Why the outlook for Brazil’s pre-salt is cloudy

The return of another production sharing exploration block to Brazil’s oil and gas watchdog ANP reflects the lack of confidence in what remains of the country’s pre-salt potential.

Production sharing is the regulatory contracting regime of the areas deemed as strategic for the country. They are basically located within the so-called pre-salt polygon, which lies off Brazil’s southeast coast in the Santos and Campos basins. 

Of the production sharing blocks auctioned since the first bidding round in 2013, five have been returned: Peroba in 2021, followed by Saturno and Dois Irmãos in 2023, Três Marias early this year and Alto de Cabo Frio Oeste last week.  

There are currently five assets on offer through ANP’s open acreage system: Ágata, Cruzeiro do Sul, Esmeralda, Jade and Turmalina. Another 10 are waiting for environmental guidelines to be included in the program: Amazonita, Ametista, Citrino, Itaimbezinho, Jaspe, Larimar, Mogno, Ônix, Safira Leste and Safira Oeste. 

Block/field	Basin	Operator	Status
Ágata	Santos	-	On offer
Água Marinha	Campos	Petrobras	Contracted
Alto de Cabo Frio Oeste	Santos	Shell	Returned
Amazonita	Santos	-	Under study
Ametista	Santos	-	On offer
Aram	Santos	Petrobras	Contracted
Atapu	Santos	Petrobras	Producing
Bumerangue	Santos	bp	Contracted
Búzios	Santos	Petrobras	Producing
Citrino	Campos	-	Under study
Cruzeiro do Sul	Santos	-	On offer
Dois Irmãos	Campos	Petrobras	Returned
Entorno de Sapinhoá	Santos	Petrobras	Producing
Esmeralda	Santos	-	On offer
Itaimbezinho	Campos	-	Under study
Itapu	Santos	Petrobras	Producing
Jade	Santos	-	On offer
Jaspe	Campos	-	Under study
Larimar	Campos	-	Under study
Mero (Libra)	Santos	Petrobras	Producing
Mogno	Santos	-	Under study
Norte de Brava	Campos	Petrobras	Contracted
Norte de Carcará	Santos	Equinor	Contracted
Ônix	Campos	-	Under study
Pau-Brasil	Santos	bp	Contracted
Peroba	Santos	Petrobras	Returned
Safira Leste	Santos	-	Under study
Safira Oeste	Santos	-	Under study
Saturno	Santos	Shell	Returned
Sépia	Santos	Petrobras	Producing
Sudoeste de Sagitário	Santos	Shell	Contracted
Sudoeste de Tartaruga Verde	Campos	Petrobras	Contracted
Sul de Gato do Mato	Santos	Shell	Contracted
Titã	Campos	ExxonMobil	Contracted
Três Marias	Santos	Petrobras	Returned
Turmalina	Campos	-	On offer
Uirapuru	Santos	ExxonMobil	Contracted

Source: BNamericas

During the latest production sharing bidding round, held by ANP last December, only one of the six blocks offered was taken – Tupinambá by BP.

Glauce Santos, Wood Mackenzie’s senior research analyst for the Americas, said all the pre-salt blocks under offer or study have moderate to high risks related to reservoir quality, sealing effectiveness or even the maturity and presence of the source rock.

“Due to the risks mentioned, mainly in the areas outside of the external high [zone], where the main pre-salt discoveries lie, we don’t see a potential for a great hydrocarbon discovery in the pre-salt play,” she told BNamericas. 

Santos highlighted that the Pau-Brasil block, where BP is currently drilling, has a risk related to the CO2 content, which can be high in the area. 

“The result of this well will be important to derisk the Ágata block, currently being offered, which may impact the interest in the area,” she said. 

Meanwhile, federal oil company Petrobras is proving the potential of the Aram block in the Santos basin to hold hydrocarbons, but there is uncertainty about its commerciality, according to Santos.  

Aram and Alto de Cabo Frio Central are the only commercial discoveries announced since 2019. 

“We believe Aram may be one of the last huge discoveries in this play, potentially holding around 1.3Bb of recoverable resources,” the WoodMac analyst said.  

“The Água Marinha block, in Campos, is also a candidate for finding oil and gas, with less risk than Aram, but with smaller volumes.”

Pedro Zalán, a geologist, founder and consultant at ZAG Consultoria em Exploração de Petróleo, believes there are still commercial discovery opportunities in Brazil’s pre-salt.   

“The potential of production sharing is not exhausted, but the best parts have already been taken,” he told BNamericas. 

Zalán said Água Marinha has the greatest chance of a significant discovery, considering its proximity to discoveries already made in the pre-salt and to assets in production, such as the Marlim fields.  

He also sees potential in Norte de Brava, operated by Petrobras, and Tupinambá (BP). In the latter block, the geologist has mapped a still-closed and undrilled 700km2 structure. 

Zalán considers Ametista and Jade to be the best blocks on offer. 

“Ametista has a very large closed structure and a carbonate reservoir rock from the Albian, very similar to ExxonMobil's Ranger discovery in Guyana,” he said. 

In the case of Jade, despite being located south of the Alto de Cabo Frio Oeste block, it is also close to Alto de Cabo Frio Central, where Petrobras has made a discovery. 

As an extension of the Júpiter discovery, Cruzeiro do Sul is likely to hold oil and gas reserves but with high CO2 content. 

“Ágata is in a similar geological situation to the blocks that have already been drilled unsuccessfully and which have been returned. And Esmeralda has a very high risk, without much potential,” Zalán added. 

As for the blocks under study, Zalán says the best are Safira Leste and Oeste, which are in the middle of the pre-salt oil trend, with very good structures. 

“They could form clusters of small or medium-sized discoveries,” the geologist said.  

NEXT EXPLORATION CAMPAIGNS

BP plans to start a new exploration campaign off Brazil’s coast in 2025. The work will be carried out in the Bumerangue block in the Santos basin pre-salt.

Meanwhile, Petrobras plans to fulfill the exploration commitment of drilling one well in each block it operates under the production sharing regime, “within the timeframe of the contracts' exploratory period,” the state-run firm told BNamericas via its press office. 

ExxonMobil, which at the end of 2022 requested more time to explore the Titã block, also said through its press office that the initial exploration drilling program for all the blocks in its Brazilian portfolio is now complete. 

“The company continues to work with partners, analyzing the data acquired from the extensive drilling program and evaluating the potential for future exploration activities in these blocks,” the US major said.