
Oil
per
day
Average Production
Brazil Pre-Salt Post-Salt Offshore Onshore
34%
Production
3.3 Million
Pre-Salt
57%
Conventional Offshore
38%
Onshore
4%
Oil
2.59 Million bpd
Gas
109 Million m³/d
boe/d
April, 2019
9th largest producer in the world in 2018
The largest producer of crude oil in the whole South American regionApril, 2019
190%(2014/2018)
(2014/2018)
34%(2014/2018)
15%(2014/2018)
Proven
Reserves
15 Billion
Oil
13.2 Billion bbl
Gas
368Billion m³
December, 2018
boe
4%
28%
68%
Oil Proven Reserves
Onshore Conventional Offshore Pre-salt
19%
29%
52%
Gas Proven Reserves
Onshore Conventional Offshore Pre-salt
Production Scenario: need to attract investmentsMaximize Recovery Factor
Campos Basin
Current O&G Recovery Factor 14%
Final O&G Recovery Factor 23%
Brazil World
Final O&G Recovery Factor 21% Average Final O&G Recovery Factor 35%
1% addiction in Campos Basin:970Mboe (New Reserves)
1% addiction in onshore:200Mboe (New Reserves)
Final Remarks
Rounds
Improvements
01 Oil and Gas Scenario
02
03
04
Outline
Policymaking
Regulation and Policy implementation
PRESIDENT OF THE REPUBLIC
National Energy Policy Council - CNPE
Brazilian Oil & Gas System Structure
02
New Laws for
E&P
From 2016 up to today
48
New CNPE
Resolutions for
E&P
Law 13,365/2016
Petrobras is no longer
required to be the sole
operator of Pre-Salt.
The change allows Petrobras
to decide to act as an
operator and hold a
minimum of 30% (thirty
percent) in the consortia
formed to operate blocks in
the PS regime.
Optional Operation
Nov/2016 – Law 13,365
New Operators in PS regime
Extended the special tax regime for exploration,
development and production of oil and natural gas
Repetro Extension –Fiscal Regime
Dec/2017 – Law 13,586
Improvements in the Energy Policy
CNPE Resolutions 10/2017
and 10/2018
Established guidelines for
multi-year planning of E&P
Bidding Rounds up to 2021
Bidding PlanningCNPE Resolution 17/2017
ANP Ordinance 749
Royalties reduction, up to 5% (five
percent), on incremental
production resulted by new
investment plan to be
implemented, in order to promote
life extension and maximize field’s
recovery factor
Royalties ReductionCNPE Resolutions 04 and
08/2017
It allows the extension of the
Exploration Phase, considering not
only the contractual clauses, but
also the greater objective of
national interest and the
preservation of investments in the
Country.
ExploratoryPhase Extension
CNPE Resolution 2/2016
Established the guidelines for the
concession contracts extensions
The Concessionaire may apply for
extension upon submission of a
request to ANP, together with a
reviewed Development Plan
Contract Extension
CNPE Resolution 1/2018
ANP Ordinance 726
Established the guidelines for the
concession contracts extensions
The Concessionaire may apply for
extension upon submission of a
request to ANP, together with a
reviewed Development Plan
Local Content
ANP Ordinance 785/2019
Farm-in and Farm-out Process
and Reserve Based Lending
Assignment of Agreements and RBL
CNPE Resolution 17/2017
The ANP may conduct permanent
offers of fields or blocks returned
to the Union or offered in past
bidding rounds but not awarded
Open Acreage
CNPE Resolution 2/2016
Established the guidelines
for the concession contracts
extensions
The Concessionaire may
apply for extension upon
submission of a request to
ANP, together with a
reviewed Development Plan
Contract Extension
9 extensions approved
56 currently in analysis
and
Offshorei. Marlim;ii. Marlim Leste;iii. Marlim Sul;iv. Frade;v. Voador;vi. Ubarana.
~ US$ 18 Bi
Onshorei. Fazenda Alegre;ii. Araçás;iii. Canto do Amaro.
~ US$ 945 MM
Offshorei. 12
Onshorei. 44
Exploratory Phase Extension
Several concessionaires operating in Brazil, mainly in blocksrelated to the 11th and 12th Bidding Rounds, due to difficultiesrelated to environmental licensing and deficient logistics in someof the offered Basins, have requested ANP to extend of theexploratory phase to carry out the minimum exploratoryprogram.
