Interestingly, the same oil fields went unsold during the 2019 oil auction held by Brazil. To encourage bidders, this time Brazil slashed its exploration rights fee by 70 percent.

Notably, Petrobras was the biggest bidder with $750 million, followed by Total and British-Dutch Shell with $510 million and $180 million, respectively. Malaysia’s Petronas and Qatar Petroleum meanwhile spent $260 million each for rights to the largest block, Sepia.

Recently, Petrobras has handed a contract to offshore driller Seadrill for work in the Buzios field located offshore Brazil. The contract is expected to be worth around $264 million.

Seadrill is expected to begin work for Petrobras’ in December 2022 and the contract is expected to be for a period of 1040 days.

Seadrill’s chief executive officer, Stuart Jackson told the media, “Petrobras is a long-standing and valued customer of Seadrill and signing a third contract with them this quarter is testament to our strong partnership and commitment to the Brazilian market. Seadrill is focused on growing our fleet in strategic basins where we see high growth potential, such as Brazil, where we are now the largest international drilling contractor.”

Petrobras is mulling selling its 100 percent stake in the Catua Field, in the Campos Basin. The field is located in the waters of Espirito Santo State, around 128 kilometres offshore.

The field was discovered by Petrobras in 2003 and according to the company, the estimated stock tank original oil-in-place (STOOIP) is up to 993.82 MM oil boe.

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The field was discovered by Petrobras in 2003 and according to the company, the estimated stock tank original oil-in-place (STOOIP) is up to 993.82 MM oil boe.

The idea of privatising Petrobras is being considered by the Brazilian government. Recently, Brazil’s President Jair Bolsonaro said during a radio interview, “This is on our radar. But privatising a company is not just putting it on a shelf and whoever offers the highest bid takes it, it is very complicated.”

It was the second time that Bolsonaro was discussing the same. After Jair Bolsonaro’s comments on privatisation of Petrobras, the company saw its stock price rise.

Earlier this month, Bolsonaro told a local radio station, “I want to privatise Petrobras, yes, I do. I shall see together with the economic team what we can do.”

Recently, Brazil’s Minister of the Economy Paulo Guedes also revealed that the Jair Bolsonaro led administration will privatise Petrobras within a decade.

He told the media, “What is the plan for the next 10 years? Continue with the privatisations. Petrobras, Banco do Brasil, everyone getting in line, getting sold and transforming into social dividends.”

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Brazilian oil giant Petrobras’ oil production was also down during the same period. It produced 2.1 million bpd in the first quarter, down by 5 percent.

Earlier this month, Petrobras acquired BP’s stake in six offshore blocks in the Foz do Amazonas Basin. The financial details of this deal have not been disclosed. BP transferred its 30 percent stake in the offshore assets to Petrobras. This means now Petrobras owns a 100 percent stake in the blocks.

In this regard, Petrobras said, “The transaction is in line with the 2021-2025 Strategic Plan, which outlined new exploratory fronts outside the Southeast basins, and is part of the company’s portfolio-management process, prioritising investments in world-class deep-water and ultradeep-water assets.”

Last year, Petrobras had set a new record for annual output in 2020. The oil company pumped an average of 2.28 million bpd in 2020. It broke its previous record of an average of 2.23 million bpd, which was set in 2015.

According to Petrobras, it was greatly helped by the performance at the Buzios Field and improved corrosion-treatment efforts at its subsalt fields. It said that, “The records demonstrate good operational performance despite the challenging scenario of 2020, with greater focus on world-class assets in deep and ultra-deep waters where Petrobras has displayed a large competitive advantage.”

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In this regard, Petrobras said, “The transaction is in line with the 2021-2025 Strategic Plan, which outlined new exploratory fronts outside the Southeast basins, and is part of the company’s portfolio-management process, prioritising investments in world-class deep-water and ultradeep-water assets.”

Last month, five Petrobras board members stepped down following the removal of its chief executive officer (CEO) Roberto Castello Branco. Brazilian President Jair Bolsonaro said he was ousting the Petrobras CEO following a string of fuel price increases.

Petrobras revealed the decision of its board members to step down through a securities exchange filing. The five directors were appointed by the government, which holds seven of Petrobras’ 11 board seats, but investors viewed them as staunch opponents of government interference in the publicly traded company.

