Russia eyeing investments in Brazil's pre-salt

Russian state companies could invest in Brazil's deepwater oil and nuclear power sectors as the South American country seeks bidders for a raft of projects.

Brazil's foreign minister Aloysio Nunes and his Russian counterpart Sergey Lavrov discussed energy industry opportunities during a meeting in New York this week, state-run news service Agência Brasil said.

"Russia [showed] interest in participating in the conclusion of the Angra 3 power plant and pre-salt oil and gas tenders," Agência Brasil said. "According to Lavrov, Russia has the necessary technology and there is already a company interested in participating in the [Angra 3] project."

No further details were given about the names of the interested companies.

PRE-SALT

Brazil will stage two pre-salt auctions for production-sharing contracts next month amid a hectic oil and gas tender schedule.

It will follow the 14th licensing round for concession contracts on Sept. 27 as the government seeks to jumpstart investment in an industry racked by the Lava Jato corruption probe and a three-year oil price downturn.

Last week, hydrocarbons regulator ANP said it had already received 25 expressions of interest for the October 27 pre-salt auctions. A full list of qualified companies is expected to be published in early October.

Trapped below a thick layer of salt under the Atlantic seabed, Brazil's pre-salt layer holds recoverable oil and gas reserves of more than 35Bboe, according to ANP.

ANGRA 3

Work on Angra 3 was halted in 2015 after the consortium responsible for building the 1.4GW plant near Rio de Janeiro became a target of Lava Jato.

In July, state-run group Eletrobras revealed it was in advanced talks with companies from China, France and Russia for a contract to complete the project.

China's CNNC is considered a frontrunner after signing a memorandum of understanding with Eletrobras earlier this month. The other contender is consortium comprising Aveva, Mitsubishi and Russia's Rosatom, according to media reports.

In a 2015 interview with BNamericas, Ivan Dybov, VP of Rosatom's international subsidiary, Rusatom Overseas, said the company was seeking new projects in Brazil after opening up a regional office in Rio de Janeiro.

SEE BNamericas' risk analysis of the Angra 3 project

An estimated 10bn reais (some US$3bn) has already been invested in Angra 3, which is around 60% complete, according to the government.

In Brazil's 10-year energy plan published in June, the government forecast the plant's commercial startup in 2026, a decade later than originally planned.

However Eletronuclear, the Eletrobras subsidiary responsible for the project, expects Angra 3 to be generating electricity in 2024.

"The fact is that we also have economic and financial reasons that show that we can no longer postpone the startup of the plant, since we have borrowed from state banks [CEF and BNDES]," Eletronuclear CEO Bruno Campos Barreto said in July.

"Any postponement on this schedule that delays the project will have a huge impact on its viability."