The ANP Ordinance allows the extension of the ExplorationPhase for a period of two (2) years
40 Extensions Approved
Out/2017 –ANP Ordinance 708
2017
2018
2019
Predictability for the Oil Market
2020
2021
Brazil16ª Round 6
Brazil14ª Round
7Brazil17ª Round
Brazil18ª Round 8
Bidding Planning
To be confirmed:
Royalties Reduction
CNPE Resolution 17/2017
Royalties reduction, up to 5% (five
percent), on incremental production
resulted by new investment plan to
be implemented, in order to
promote life extension and
maximize field’s recovery factor.
Set/2018 –ANP Ordinance 749
Royalties Reduction up to 5% on Incremental Production
in Mature Fields. What is Mature??
25 years of ProductionProduction Cumulative ≥70% of
estimated recovery considering 1P reserves
OR
241Number of Eligible Fields:
53% of Brazilian Fields
54% of Campos Basin Fields
Royalties Reduction up to 5% on Incremental Production in Mature
Fields.
Promote Field Life Extension
Maximize Recovery Factor
Increase project Profitability
More Jobs and Income
Increase Mature Fieldsattractiveness
10% Royalties
7,5 or 5% Royalties
HistoricalComplementary
Project
Royalties Reduction
40 cases under evaluation
Open Acreage
Continuous offer of blocks and mature fields
Single registration
Single participation rate with reduced value
Complete technical data package will be optional
Reduction of the financial guarantee for the Minimum Exploratory Program– 30% of the total amount
Reduced signature bonus for mature basins (R$ 50,000)
Open Acreage
Objective
Extend knowledge of the basins and
reserves
Increase the numbers ofservices companies
Decentralize exploratory
investment in the country
Increase the number of O&G players
Bring opportunities to companies of different profiles and
sizes
Technicaland
EconomicalParameters
Companiesstudies
Enrollment
Declarationof interest
Disclosure ofna interest
and thebidding
schedule
Deadline for new
enrollments
Offersubmition
(public session)
Open Acreage Cycles
Awarded Blocks
Qualification andBidding Homologation
Signuture of thecontract
CNPE Resolution 01
It defines guidelines for the
ANP to evaluate the
possibility of adopting Local
Content requirements
distinct from those
established in the signed
Contracts
New LC Policy
Mar/2018 –CNPE Resolutions 01
This Resolution establishes the criteria, requirements andprocedures applicable to the reduction or even the exemption ofthe Local Content obligation, as well as the general rules ofcompromised percentage adjustments and surplus transfers.
It gives operators the possibility of making a contractualamendment.
233 Contractual Amendments Signed
285 cases under evaluation
Mar/2018 –ANP Ordinance 726
The rights arising from the E & P contracts,
including the contractual
position, may be given as
guarantee as long as there is no risk to fulfill the contractual
obligations,
Rules offering legal certainty and predictability as regards the creation,
improvement and enforcement of guarantees.
It does not require prior notification or consent of the ANP,
but the standard indicates clauses that are prohibited in the
instruments
Clarity about the role of the ANP in the
analysis of contracts and their effects.
Expectation that this modality
mainly facilitates the sale of
mature fields, contributing to the increase of
investments and the recovery
factor of production in
Brazil.
Assignment of Agreements and Reserve Based Lending
Final Remarks
Opportunities
Improvements
01 Oil and Gas Scenario
02
03
04
Outline
What´s up for 2019?
2019
2020
ANP Ordinance Update:
Descomissioning(public consultation)
Petrobras Divestment Plan
(Topázio and Ártico Projects):
first farm-ins/farm-outs
Approvals
May/2019
Jul/2019
2ndS/2019
2ndS/2019
2ndS/2019
New ANP Ordinance:
Assignment of
Agreements and
Reserve Based Lending(publication)
New Areas(publication)
Bidding Rounds Calendar
Open AcreagePetrobras Divestment Plan
Unique E&P Opportunity
Improvements in the energy policy, resolutions and contracts
Variety of opportunities to attract the right players
Open Acreage
600
(approved)
+1.139
Blocks
+14Marginal
fields
20Sedimentary
basins
527 approved blocks in 8 onshore basins
73 approved blocks in 5 offshore basins
Blocks not awarded in the 15th Bidding Round are
included
A set of blocks are
being offered in the
neighborhood of assets under
Petrobras´ divestment
plan
GOAL
16th Bidding Round
SANTOS
Minimum Bonuses vary from:
$ 375 M up to 325 MM
12 blocks in New Frontier
24 blocks in High Potential
Basin
36Blocks
Camamu, Jacuípe, Pernambuco,
Campos and Santos.
