Brazil's ANP Sets Signature Bonus for Libra at a Minimum of $7b

Brazil's National Agency of Petroleum, Natural Gas and Biofuels (ANP) announced at a road show in Singapore to promote the country's first pre-salt bidding round that the signature bonus for the Libra prospect in the Santos Basin is expected be at least $7 billion (BRL 15 billion), said ANP Director General Magda Chambriard.

ANP is auctioning the Libra prospect as a production sharing contract (PSC), with bid submissions set for Oct 21 followed by contract signing in November. Brazil's state-owned Petroleo Brasileiro SA will automatically be the operator with at a minumum of 30 percent participation in the winning bid.

Libra, with oil reserves estimated at 8 to 12 billion barrels, "was much bigger than previously thought," Chambriard said. Peak oil production from Libra is forecast to reach 1 million barrels per day, or nearly half of Brazil's current output of 2.2 million barrels per day. Oil supplies from Libra will help Brazil reached its export target of 1.5 million barrels per day in 10 years' time.

The contractural term for the PSC is 35 years, while the exploratory phase is 4 years. The minimum government take for Libra is set at 75 percent.

Under the auction, the successful bidder will have to conduct 597 square miles (1,547 square kilometers) of 3D seismic and drill 2 wells.

Huge investments are required to develop the Libra prospect and 12-18 big size platforms may be needed during the project's lifespan of 35 years, Chambriard said. ANP requires local content to account for 37 percent in the exploration phase, rising to 55 percent in the development phase before 2021 and 59 percent thereafter.

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