CNOOC Ltd. has entered into four new concessions in Brazil, expanding its footprint in the Santos basin.
The state-backed Chinese exploration and production company, through CNOOC Petroleum Brasil Ltd., acquired a 100 percent operating stake in block SM1813 in the offshore Santos basin. Additionally CNOOC secured a 20 percent non-operating interest each in blocks PM1737, PM1739 and PM1797 in the offshore portion of the Pelotas basin.
The partners in the Pelotas licenses are Petróleo Brasileiro SA (Petrobras), which owns a 50 percent operating stake in each block, and Shell PLC, which holds the remaining 30 percent.
The National Agency of Petroleum, Natural Gas and Biofuels (ANP) awarded the four leases under the fourth Permanent Concession Offer Cycle, CNOOC said Thursday in a press release on its website.
State-run Petrobras had already announced the Pelotas concessions Monday, saying, “The signing of these contracts… strengthens Petrobras' position as the main operator of oil fields located in deep and ultra-deep waters, potentializing the recomposition of reserves for the future”. Petrobras has now won a total of 29 Pelotas concessions under the fourth Permanent Concession Offer Cycle.
Oil and gas concessionaires in Brazil assume the risks of investing, including failed explorations. In the bidding round a company or consortium must propose a bonus signature payment and a minimum exploratory program, according to the ANP.
In the South American country, CNOOC is an investor in the first production-sharing contract, involving the Libra block in the Santos basin. It was awarded 2013 to a consortium of CNOOC, Petrobras, Shell, Total and China National Petroleum Corp. CNOOC holds a 10 percent stake in Libra, which includes the Mero oilfield.
In the four-phase Mero project, two phases have achieved production. Put onstream 2022, Mero 1 has averaged 14,000 barrels of oil equivalent per day (boepd), according to CNOOC. Mero 2 came online earlier this year. Mero 3 is expected to start production also this year, while Mero 4 has so far reached a positive investment decision. Each phase has a capacity of 180,000 bpd.
CNOOC also participates in the Búzios block, also in the Santos basin, with a 7.34 percent stake. Búzios is planned to have 11 production units. The first four units to be put into production have an aggregate daily output of about 43,000 boe, while Búzios 5 just began production last year and is expected to have a daily average of 150,000 barrels of oil and six million cubic meters (211.9 million cubic feet) of natural gas.
CNOOC also owns a 100 percent stake in the ESM592 block offshore Brazil, 30 percent in the Pau Brasil block and 20 percent in the ACF Oeste block.