2010 Brazil Oil & Gas Seminar - Pre-salt Opportunities & New Regulatory Framework

7/28/2019 2010 Brazil Oil & Gas Seminar - Pre-salt Opportunities & New Regulatory Framework

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20102010 BrazilBrazil OilOil && GasGas SeminarSeminar

Magda Chambriard

DirectorBrazilian Petroleum Agency

PrePre--Salt OpportunitiesSalt Opportunities

&&New Regulatory FrameworkNew Regulatory Framework


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Self-sufficiencyPre-salt discovery

Constitutional Amendment N 9/95

Law n 9.478/97 Creation of ANP & CNPE(National Energy Policy Council)

Implementation of the ANP

Directive CNPE n 8/03

Institutional EvolutionInstitutional Evolution

O&G sectorO&G sector

Pre-salt IM group

20011998 19991995 20032000 20021997 2004 2005 2006

Concession contractssigned with Petrobras

(Round Zero)

GT ~ 60/65%

2007

ANP studies the areas, defines the blocksand promotes the bidding rounds.

ANP studies areas and promotes the

bidding rounds according CNPE approval.

2008 2009

Bill 5.938/2009for the Pre-Salt

areas


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Production

Oil e LGN 2,03 million bbl/day

Gas 57,9 million m3/day

Proven Reserves(*)

Oil ~13 billion bbl

Gas ~366 billion m3

Current scenarioCurrent scenario

(2009)(2009)

(*) without pre-salt discoveries

Imports/Exports Balance

Oil 132,5 thousand bbl/day

Gas 23,5 million m3/day


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Current scenarioCurrent scenario

Concession contractsConcession contracts

38 sedimentary basins38 sedimentary basins

29 principal basins29 principal basins

7,5 million km7,5 million km22

oncess on on rac s:oncess on on rac s:

Exploratory PhaseExploratory Phase377 blocks (JUN/2010)

Production PhaseProduction Phase368 fields

304 operated byPetrobras


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MarlimMarlim FieldField

Marlim Field:

discovered in 1985in 835m water depth

Production(DEC/2008):

Royalties:

R$ 2.15 billion

Special Participation:R$ 4.84 billion

Government Take ~54%(2008)

Proven Reserves(DEC/2008):

1,7 Billion bbl


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The PreThe Pre--Salt as a New ParadigmSalt as a New Paradigm


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PrePre--Salt AreaSalt Area

The study of theThe study of the InterministerialInterministerial GroupGroup

2-ANP-1-RJS

2-ANP-2-RJS

Exploratory Rounds (Rounds)

0123456

79

Fields producing/under development

Pre-Salt Polygon (Bill of Law 5.938/2009)

Oil and GasGas

OilWells being drilled (APR/2010)

Pre-Salt Area

Dry well


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NewNew RegulatoryRegulatory FrameworkFramework

New rules for E&P in the PreNew rules for E&P in the Pre--Salt area:Salt area:Four (04) BillsFour (04) Bills

Production-sharing agreements for E&P in the unlicensed Pre-Salt areas(PL 5.938/09);

Creation of a new state company Pre-Sal (PL 5.939/09);

Formation of a Social Fund (PL 5.940/09);

Onerous assignment of rights, which shall grant Petrobras the right toproduce in certain areas of the Pre-Salt, up to 5 billion boe (PL 5.941/09).


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ObjectiveObjective::

Increase the Brazilian Society benefit on the pre-salt E&P.

Main Rules:Main Rules:

Production Sharing ContractProduction Sharing ContractBill n. 5.938/09Bill n. 5.938/09

Senate approval on 06/10/2010Senate approval on 06/10/2010

General FeaturesGeneral Features

Brazil shall adopt the Production Sharing Contract in the Pre-Salt Area;

Petrobras shall be the only operator in this area with at least 30% participation;

Opportunities in the pre-salt area shall be bidden considering Petrobras as theOperator;

The winner shall be the one who offers the biggest share of oil production to theState;

A New State Company shall run the State share of the contract;

Petrobras can be contracted without a bidding process;

ANP provides the bidding rounds and regulates the contracts.


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PrePre--Salt Social FundSalt Social Fund

Bill n. 5.940/09Bill n. 5.940/09


The Social Fund shall use the resources generated by the production-sharingcontracts in reducing poverty; education; culture; science and technology;environmental sustainability.

The revenue of the Social Fund will come from the sale of profit oil, from thesignature bonus and from the royalties destined to the Federal Government.

Social Fund shall carry out investments in Brazil and abroad in order to diversify the risk andavoid the problems of the Dutch disease

Investments shall follow solidity criteria: liquidity, risk classification and diversification,expected return

Investments in Brazil may be used in infrastructure projects

Financial institutions may be hired to act as operating agents

InvestmentInvestment PolicyPolicy


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The New State CompanyThe New State Company

Bill n. 5.939/09Bill n. 5.939/09

NewNew StateState CompanyCompany

Lower Court approval on 11/18/09

Shall have a qualified technical staff, but shall NOT be an operator;

Participates in the PSC on behalf of the Brazilian Government;

Shall have casting vote, according to the contract.


