15.64 0.00 (0.00%)
After hours: 4:48PM EST
|Bid||15.58 x 3000|
|Ask||15.84 x 39400|
|Day's range||15.59 - 15.93|
|52-week range||11.89 - 17.90|
|Beta (3Y monthly)||2.05|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||0.28 (1.74%)|
|1y target est||N/A|
Brazilian energy and logistics group Cosan SA awaits a government change in Argentina to better evaluate potentially negative impacts from fuel prices freeze to its subsidiary Raízen Combustíveis, an executive said on Tuesday. Cosan is a partner of Royal Dutch Shell Plc in the JV Raízen, which suffered losses in Argentina with a $55 million inventory in the third-quarter after the Argentinian government decided to freeze prices in August, the company said. In a call with investors to discuss Cosan's third-quarter results, during which Argentina was the main topic, the head of Investors Relations Phillipe Casale said it is unclear yet how the political and macroeconomic situation will evolve after Peronist Alberto Fernández takes over the presidency.
RIO DE JANEIRO/LONDON (Reuters) - As the weeks ticked down to Brazil's biggest-ever oil auction, state-run Petrobras held increasingly frantic talks to find potential partners, with the heaviest blow coming when major Exxon Mobil Corp pulled out days before, according to six people familiar with the matter. While many firms were far from ready to take on enormous signing fees and investments, Exxon came closest but ultimately failed to reach acceptable terms for the blockbuster bidding round, according to four of the sources, who requested anonymity to discuss confidential negotiations. The big Brazilian round was the latest offshore auction this year to undershoot expectations, hurt by competition from shale oil and other unconventional sources as well as lower demand forecasts.
(Bloomberg) -- Brazil had its second failed oil auction in two days, prompting government officials and the head of the state-run producer to criticize bidding rules.One of five available blocks received a bid on Thursday, a day after two out of four blocks went unsold. Once again, most major oil companies stayed away. Brazil’s Economy Minister said the almost complete absence of foreign players left him “terrified,” and that it send a message that it’s difficult to do business in Brazil.“No one showed up,” Paulo Guedes told reporters in Brasilia. “We went through a lot of trouble and, in the end, we sold things to ourselves.”Fourteen companies had signed up to bid Wednesday for an area that’s estimated to hold as much as 20 billion barrels of oil. It was the largest auction of reserves since the end of the second Gulf War. In the end, it was mostly Petrobras doing the bidding: the state-run company won the largest block by offering the minimum with two Chinese partners and it won another block for which it was the sole bidder. Two more blocks didn’t attract any bids.Thursday bidding saw Petrobras and its Chinese partner scoop up a block at the minimum offer while four other blocks received no bids.“The amount that companies would need to commit upfront, with license fees and compensation to Petrobras, was too high,” Petroleo Brasileiro SA Chief Executive Officer Roberto Castello Branco said in an interview, while also citing regulatory uncertainties. “We haven’t given up on our partners; they’ve given up on us.”Brazil’s oil regulator said rules that give Petrobras pre-emptive bidding rights “inhibited” other companies from taking part.“It does not seem to be a good judgment to keep the regime as it is today,” Mines and Energy Minister Bento Albuquerque told reporters.The auctions were meant to be part of Brazil’s shift away from nationalistic oil policies, helping it inject of foreign cash to develop reserves. The government had estimated Wednesday’s auction -- comprising the so-called transfer of oil rights -- would raise about $25 billion in fees and another $25 billion in compensation for Petrobras, which has already invested in drilling and platforms. In the end, the total for licensing was $17 billion, and Petrobras will receive just a fraction of what it expected initially.The results hit Brazil’s currency and the share price for Petrobras, which fell more than 5% before finishing the day little changed. An analyst called the auction a “total disaster” for the government.Castello Branco said there were concerns among the oil majors about what decisions Pre-Sal Petroleo, an agency created to manage the government’s share of the country’s production, would make in the future.In the days prior to Wednesday’s auction, there were already signs that the outcome would be a disappointment for the government. BP Plc and Total SA said they wouldn’t bid, while Exxon Mobil Corp., which has built the largest offshore exploration portfolio in Brazil after Petrobras, expressed concern about the high costs.Seeing the oil majors that have long partnered with the company dropping out or wavering, Castello Branco said he called Petrobras Chief Financial Officer Andrea Marques de Almeida into his office as the day of the auction approached.