In fact, Petrobras together with China’s Cnooc Ltd. and China National Oil & Gas Exploration & Development Co. submitted the winning bid for the prize of the auction, the giant Buzios field. Also, Petrobras was the only bidder for the Itapu block, while other oil majors, including Exxon Mobil Corp. did not make any bids, also Sepia and Atapu did not receive any bids.


Ross Lubetkin, chief executive officer at Welligence Energy Analytics noted that “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.”

On their part, the Petrobras CEO Roberto Castello Branco stated that "we expected competition, there was none.”

Notably, Bloomberg reports that the auction was aiming 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.

The areas being auctioned, with estimated total reserves of 20 billion barrels of oil, were expected to bring almost $25 billion in government fees and another $25 billion in compensation for Petrobras, which has already invested in drilling and platforms.

Nevertheless, officials highlight that the $17 billion (70 billion reais) awarded in licensing fees due to the two auction blocks in particular amount to the largest ever collected by a government. Even so, Petrobras' compensation will fall to only a fraction of $25 billion, as its partners in Buzios hold a 10% stake in the venture.

Bento Albuquerque, the Energy Minister, said that this shows that Brazil is on the right path, commenting on the need to evaluate why oil majors did not participate and further highlighted that next year, the country will try to sell the two fields that remained unsold.

Last month, Exxon Mobil Corp.’s president of exploration, Stephen Greenlee has stated that that the Buzios block is “very expensive,” even if it represents one of the largest reserves of discovered crude to be sold since Iraq opened up after the second Gulf War.

According to Bloomberg, the field is so expensive due to the fact that it is daily producing over 400,000 barrels of crude, nearly the same as departing OPEC member Ecuador, and four platforms that have cost Petrobras almost $20 billion.

Initially, Petrobras shares, with a 90% stake in the winning Buzios group, slumped more than 5%, meaning it will need to spend more than initially anticipated to develop the block.

Marcelo de Assis, the head of Latin American upstream research at Wood Mackenzie Ltd., said that Petrobras will have to “spend about $7 billion above the $9 billion they got from the government” because they aren’t sharing future costs with more partners.

In July, Brazil seemed to be facing tensions concerning oil exploitation, since Brazilian environmental protection agency, Ibama, proposed that the auction of oil exploration blocs near Abrolhos national park shouldn't commence. Abrolhos national park is the richest area of marine biodiversity in the South Atlantic Ocean.

Last year, the Brazilian energy major announced the signing of a Memorandum of Understanding (MoU) with the Norwegian oil major Equinor to evaluate a joint business development in the offshore wind energy industry in Brazil. Within the scope of the strategic partnership between the two companies, Petrobras and Equinor have been researching other potential areas for cooperation, including the development of renewable energy initiatives.