By Brazil Stock Guide – Brazil’s oil regulator awarded seven of 13 pre-salt exploration blocks offered in a production-sharing auction Wednesday, drawing bids from Petrobras, PRIO, Equinor and Asian and European oil producers. The blocks are located in the Campos and Santos basins, according to the National Petroleum Agency, or ANP.
The fourth cycle of the Permanent Production-Sharing Offer set a record for the number of blocks awarded under the program, surpassing the five sold in the 2025 round. Signing bonuses tied to the winning areas total R$530.47 million, while minimum investment commitments during the exploration phase amount to R$778.43 million, the ANP said.
The awards will expand the acreage under production-sharing contracts by 58%, to 39,200 square kilometers from 24,800 square kilometers. The ANP also said the number of exploration blocks under the regime increased to 22 from 13.
All seven winning bids exceeded the minimum share of profit oil payable to the Brazilian government established in the auction rules. The average premium was 108.38%, while Rodocrosita drew the highest premium at 494.64%. Six companies submitted bids and all secured at least one block.
Campos Basin Awards
PRIO Forte, part of PRIO SA (B3: PRIO3), secured Magnetita and Hematita. The company offered the government 32.8% of profit oil from Magnetita and 7.18% from Hematita. PRIO shares trade on Brazil’s B3 under PRIO3.
Petrobras (B3: PETR3, PETR4; NYSE: PBR, PBRA) won the Azurita block with a 30% profit-oil offer to the government. Petrobras’ common and preferred shares trade in Brazil under PETR3 and PETR4, respectively.
Santos Basin Draws Global Oil Companies
CNOOC Petroleum won Jade in a consortium in which it holds a 70% operating stake alongside Sinopec with 30%. The group offered an 18.2% share of profit oil to the government. CNOOC Ltd. trades in Hong Kong under 883 and in Shanghai under 600938, while Sinopec trades under 386 in Hong Kong and 600028 in Shanghai.
Petrobras also secured Cruzeiro do Sul with a 15.27% profit-oil offer, giving the state-controlled producer two of the seven blocks awarded in the round.
Equinor Brasil, part of Equinor ASA (OSE/NYSE: EQNR), won Rubi with an offer of 25.02%. Equinor also teamed up with Galp Energia Brasil to win Rodocrosita with a 15.52% offer, with Equinor holding a 70% operating stake. Equinor trades under EQNR in both Oslo and New York.
Galp shares trade on Euronext Lisbon under GALP. The Portuguese energy company participated in Rodocrosita through its Brazilian unit.
How Production Sharing Works
Under Brazil’s production-sharing model, companies recover eligible development and operating expenses through so-called cost oil. The remaining production is then divided between the contractor and the government.
Bidders compete by offering the government a percentage of that remaining production above a minimum set for each block. Because signing bonuses are fixed in advance under the Permanent Production-Sharing Offer, the profit-oil percentage is the key criterion used to determine the winner. The government’s share of production is marketed by state-owned Pré-Sal Petróleo SA, or PPSA.
The winning companies and consortia must still submit required documentation and pay their signing bonuses before the contracts are executed. The ANP expects the agreements to be signed by Feb. 26, 2027.
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