“If we want to go it alone -- can we?” he asked. The reply: “We can.”Castello Branco said Petrobras can develop the giant Buzios deepwater field it won on its own without compromising financial discipline. The company has funds to pay for all the fees and still reduce debt this year. Petrobras ended the third quarter with a strong cash position, and it also has 34.1 billion reais ($8.3 billion) of credit with the government it can use to pay for the fees, Castello Branco said.The company was aiming for at least 30% of the Buzios field, not the 90% it ended up with, he said. Chinese partners only took a 10% stake.\--With assistance from Murilo Fagundes.To contact the reporter on this story: Sabrina Valle in Rio de Janeiro at firstname.lastname@example.orgTo contact the editors responsible for this story: Simon Casey at email@example.com, Tina DavisFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Major global oil firms snubbed a second Brazilian oil auction in a row on Thursday, passing up offshore blocks and forcing officials to reconsider a bidding system that gives a privileged position to state-run Petroleo Brasileiro SA . The only block awarded in Thursday's bidding went to Petrobras, as the Brazilian state-run firm is known, and Chinese state firm CNODC, a unit of China National Petroleum Corp, which offered the minimum bid. The result, following a lack of foreign interest in an even bigger Wednesday round, was a wake-up call to those who expected this week to crown Brazil as uncontested champion of the Latin American oil industry.
Brazil’s much-hyped oil auction has ended in complete failure, with supermajors staying away after claiming that the blocks were far too expensive
(Bloomberg) -- Brazil’s largest-ever auction of oil deposits flopped, sending the real tumbling, after state-controlled Petroleo Brasileiro SA did most of the bidding while other major oil companies stayed away.Petrobras, as the company is known, joined with China’s Cnooc Ltd. and China National Oil & Gas Exploration & Development Co. in submitting the winning bid for the giant Buzios field, the prize of the auction. Petrobras was the sole bidder for the Itapu block, and offered minimum amounts for both. Two others, Sepia and Atapu, received no bids. Exxon Mobil Corp. and other oil majors didn’t make any bids.The Brazilian real fell against the dollar as the outcome diminished expectations for how much of the U.S. currency will flow into the country to develop the massive offshore oilfields. Petrobras shares also initially slumped more than 5% -- the company holds a 90% stake in the winning Buzios group, meaning it will need to spend more than initially anticipated to develop the block.“Total disaster is the best way to describe this morning’s round,” said Ross Lubetkin, chief executive officer at Welligence Energy Analytics, a consultancy. “Not one major participating is a glaring failure. Meanwhile, the failure to license Sepia and Atapu means the government misses out on $9 billion in signature bonuses.”The auction was meant to be part of Brazil’s shift away from nationalistic oil policies and help it shake off some of the toughest years in the country’s history, after a wide-ranging corruption probe was followed by a devastating recession in 2015 and 2016. With the economy still struggling to grow, Brazil was looking to the sale to inject some badly needed cash into public coffers.With estimated total reserves of 20 billion barrels of oil, the areas being auctioned were expected to raise about $25 billion in government fees and another $25 billion in compensation for Petrobras, which has already invested in drilling and platforms.But the multibillion-dollar offering came at a time when oil producers are under mounting pressure from shareholders to show capital discipline, and their stocks have been falling since crude prices tumbled in late April.With the days of oil at $100 a barrel far in the rear view mirror, oil majors have been more strict in deploying capital and are no longer looking to expand proven reserves at any cost. While the Brazilian fields on offer Wednesday were a unique opportunity to get access to discovered resources, the high signing bonuses and uncertainty about compensation payments to Petrobras curbed interest.Brazilian officials said the almost 70 billion reais ($17 billion) in licensing fees from the two auction blocks that were awarded still amount to the largest ever collected by a government. But the compensation to Petrobras will fall to only a fraction of $25 billion, because its partners in Buzios hold just a 10% stake in the venture. The exact amount isn’t known yet.The auction was still a huge event for Brazil, oil regulator Decio Oddone said at a Rio press conference following the auction announcement. Energy Minister Bento Albuquerque called it a success and said it shows Brazil is on the right path. He added that the country will offer the two fields that went unsold again next year.