Sunday, July 12, 2020

Will Mideast tensions raise stakes in Brazil’s pre-salt rounds?

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Asian NOCs may seek to diversify supply in midst of uncertainty

There’s no doubt the attractive pre-salt acreage offered in Brazil’s 2019 exploration bid rounds will attract big spenders. Amongst the supermajors and big explorers, Asian national oil companies (NOCs) are also expected to take part.

The recent attack on Saudi Arabia’s oil infrastructure brought an increased awareness of the vulnerability of critical oil supply-chain infrastructure in the Mideast Gulf. The event may have upped the ante for Asian NOCs in need of diversified supply. Could Brazil hold the key?

“Chinese companies, such as Sinopec and CNOOC, may become more aggressive to diversify their reserves. They are very dependent on the Middle East,” said Marcelo de Assis, Wood Mackenzie Head of Exploration and Production Research for Latin America, in Brazil’s Valor Economico newspaper.

This particular event isn’t enough to bring major changes in investment decisions, particularly in the surplus rounds. Overall, we expect Asian NOCs, such as CNOOC and PETRONAS, to be present in the auctions as they have qualified for recent ones, with more aggressive bids from CNPC as it won no blocks recently. 

Want to learn more about our views on the 2019 Brazil exploration bid rounds? Join us for our webinar, Brazil 2019 licensing bonanza: offering up pre-salt blocks on Wednesday, October 16th to get a fuller picture of our views. Fill in this form to register.

Laura Blewitthttp://laurablewitt.com
Laura joined Wood Mackenzie in 2019 as the Americas content marketing manager. She has written extensively on the energy industry, with in-depth experience in covering crude, refined products, NGLs and biofuels markets. She previously reported for Bloomberg News and Argus Media. In her free time, Laura volunteers for Young Women Energized as the marketing committee head.

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