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Onerous AssignmentOnerous AssignmentBill n. 5.941/09Bill n. 5.941/09

Objective:Objective:

PetrobrasPetrobras capitalizationcapitalization


Authorization to assign to Petrobras the right to explore andproduce oil and gas up to 5 billion boe, in selected areas not yetunder contracts;

Authorization to subscribe and pay in new shares of Petrobras jointstock.


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The decision of drilling wellsThe decision of drilling wells

to increase preto increase pre--salt valuesalt value

Franco2-ANP-1-RJS 2D Seismic Conf Exc Pos

3D Seismic Conf NonExc Pos

3D Seismic Pub Exc Pos

Exclusion Area

TAC Limit (drilling)

Pre-Salt Area (PL 5.938/09)

Exploratory Rounds (Rounds)

0

12

3

4

5

6

7

9

Fields producing/under development

Pre-Salt Polygon (Bill of Law 5.938/2009)

il and GasGas

OilWells being drilled (APR/2010)

2D Seismic Conf NonExc Pos

Libra2-ANP-2-RJS


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2-ANP-1-RJS

The decision of drilling wellsThe decision of drilling wells

to increase preto increase pre--salt valuesalt value

2-ANP-2-RJS

3D structural map of the salt base as interpreted by the ANPtechnical staff (2010)

Franco discoveryFranco discovery(2(2--ANPANP--11--RJS)RJS)

ForecastedForecastedRecoverable VolumeRecoverable Volume

4,5 Bi bbl4,5 Bi bbl


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Brazilian OpportunitiesBrazilian OpportunitiesPrePre--salt Campos & Santos Basinssalt Campos & Santos Basins

(50 billion barrels ?)(50 billion barrels ?)

CamposCampos BasinBasin

Fonte: PETROBRAS, 2009

If proven the way ANP forecasted, Brazil will need toIf proven the way ANP forecasted, Brazil will need toinvest heavily in infrastructure (platforms, pipelines, oilinvest heavily in infrastructure (platforms, pipelines, oil

pipelines, ports, ships, steel, etc.).pipelines, ports, ships, steel, etc.).

In a 1In a 1stst step Brazil considers to hire 40 rigs and semistep Brazil considers to hire 40 rigs and semi--submersible platforms, 234 ships, including 70 largesubmersible platforms, 234 ships, including 70 large

ones (Lima, 2008)ones (Lima, 2008)

SantosSantos BasinBasin


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Brazilian OpportunitiesBrazilian Opportunities

New Bidding RoundsNew Bidding Rounds

After the approval of theAfter the approval of thePrePre--salt bills ANP shall bid:salt bills ANP shall bid:

PrePre--salt areas under PSCsalt areas under PSC(~ 2,3% sedimentary area)(~ 2,3% sedimentary area)

Other areas underOther areas under

(> 97% sedimentary area(> 97% sedimentary area))

ANP waits forANP waits for CNPECNPEapproval the 11th Bidapproval the 11th Bid

Round;Round;

The 11The 11th Bid Round shallth Bid Round shallfocus on the Brazilianfocus on the Brazilian

equatorial margin.equatorial margin.


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FinalFinal RemarksRemarks

The PreThe Pre--Salt is a new paradigm in Brazil;Salt is a new paradigm in Brazil;

ProductionProduction--sharing contracts shall be applied for the Presharing contracts shall be applied for the Pre--Salt areaSalt area(around 2% of the Brazilian sedimentary area);(around 2% of the Brazilian sedimentary area);

Concession contracts shall be applied for ALL other areas (> 97%);Concession contracts shall be applied for ALL other areas (> 97%);

ANP waits for CNPE approval to promote the 11 bidANP waits for CNPE approval to promote the 11 bid--round focusing theround focusing theequatorial margin;equatorial margin;

And to promote a bid round focusing preAnd to promote a bid round focusing pre--salt opportunities;salt opportunities;

In Brazil, opportunities go far beyond the preIn Brazil, opportunities go far beyond the pre--saltsalt..


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Agncia Nacional do Petrleo, Gs Natural eAgncia Nacional do Petrleo, Gs Natural e

BiocombustveisBiocombustveis

Av. Rio Branco, 65Av. Rio Branco, 65

tel. 21 2112tel. 21 2112--81008100

www.anp.gov.br


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100

120

140

160

(U$)

Oil Price EvolutionOil Price Evolution

0

20

40

60

80

1990 1995 2000 2005 2006 2007 2008 (JUL) 2008(DEZ)

2009

OilBarrelPr

ice

YEAR


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Govern Take Evolution (2002 2007)

Govern Take around the worldGovern Take around the world

Brazil 60% GT

0% 10% 20% 30% 40% 50% 60% 70%

Brasil

2010 Brazil Oil & Gas Seminar - Pre-salt Opportunities & New Regulatory Framework

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