GLPEY - Brazil auction to test oil industry's new-found spending discipline
Global oil majors (NYSE:XOM) (NYSE:CVX) (NYSE:TTE) (NYSE:RDS.A) (NYSE:EC) (NYSE:EQNR) (OTCPK:GLPEY) and their new-found investment discipline will be put to the test tomorrow, as Brazil is set to auction off high-quality, low-cost, long-lived, pre-sal oil blocks. The Government attempted to auction the same blocks in 2019 for upwards of $26b, and the industry refused to raise the paddle, with the exception of CNOOC who took part of one block for ~$3b, alongside state-owned Petrobras (NYSE:PBR). The blocks known as Sepia and Atapu are on auction tomorrow under the following terms; for Atapu, the bidder must pay $700m up front and share a minimum of ~6% of production with the Government as a royalty; for Sepia, the up front payment is $1.25b while the production sharing is penciled at a minimum ~15%. The winner will be decided based on the production sharing split offered, as the upfront fees are fixed. In 2019,
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Brazil auction to test oil industry's new-found spending discipline