“We will need to evaluate why oil majors didn’t participate,” Albuquerque told reporters Wednesday.The oil majors who held back could be waiting for another pre-salt oil auction Brazil is holding on Thursday, where five exploration blocks will be sold with cheaper signing bonuses because the areas involve exploration risk, with crude yet to be struck.“The lack of participation from other oil companies was a surprise, and they could be seeing better opportunities for tomorrow,” said Joao Carlos de Luca, an industry consultant and former chairman of Barra Energia.‘Very Expensive’The Buzios block alone represents one of the largest reserves of discovered crude to be sold since Iraq opened up after the second Gulf War. Despite the block’s size, Stephen Greenlee, Exxon Mobil Corp.’s president of exploration, said in an interview last month that Buzios was “very expensive.”One of the reasons why Buzios was so pricey: The field is already producing over 400,000 barrels a day of crude, roughly the same as departing OPEC member Ecuador, with four platforms that have cost Petrobras about $20 billion. While that’s a unique opportunity in the industry, it also means that the winners would have had to compensate the state-run oil producer with some combination of cash, crude and investments over the years.Petrobras was little changed at 4:48 p.m. in Sao Paulo after plunging as much as 5.2% right after the auction results were announced.“This will add extra pressure to their cash flow,” Marcelo de Assis, the head of Latin American upstream research at Wood Mackenzie Ltd., said of Petrobras. “They will spend about $7 billion above the $9 billion they got from the government” because they aren’t splitting future costs with more partners, he added. Petrobras received the $9 billion for settling the original Transfer of Rights contract.“We expected competition, there was none,” Petrobras CEO Roberto Castello Branco told reporters after the auction, declining to comment further.(Updates with minimum amounts bid in second paragraph.)\--With assistance from Julia Leite.To contact the reporters on this story: Sabrina Valle in Rio de Janeiro at firstname.lastname@example.org;Peter Millard in Rio de Janeiro at email@example.com;Luiza Ferraz in Rio de Janeiro at firstname.lastname@example.orgTo contact the editors responsible for this story: Simon Casey at email@example.com, Carlos Caminada, Steven FrankFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Brazil's biggest-ever oil auction frustrated expectations on Wednesday, as high prices and the dominant role of state-run oil company Petrobras scared off global oil majors. Petroleo Brasileiro SA, as the Brazilian firm is also known, and Chinese state firms CNOOC and CNODC made the only bids out of over a dozen major oil firms who had registered. The setback was a harsh reminder that, even as promising offshore fields make Brazil a rare bright spot in Latin America's petroleum industry, steep signing bonuses and tricky production-sharing deals can keep foreign players at bay.
As Brazil approaches the biggest oil auction in its history — and one of the world's most expensive ever — the field of deep-pocketed bidders has narrowed to less than a dozen oil majors. In Wednesday's auction, known as the transfer-of-rights (TOR) bidding round, firms are expected to pay up to 106.5 billion reais ($26.5 billion) in signing bonuses for fields that Brazil says may hold up to 15 billion barrels of untapped crude. In September, oil regulator ANP said 14 firms signed up to participate in the auction of four TOR blocks, which could cement Brazil's reputation as one of the world's hottest offshore plays.
Brazilian President Jair Bolsonaro said on Wednesday that he wants his country to join OPEC, a move that would add the most significant new producer to the oil cartel for years but met with skepticism in Brazil's energy industry. The comments come ahead of a massive auction of oil rights in Brazil, which is boosting output rapidly. OPEC membership would likely require Brazil to limit oil production, potentially throwing future expansion plans into doubt.
RIO DE JANEIRO/MEXICO CITY (Reuters) - When executives arrive in Rio de Janeiro this week for Brazil's biennial Offshore Technology Conference, they will find themselves in Latin America's most promising market for Big Oil by far. In early October 2018, Brazil's current president, Jair Bolsonaro, was in a tight electoral race with Fernando Haddad of the leftist Workers' Party. Global executives feared a Haddad victory would reverse recent pushes to provide them an opening in Brazil's oil industry, which for years had been dominated by state-run Petroleo Brasileiro SA, or Petrobras.
Swiss federal prosecutors said they had opened an investigation of private bank J. Safra Sarasin as part of a wide-ranging corruption probe surrounding Brazilian state oil company Petrobras and construction firm Odebrecht. J. Safra Sarasin had no immediate comment.
Although TOTAL (TOT) is expected to have benefited from strong production from global assets, fluctuation in commodity prices may have adversely impacted profitability in the third quarter.
