Brazil Sees $870 Million in Exploration Spending From Auction

Oil companies are expected to invest about $870M to complete minimum exploration work at concessions Brazil plans to auction in October, according to the country's oil regulator.

(Bloomberg) -- Oil companies are expected to invest about 2.8 billion reais ($870 million) to complete minimum exploration work at concessions Brazil plans to auction in October, according to the country’s oil regulator.

Signing bonuses for the offshore and onshore blocks should reach 979 million reais, Marcelo Castilho, the bidding superintendent at Brazil’s oil regulator, known as ANP, said Thursday at a seminar in Rio de Janeiro.

Brazil will offer 266 blocks - 182 onshore and 84 offshore - in what will be the country’s 13th round. Brazil slowed the pace of oil auctions almost a decade ago after it discovered giant deposits in the so-called pre-salt region in deep waters, and overhauled the country’s oil legislation to increase the government’s control of the resources. Oil production growth in Latin America’s largest economy has fallen short of forecasts.

The regulator expects large and small producers to compete for acreage, which ranges from basins on land near natural gas discoveries to deep-water regions where single exploration wells can cost more than $100 million.

To contact the reporter on this story: Sabrina Valle in Rio de Janeiro at svalle@bloomberg.net To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net Peter Millard

MUST READ

On The Brink: Upstream Companies Increasingly Vulnerable To Collapse

-Deon Daugherty

Rig Trends: Eastern Canada Rig Market Changing

-Terry Childs

Top Social Media Dos and Don'ts When Looking for a Job

-Valerie Jones