Two ExxonMobil concessions off Brazil’s coast may be returned to watchdog

The federal prosecutor at Brazil's oil and gas regulator ANP has recommended that the agency's exploration and production (SEP) department deny ExxonMobil's request to suspend the contractual validity period of two exploration licenses in the Sergipe-Alagoas basin, according to an official ANP document. 

If SEP and, subsequently, the ANP's general directorate accept the recommendation, the assets would be returned to the regulatory agency.

The US oil company's request pertains to concession contracts SEAL-M-351_R13 and SEAL-M-428_R13 from the ANP's 13th bidding round, the exploration period for which is set to end on March 23.

Signed on March 23, 2015, the contracts are operated by ExxonMobil, which holds a 50% stake, in partnership with Brava Energia (30%) and Murphy Brasil (20%).

In its suspension request, the consortium argued that an asset evaluation is necessary to verify the existence of remaining opportunities and that the transfer of ownership or the process of obtaining a new operating license from the federal environmental regulator Ibama by Brava depends on completing the transfer of Exxon and Murphy's stakes to Brava.

The transfer of the US major's 50% stake – and its role as the operator of the concessions – to Brava was approved by local antitrust authority Cade in October 2024 but still requires ANP approval.

According to ExxonMobil, carrying out new exploratory activities would require additional time for contracting, rig mobilization and procurement of supplies.

However, the ANP's legal office did not identify any unforeseen events, force majeure or similar causes that would justify suspending or extending the contractual term.

"Even the fact that a new operator is interested in continuing the exploration of the block cannot be considered a justification for extending the contractual deadline, especially since the exploration period for these contracts was established in the bidding notice and has always been known to the consortium participants," the office argued.

The legal office noted that the contracts had already been extended through ANP resolutions published in 2020 and 2022, allowing the consortium time to fulfill the minimum exploratory program (PEM) for the first and second exploration periods.

"Unfortunately, due to the unsuccessful drilled well, the consortium did not submit a PAD [discovery evaluation plan] to continue the assessment of the discovery."

The office also pointed out that if the future operator is interested in continuing to explore the concessions, it must participate in a new bidding process when the assets are made available again.

BNamericas contacted ExxonMobil for comment, but the company declined to make a statement.

In addition to the two blocks in question, the US firm operates the following blocks in Sergipe-Alagoas: SEAL-M-430_R15, SEAL-M-501_R14, SEAL-M-503_R14, SEAL-M-505_OP1, SEAL-M-573_R15, SEAL-M-575_OP1, and SEAL-M-637_OP1.