(Bloomberg) -- An auction next month of oilfields in Brazil may be the priciest ever held, raising at least $50 billion in licensing fees and compensation, according to people familiar with government estimates.Exxon Mobil Corp., Royal Dutch Shell Plc and other energy giants are set to vie for deep-sea deposits that could hold 15 billion barrels of oil, almost twice as much as Norway’s reserves. Winners at the Nov. 6 auction are expected to pay $25 billion in licensing fees, plus share a portion of their production with the government.In addition, bidders will need to negotiate payments to state-controlled Petroleo Brasileiro SA for investments it has already made in the area. Those payments could add another $25 billion to $45 billion in costs, according to officials familiar with government figures who asked not to be named because the information is private.The auction is unique in part because one of the four areas being offered is already gushing more than half of the daily output from Venezuela. It’s a rare opportunity for an industry more accustomed to exploring riskier offshore prospects that can take a decade or more to develop.Fourteen producers -- including Petrobras -- have signed up to participate in the auction.Petrobras didn’t respond to requests for comment. The Brazilian oil regulator, known as ANP, declined to comment on the total amount the auction could raise. It said payments to Petrobras will be negotiated between the company and its partners, without government interference.The offerings are at the heart of the pre-salt, a giant expanse of oil deposits about the size of Ohio trapped beneath a layer of salt under the Atlantic seabed. The four prospects -- Buzios, Itapu, Sepia and Atapu -- are estimated to hold as much as 15 billion barrels of recoverable crude, according to a study by Houston-based consultancy Gaffney, Cline & Associates.Buzios is already Brazil’s second-largest field by production, with output of about 425,000 barrels a day -- at a time when Venezuelan production is running at 700,000. It has four platforms that are tapping about a dozen wells, with room for other wells to be drilled and the current ones to be ramped up further.Payment TermsBrazil’s federal audit court estimates the compensation to Brazil’s oil company could ultimately reach $45 billion under initially proposed guidelines. It has recommended the government lower certain parameters like the estimated price of Brent crude to make the deals more attractive, according to the people familiar. The court’s estimates and recommendations for the sale are confidential. Valor newspaper said on Tuesday the revisions including the reference Brent price could lower the estimated top compensation number by at least $6.3 billion.The Brazilian Petroleum Institute, an industry group that represents some of the bidders, estimates the payments to Petrobras will be worth between 120 billion and 130 billion reais ($29 billion-$31 billion). A study by Wood Mackenzie Ltd. released Monday estimates $24 billion.The rules do not specify how the payments to Petrobras should be settled. A combination of cash, crude and investments over many years is a possibility. Licenses last for three decades. Winning bidders will have 18 months to reach an agreement with Petrobras before the oil regulator is required to step in as mediator.As for the licensing payments, the largest chunk of the $25 billion will be due this year and the remainder in 2020, all in cash.A 2009 auction of development rights for Iraqi oil included larger reserves, but was done using different methodology under which companies were bidding for the right to service the oil fields and get paid per barrel by the government.(Updates with compensation price revisions in ninth paragraph.)To contact the reporter on this story: Sabrina Valle in Rio de Janeiro at firstname.lastname@example.orgTo contact the editors responsible for this story: Simon Casey at email@example.com, Tina DavisFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Brazil's Senate passed the main text of a bill late on Tuesday defining the distribution of proceeds from a blockbuster auction of oil prospecting rights, a key milestone for the enormous offshore region known as TOR - the 'transfer-of-rights' area. The bidders who win exploration and production rights in the massive Nov. 6 auction will be obliged to pay the government a combined signing bonus of some 106.5 billion reais ($25.8 billion), making it the largest oil bidding round in history, according to Brazilian authorities. The fields are unique as Brazilian state-run oil firm Petroleo Brasileiro SA, better known as Petrobras, has already done significant exploration work in the area.
TOTAL (TOT) further expands operations in Brazil through a new exploration license in the C-M-541 deep offshore block, located in the pre-salt Campos Basin.
France's Total SA , the big winner in a Brazilian auction of offshore oil concessions on Thursday, said it will not participate in a bigger auction scheduled for Nov. 6 of the so-called Transfer of Rights area in Brazil's pre-salt region. The company's chief executive officer, Patrick Pouyanné, said in a statement that was because the competitive bidding rounds were for non-operating stakes. A consortium led by Total won the exploration and production rights for an offshore block near the pre-salt region on Thursday, agreeing to pay the government a signing bonus of 4 billion reais ($978 million).