PPSA could raise over BRL 500 billion with the commercialization of the Government's oil and gas shares in 19 production sharing agreements and in the production unitization agreements for Mero, Atapu, and Tupi over the next decade. The estimate is part of the study “Production estimate of production-sharing agreements and revenue for public coffers for the 2025-2034 Period,” prepared by PPSA and presented this Thursday at the company's annual Technical Forum by Acting President, Tabita Loureiro. According to Tabita, considering the values to be paid with royalties and taxes, the total revenue for public coffers from these agreements could exceed BRL 1 trillion.

The study prepared by PPSA presents three scenarios for the Government's results over the next ten years: Pessimistic, Most Likely, and Optimistic, with variations in oil and gas prices, exchange rates, and the entry of platforms into production, among other variables. The estimate of BRL 500 billion is based on the Most Likely scenario, with a price of USD 70 per barrel and an exchange rate of BRL 5.43, considered a conservative scenario. According to Tabita, regardless of the chosen scenario, all point to an increase in production.

“The Government's oil production has just reached the mark of one hundred thousand barrels per day (bpd) in October, which places us, for the first time, as the fifth-largest national producer. In this study, if we consider the Most Likely scenario, the Government's production reaches its peak in 2030, with 543 thousand bpd. In the Optimistic scenario, it reaches 583 thousand bpd. This will completely change the volumes of oil commercialization for the Government,” he explained.

Tabita emphasized, however, that although the projections are promising, the numbers presented last year for the 2024-2033 period estimated an even greater increase. “In the previous study, the Government's production peak would be reached one year earlier, in 2029, with 564 thousand barrels per day.The delay and the smaller volume are explained by the postponement of platform production start-ups in some fields, the deferral of scheduled well drilling, and the increase in costs for some projects, which impact the cost recovery in oil. The market has been struggling with contractual adjustments in the construction and assembly of FPSOs, higher daily rates for drilling rigs, and a general increase in investment costs in subsea agreements,” she said.

Considering the Most Likely scenario, it is estimated that from 2025 to 2034, the production-sharing agreements will have a cumulative production of 6.6 billion barrels of oil. Of this total, the Government's accumulated share will be 1.4 billion barrels.

Natural Gas

As with oil, three scenarios were outlined for the Government's natural gas production available for export in the production-sharing agreements and in the unitization agreements. Even considering the estimates of the Pessimistic scenario, production is expected to increase from the current 255 thousand m³/day to 3.3 million m³/day in 2031. In the Optimistic scenario, it reaches 3.5 million m³/day in 2031, remaining above the three million range for five consecutive years. It is worth mentioning that these estimates do not take into account the yield factor of the UPGNs (Natural Gas Processing Unit), meaning that a portion of this gas will be converted into LPG (Liquefied Petroleum Gas) and liquids.

Considering the Most Likely scenario, it is estimated that from 2025 to 2034, the agreements will have a cumulative production of 48.5 billion m³ of natural gas. Of this total, the Government's accumulated share will be 7.7 billion m³.

Investments

In addition to the amounts raised for the Government, the investments are also significant: USD 53 billion between 2025 and 2029, allocated to the commercial production sharing agreements.

Environment

The study also presents, for the first time, a framework with the Greenhouse Gas (GHG) emissions from the production sharing agreements and the AIP of Tupi, projects with the Government's participation. According to Tabita, the average carbon intensity of these agreements was 10.85 kgCO2e/boe, while the OGCI (Oil and Gas Climate Initiative) reference, the global average, is around 18 kgCO2e/boe.

Access here the full presentation.

Live stream: https://www.youtube.com/@agenciaeixos
Access the schedule: https://www.presalpetroleo.gov.br/forum-2024/

The company also plans to hold its 1st gas auction next year

PPSA estimates the sale of 78 million barrels of oil from the Government on June 25 of next year at B3 in São Paulo. The announcement was made this Thursday (5) by the company's Commercialization Superintendent, Guilherme França, during the PPSA Technical Forum, held at Prodigy Santos Dumont. According to França, the 5th Oil Auction of the Government will sell the production of the Government from the Mero, Búzios, Sépia, Itapu, and Norte de Carcará fields.