Earlier this year, it was also reported that Petrobras has set a new record for annual output in 2020. The oil company pumped an average of 2.28 million bpd in 2020. It broke its previous record of an average of 2.23 million bpd, which was set in 2015.

“The records demonstrate good operational performance despite the challenging scenario of 2020, with a greater focus on world-class assets in deep and ultra-deep waters where Petrobras has displayed a large competitive advantage,” Petrobras said.

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Earlier, it was reported that Petrobras is in talks with a global consortium to sell its natural gas fields. The consortium consists of Brazil’s 3R Petroleum and Norway-linked DBO Energy among others. The Peroa cluster would be among the first offshore all-gas fields sold by Petrobras. It is located off the coast of Espirito Santo state.

Previously, Petrobras said in a securities exchange filing that it is planning to spend around $6 billion till 2024 to decommission 18 offshore platforms, underwater gas pipelines and offshore wells. According to the oil giant, it predicts proceeds of $1billion from asset sale in 2020, after receiving $14.4 billion in 2019.

Petrobras also initiated the sale process for 26 onshore and shallow water oil fields and a refinery in the northeastern part of the country. It was reported that the oilfields produce approximately 23,000 barrels per day this year and 124,000 cubic meters per day of gas. That said, the Clara Camarao refinery has a capacity of 39,600 barrels per day.

In September, chief executive Roberto Castello Branco said that approximately 11,000 employees of Brazilian state-run oil company Petrobras have accepted buyout packages and will leave the firm this year or next.

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Many believe this move from Saudi Arabia will start a price war with Russia, who did not agree with OPEC’s decision to slash oil production in light of the Covid-19 outbreak.

In response, Petrobras plans to reduce its diesel and gasoline selling prices to its distributors, the media reported.

Due to the collapse in negotiations between Saudi Arabia and Russia, oil stocks across various exchanges in Asia-Pacific, Tokyo, Australia, Hong Kong, and the US plunged in early Monday trading. So far, global oil prices have dropped by almost 30 percent.

Petrobras’ shares too plunged by nearly a third on Monday.

The fall in share value of Petrobras could also hinder the oil behemoth’s mega plan to divest assets worth $30 billion by 2024.

In December 2019, during a presentation in Petrobras’ New York Investors’ Day, Petrobras announced that it expects to boost its equity value by 45 percent by 2021. Petrobras believed its decision to cut costs and divest its non-core assets will contribute to the increase in its equity value.

The company is also expected to become the world’s largest oil producer among publicly listed companies by 2030. However, an unprecedented event like the Covid-19 outbreak could force Petrobras to revise all its plans.

Adriano Pires, director of the Brazilian Infrastructure Center told the media, “It still has a very high debt level. That’s why it has to continue cutting costs, invest in what provides good returns, exercise capital discipline, keep prices aligned with international levels, and divest assets. It is a company which is far from being healthy but it’s on the right path.”

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Brazil’s state-owned Petrobras acquired 90 percent of the Buzios oil fields, which is the largest among the four up for auction. The remaining 10 percent was acquired by Chinese firms CNOOC and CNODC.

The second oil field -Itapu, only received an offer from Petrobras, whereas, the other two oil fields namely – Sepia and Atapu, did not receive any offer at all. The two blocks are expected to be auctioned again next year.

Despite the oil auction being a disappointment and not attracting foreign investment as it was earlier anticipated, Decio Oddone, head of the National Petroleum Agency in Brazil termed the auction as a success and described the sale as the biggest ever achieved in the world.

The Brazil Oil Institute, in a statement, said, “The fact that two blocks were not auctioned does not reduce the importance of the result of this event. This is the first auction of its kind offering large volumes already discovered, which reduces risk.”

Prior to the auction, around a dozen major oil firms around the world were expected to bid for the oil fields in Brazil which contain as much as 15 billion barrels of oil. Some notable names that were expected to bid are ExxonMobil, BP, Total and Royal Dutch Shell.

According to reports, a hefty signing fee demanded by authorities in Brazil might be the reason why many oil giants chose not to bid for the oil blocks.

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