[Brazil] Gato do Mato

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escveritas
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[Brazil] Gato do Mato

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Shell Dominates Disappointing Brazilian Lease Round
The country’s 17th Bidding Round attracted bids on just five of the 92 blocks on offer… and all from Shell.

Brazil’s 17th Bidding Round covering oil and natural gas licenses offshore failed to generate much interest among international players with just five of the 92 blocks on offer receiving bids—and all from supermajor Shell. Only nine companies registered for the auction, down from 17 for the 16th bid round held in 2019.

Shell dominated the sale, scooping up stakes in five Santos Basin blocks. The operator purchased 100% stakes in the S-M-1707, S-M-1715, S-M-1717, and S-M-1719 blocks, paying total signing bonuses of about $5.5 million. The company paid $1.7 million for the S-M-1707 block, the highest single bid in the auction.

In addition, Shell paired up with Colombia’s Ecopetrol to lease S-M-1709, also in the Santos Basin. Shell will hold a 70% operating stake while Ecopetrol will retain the remaining 30% interest.

The leased blocks are located primarily in the southern portion of the Santos. Shell is no stranger to the basin. The company operates the Gato do Mato and Sul de Gato do Mato subsalt fields in the area.

According to the ANP, Brazil’s National Petroleum Agency, the round will generate investments of at least $24.7 million in the first years of the contracts for the five blocks acquired. Officials downplayed the lack of overall interest in the round, especially among big international oil companies such as BP and ExxonMobil, who did not participate.

“It is important to remember that this round focused on new exploratory frontiers that are areas with a lot of risk for companies in the sector,” said Rodolfo Saboia, director general of the ANP. “And these companies set their budgets the year before. So, they did this when the global pandemic situation was most acute. The context of the international oil industry is still quite challenging. With all this, there was not, and could not be, an expectation that all the blocks would be sold off.”

The blocks that failed to sell as part of this bid round will now be evaluated for possible inclusion in Brazil’s Open Acreage program. The program includes all blocks and mature fields that failed to sell at previous auctions or were returned to the ANP.

Brazil announced details of its 17th Bidding Round in late 2020, in which 92 blocks in the offshore Campos, Pelotas, Potiguar, and Santos Basins were included, covering a total of 53,900 km2.
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Re: [Brazil] Gato do Mato

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Awarded limited notice to proceed for Shell’s Gato do Mato development in Brazil

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May 26, 2022
Awarded limited notice to proceed for Shell’s Gato do Mato development in Brazil

BW Offshore is pleased to announce the award of a limited notice to proceed (LNTP) by Shell Brasil Petróleo Ltda (Shell) and its partners for early-stage engineering and supplier reservations for the supply of an FPSO for the Gato do Mato oil and gas field offshore Brazil.

The LNTP is valued up to USD 50 million. Upon completion of the LNTP, Shell and its partners target to award a lease and operate contract to a consortium comprising BW Offshore and Saipem S.p.A., which will be jointly responsible for the engineering, procurement, construction, and installation (EPCI) of the FPSO with expected delivery in 2026. The award is subject to the parties finalising the commercial and pricing terms of the contract in view of the current inflationary supply chain market and a final investment decision to proceed by Shell and its partners.

The FPSO lease and operate contract will have a firm period of 18 years with seven years of options.

“We have a clear strategy of developing and operating infrastructure type floating production solutions with long-term contracts and investment grade counterparties. Gato do Mato is a robust project meeting all our requirements,” said Marco Beenen, the CEO of BW Offshore. “We will replicate the Barossa project model, bringing in equity partners, and take it one step further by partnering with Saipem for the EPCI phase to add execution capacity and capabilities. We are very pleased to team up with Saipem and look forward to building a long-term relationship with Shell and its partners in Brazil.”
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Re: [Brazil] Gato do Mato

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Update on the Gato do Mato project
21 November 2022

BW Offshore has been advised by Shell Brasil Petróleo Ltda (Shell) that final investment decision (FID) on the Gato do Mato oil and gas field development offshore Brazil will not be made within the next 12 to 24 months. The Company expects to receive formal notification terminating the limited notice to proceed (LNTP) in due course. BW Offshore will be reimbursed for costs incurred in line with the agreed terms of the LNTP.
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