França also announced that the 1st Natural Gas Auction of the Government is scheduled to take place in the fourth quarter of 2025. “We are currently analyzing the hiring of the Integrated Offloading System (SIE) and the Integrated Processing System (SIP), which are necessary for the execution of the bidding process. These are complex agreements, and we are even evaluating the possibility of signing the agreement and making an assignment of rights in the processing. Whatever is more attractive for the Government,” he explained.

According to him, the estimate is that the Government will have up to 1.3 million cubic meters of natural gas available to offer to the market by 2027. These estimates do not take into account the yield factor of the UPGNs (Natural Gas Processing Unit), meaning that a portion of this gas will be converted into LPG (Liquefied Petroleum Gas) and liquids. The production is related to the sharing agreements for Búzios, Sapinhoá, Sépia, and Atapu, in addition to the Government's participation with non-contracted areas in the production unitization agreements for Tupi and Atapu.

Regarding the public notice for the 5th Oil Auction, França stated that the publication is expected to occur in March 2025. The largest volume of shipments will come from the Mero Field: 51.5 million barrels to be marketed over 12 months. The second-largest lot is from the Norte de Carcará field. The field is scheduled to start production in 2025, and the auction will commercialize 12 million barrels of the Government's production over 18 months. The Itapu (6.5 million) and Sépia (4.5 million) lots will also be for 18 months, while the Búzios (3.5 million) lots will be for 12 months.

The volumes are current estimates of the Government's share of oil in 2025 and 2026 in these fields and may be revised until the publication of the public notice for a more refined projection. When winning a lot, the buyer will have all the named cargoes available starting from July 2025 or January 2026, according to the agreement, even if the total amount is greater or less than the volume specified in the public notice. The cargoes marketed in the 4th Government Oil Auction for the year 2025 are not part of these volumes.

Access here the full presentation.

Live stream: https://www.youtube.com/@agenciaeixos
Access the schedule: https://www.presalpetroleo.gov.br/forum-2024/

Petrobras and PetroChina were the winners of the spot sale process promoted by PPSA (Pré-Sal Petróleo S.A.) on Wednesday, 10/30, to commercialize five oil cargoes from the Government of the Sépia field, with an estimated volume of 2.5 million barrels. Six companies have registered for the competitive bidding process.

The sale was divided into two lots: the first with a load of 500 thousand barrels and an estimated loading date in December 2024, which was won by PetroChina; and the second, with an estimated 2 million barrels and an expected loading between January and April of the following year, won by Petrobras. Since 2022, four other Sépia cargoes have already been sold to Galp, CNOOC, and Petrobras.

The price offers were opened in real-time during a meeting attended by representatives of the companies that submitted written proposals. PPSA will publish the sale price of the cargo on its website 15 days after loading.

The Marechal Duque de Caxias FPSO began producing oil and gas on Wednesday, 10/30, in the Mero field, Libra block, in the pre-salt of the Santos Basin. The platform has a production capacity of up to 180 thousand barrels of oil per day and a processing capacity of 12 million m3 of gas. PPSA (Pré-sal Petróleo S.A.) is the representative of the Government in the non-contracted area and the manager of the production sharing agreement for Mero, a field that will produce 590 thousand barrels of oil per day when the Marechal Duque de Caxias reaches its full capacity.

“The start of production at Marechal Duque de Caxias represents an important step for the growth of production in the Mero field, which is already the main oil producer for the Government. This FPSO also comes with decarbonization technologies and will use, for the first time, HISEP, bringing yet another innovation to pre-salt production,” said Evamar José dos Santos, Director of Agreement Management at PPSA.

The HISEP technology separates oil and gas at the bottom of the ocean, from where it will reinject the CO2-rich gas into the reservoir. Thus, in addition to enabling increased oil recovery, it is expected to also contribute to the reduction of greenhouse gas emissions intensity into the atmosphere.

In total, the FPSO will have 15 wells, 8 oil producers, and 7 water and gas injectors, interconnected to the platform via subsea infrastructure.

Mero unitized field operations are conducted by the consortium operated by Petrobras (38.6%), in partnership with Shell Brasil (19.3%), TotalEnergies (19.3%), CNODC (9.65%), CNPC (9.65%) and Pré-Sal Petróleo S.A (PPSA) (3.5%), as representative of the Government in the non-contracted area.