5Basins
Estimated unrisked oil in place
volume (P50)
111 Bbbl
16th Bidding Round
SANTOSCAMPOS
Minimum Bonuses vary from:
$ 375 M up to 325 MM
12 blocks in New Frontier
24 blocks in High Potential
Basin
36Blocks
Camamu, Jacuípe, Pernambuco,
Campos and Santos.
5Basins
Estimated unrisked oil in place
volume (P50)
111 Bbbl
16th Bidding Round
SANTOSCAMPOS
Camamu-Almada
Minimum Bonuses vary from:
$ 375 M up to 325 MM
12 blocks in New Frontier
24 blocks in High Potential
Basin
36Blocks
Camamu, Jacuípe, Pernambuco,
Campos and Santos.
5Basins
Estimated unrisked oil in place
volume (P50)
111 Bbbl
16th Bidding Round
SANTOSCAMPOS
Camamu-Almada
Minimum Bonuses vary from:
$ 375 M up to 325 MM
12 blocks in New Frontier
24 blocks in High Potential
Basin
36Blocks
Camamu, Jacuípe, Pernambuco,
Campos and Santos.
5Basins
Estimated unrisked oil in place
volume (P50)
111 Bbbl
16th Bidding Round
SANTOSCAMPOS
Camamu-Almada
Minimum Bonuses vary from:
$ 375 M up to 325 MM
12 blocks in New Frontier
24 blocks in High Potential
Basin
36Blocks
Camamu, Jacuípe, Pernambuco,
Campos and Santos.
5Basins
Estimated unrisked oil in place
volume (P50)
111 Bbbl
6th Pre-salt Bidding Round
Estimated unrisked oil in place
volume
42 Bbbl
Pre-Salt Play
5Blocks
Potential for a large oil discovery
Bonuses vary from:
$ 125 MM up to 1,2 B
Minimum Profit Oil vary from:
22,87% up to 36,98%
183 Fields92% Mature Fields
4625%
13775%
Petrobras Divestment Plan
Offshore Fields(44 are mature)
3270%
1430%
Underproduction
12188%
1612%
Onshore Fields(125 are mature)
Underproduction
Unique Opportunity to revitalize activities in
onshore and shallow water fields, by attracting
mature field players and…
Brazil has potential to significantly
increase its onshore and shallow water
production in short/medium term
~30%
(2012/2018)
0% 10% 20% 30% 40%
SEAL
Espírito Santo
Recôncavo
Potiguar
Onshore Recovery Factor per basin
Current RF Final RF
Petrobras Divestment Plan
Development drilling has declined
75% in the last 5 years~75%(2015/2017)
The production has declined 30% in
the last 5 years
(2012/2018)
0% 10% 20% 30% 40%
SEAL
Espírito Santo
Camamu
Campos
Santos
Potiguar/Ceará
Offshore Recovery Factor per basin
New Reserves
Current RF Final RF
Increase production and the recoveryfactor of the mature basins (specially in Campos
basin).
Rounds
Improvements
Oil and Gas Scenario01
02
03
Conclusions
04
Outline
Final Remarks
Potential investments and forecast production
The pre-salt region has the potential to
contribute with the largest non-OPEC
production growth in the decade to come.
Brazilian Oil Production Forecast (MM boe/d)
11New platforms
The greatest transformation in the Brazilian E&P sector, completing the opening which started in 1997
Diverse and Competitive E&P Market
Petrobras
divestment plan
Bidding round
schedule and
open acreage
Need of
additional service
companies
Improvements in
the energy policy
O&G scenario in 2019
Unique E&P opportunity:
- immediate reserves certification
- fast production development
- reserves and production growth
Development of a diverse and
competitive supply chain and
services market
National Agency for Petroleum, Natural Gas andBiofuels – ANP
Av. Rio Branco, 65, 21st floorRio de Janeiro – Brazil
Phone: +55 (21) 2112-8100
Additional Information:
www.anp.gov.br