PPSA (Pré-sal Petróleo S/A) was present at ROG.e 2024, the largest Oil and Gas fair in Latin America, and hosted hundreds of visitors at its booth, which featured a series of interactive activities and technical lectures throughout the four-day event. The booth attracted more than 250 people to discussions on the pre-salt, covering topics such as the management of sharing agreements, the commercialization of the Government's oil and gas, cost recognition, and the decarbonization of operations in the pre-salt.

The Acting President and Technical Director of PPSA, Tabita Loureiro, took part in key moments of the event's official program, including the panel “Perspectives on Increasing Domestic Natural Gas Supply” and the panel “Exploring New Frontiers: The Future of the Subsea Market in Brazil,” organized by Subsea 7. On these occasions, Tabita and other key leaders in the sector discussed technological innovations and the future of natural gas production and subsea operations in Brazil.

Another highlight for PPSA was the presentation of the paper “10 years of production-sharing in Brazil: results and opportunities” at the event's poster session, represented by Cláudio Kuyven. The paper, co-authored by Carlos Eduardo Cardoso, Júlio Gontijo, and Ricardo Loureiro, generated public interest by discussing the results achieved under the production-sharing regime over the past decade.

In addition, PPSA's participation was marked by strategic meetings with executives from the Energy, Oil, and Gas sector, such as representatives from ANP, Galp, and Qatar Energy, consolidating partnerships and opening new avenues for cooperation.

ROG.e 2024 was an excellent showcase for PPSA, which connected with a large audience and reaffirmed its prominent role in managing production-sharing agreements and the commercialization of the Government's oil and gas shares, always seeking innovation and continuous improvement to achieve the best results.

Watch the video about PPSA's participation in the fair here.

Petrobras, Galp, and Acelen (Mataripe Refinery) were the winners of the spot sale process conducted by PPSA (Pré-Sal Petróleo S.A) on Wednesday, the 18th, to sell 3 oil cargoes from the Government’s Sépia, Atapu, and Itapu fields, respectively, with a total volume of 1.5 million barrels. The process also included the participation of PetroChina and Shell.

The first cargo auctioned was from Sépia, with 500 thousand barrels, and the process was won by Petrobras. Since 2022, three other Sépia cargoes have already been sold to Galp, Petrobras, and CNOOC, respectively. The second cargo auctioned on Wednesday was from Atapu, with 500 thousand barrels, and the process was won by Galp. Since 2022, three other Atapu cargoes have already been sold to Galp, Equinor, and Acelen (Mataripe Refinery), respectively.

The last cargo auctioned was from Itapu, with 500 thousand barrels, and the process was won by Acelen (Mataripe Refinery). This was the first time that the Government's oil from the Itapu field was sold.

The price offers were opened in real-time during a meeting attended by representatives from all participating companies. PPSA will publish the sale price of the cargo on its website 15 days after loading.

Lecture on commercialization

 The next steps for the commercialization of the Government's oil and gas will be presented at the PPSA booth at ROG.e. on September 23 at 3:00 p.m. by the company's Commercialization Superintendent, Guilherme França. Participation will be on a first-come, first-served basis, subject to space availability. During ROG.e, a total of 12 presentations will be given on PPSA's operations in the pre-salt fields. The topics include agreement management, pre-salt exploration, cost recognition, decarbonization of operations, and the legal framework for sharing and exploration in the pre-salt fields. After the presentations, the technicians will be available at the booth to address questions and exchange knowledge on the production-sharing regime.

Check here the PPSA schedule at ROG!

The Director of Administration, Finance, and Commercialization of PPSA (Pré-sal Petróleo S.A.), Samir Awad, announced this Tuesday (17) at the workshop “Natural Gas: Measures for a Competitive Market” that the company is considering holding an auction in 2025 to offer the Government’s natural gas at the exit point in the SIP (Integrated Processing System). In this way, the Government’s natural gas could be marketed directly to market agents, increasing competition. Currently, PPSA sells the Government's natural gas at the wellhead, and according to Awad, with this new initiative, the expectation is to increase profitability for the Government.

“Initially, we thought about starting to market the Government's natural gas at the exit of the SIE (Integrated Evacuation System) to sell the shared gas at the system’s exit. However, with the new CNPE resolution, we created a task force at PPSA to already study the SIP agreement. The goal is to be able to offer this gas in an open, public, and competitive bid as early as next year. We believe this is the best way to fulfill our legal obligation to maximize economic results for the Government,” he said at the event organized by the National Confederation of Industry (CNI).

In his presentation, Awad presented the expected growth curve for the Government’s natural gas. According to him, by the end of this decade, the production-sharing agreements managed by PPSA will reach their production peak, with 3 million m³ per day.

The panel was moderated by Rennaly Sousa, Specialist in Policies and Industry at CNI, and featured the participation of Marcello Weydt, Director of the Natural Gas Department at the Ministry of Mines and Energy, Adrianno Lorenzon, Director of Natural Gas at Abrace Energia, and Sylvie D’Apote, Executive Director of Natural Gas at IBP. The event, which took place online, discussed the key measures of the new CNPE resolution, which establishes additional guidelines for the Government’s oil and natural gas marketing policy.

Check the presentation here.

On Tuesday (9/2), a decree from President Luiz Inácio Lula da Silva was published in the Official Federal Gazette, outlining the guidelines of the National Energy Transition Plan. The text defines concepts that will guide the actions of Pré-Sal Petróleo (PPSA) and other companies in the energy sector.

According to the decree, PPSA and ANP will be responsible for analyzing the best development options in the production-sharing agreements. For this, the reduction of carbon intensity throughout the asset’s life cycle and the adoption of mitigating measures for greenhouse gas emissions must be considered. In this scenario, companies must promote broad transparency regarding the emission indicators of oil and natural gas exploration and production projects.

PPSA will also be responsible for supporting the Energy Research Company (EPE) in adopting measures to encourage the decarbonization of oil and natural gas exploration and production activities, presenting to the National Energy Policy Council (CNPE) a study on decarbonization scenarios and the impacts associated with the proposed measures.

The resolution has been in effect since its publication.

Pré-Sal Petróleo (PPSA) joined on Wednesday, February 4, the Pact for Diversity, Equity, and Inclusion in Federal State-Owned Companies, signed between the Ministry of Management and Innovation in Public Services (MGI) and 34 public companies, at Petrobras’s auditorium in Brasília (Federal District). The pact signed between the state-owned companies proposes the establishment of cooperation mechanisms for the improvement of public policies related to the topic and strategies that promote diversity within the companies.

According to the Technical Director and acting President of PPSA, Tabita Loureiro, the company is committed to ensuring an inclusive, diverse, and representative work environment. “We will hold a public competition soon and will launch a campaign to increase the diversity at PPSA. We want to attract more women to increase the workforce at PPSA. Similarly, we aim to increase racial diversity and will have quotas for Black individuals and people with disabilities (PCDs). We will work on these issues more intensively starting from the pact,” she said.

During the event, the Minister of Management, Esther Dweck, reminded us that state-owned companies generate over 400 thousand direct jobs and are certainly a driving force for good practices in the market. “This pact is fully aligned with the MGI's mission to build a truly inclusive State,” she assessed.

With the pact signed, the signatory state-owned companies commit to creating a space for exchanging experiences between companies on best practices for equity and inclusion, as well as carrying out joint actions, potentially optimizing costs, to increase the visibility of the topic in society and the business world.

For the first time, a cargo of Government oil was sold directly to a refinery.This Wednesday (March 6), the Mataripe Refinery won the direct sales bid held by Pré-Sal Petróleo (PPSA) for selling the Brazilian Government’s third oil cargo of 500,000 barrels, yielded by Atapu’s production sharing contract.The cargo will be available for shipment in April.

All companies already operating in the pre-salt layer were invited to participate, in addition to PRIO and the Mataripe Refinery.Three companies submitted bids:Galp, Petrobras and Mataripe Refinery.  All bids were based on the Brent prices and were opened in real time during a meeting held through the Teams platform between PPSA and representatives of the bidding companies.  The Mataripe Refinery is located in São Francisco do Conde (BA), with logistical assets in Madre de Deus (BA).

The first cargo from Atapu, also with 500,000 barrels, was sold in January 2023 to Galp Energia Brasil.In August last year, another batch of 500,000 barrels was sold to Equinor also through direct sales.