Pre-salt auction raises R$8.8bn, below the R$10bn target

The revenue came in below the projection deemed crucial by the economic team to meet the fiscal target. The estimate presented to the Ministry of Finance was R$10.2 billion, a figure already revised downward in November from an earlier R$14.7 billion. With the partial shortfall in the auction, the government now has less room to comply with the fiscal framework, which permits a zero deficit with a tolerance band of up to R$31 billion.

On Wednesday (3), Brazil’s public spending watchdog, the Federal Court of Accounts (TCU), authorized the auction, which put on sale rights and obligations related to the fields. Despite the clearance, the rapporteur Jorge Oliveira described as “worrisome” the fact that the government was reaching the end of the year relying on an unprecedented and complex auction to close its accounts.

PPSA CEO Luiz Fernando Paroli downplayed the absence of bids for Tupi and the impact on the government’s fiscal target. According to him, the federal government loses nothing, as the company remains part of the field, continues to sell and market oil, and works alongside the other partners under this model.

“My reading is that this difference between R$10.2 billion and R$8.8 billion will not have a major impact. We secured roughly 88% of the expected revenue and, next year, we will still have Tupi as an asset belonging to the company whose oil will be sold,” Paroli said.

The Mero block, which involved the sale of the government’s 3.5% stake, was acquired for R$7.79 billion, a 1.9% premium over the minimum price. The Atapu block, corresponding to 0.950% of the reservoir, sold for just over R$1 billion, a 16% premium over the minimum price of R$863 million.

The areas sold correspond to the government’s shares in the Production Individualization Agreements (AIPs) established to balance output between contracted areas—under concession, production sharing, or transfer-of-rights regimes—and the non-offered areas. All reservoirs are operated by Petrobras, which has as partners, depending on the field, Shell, TotalEnergies, CNOOC, CNODC, and Galp.

The winning bidders do not join the existing consortia for the contracted fields. Instead, they assume, in the federal government’s place, the economic rights over production allocated to the non-contracted areas. In addition to the bid amount, buyers take on financial obligations for the duration of the contracts, including contingent payments linked to Brent, due when the average annual price exceeds $ 55 per barrel, and redetermination payments, applied when a technical review increases the contractual share of the non-contracted area.

With the conclusion of the auction, PPSA will begin the payment and contract-signing process, which must be completed by March 4, 2026.

“Any reserve auction is of interest to Petrobras,” a source close to the company said when commenting on its participation in the PPSA auction. According to this source, the two awarded blocks received bids with a “small premium” in Mero’s case, and a larger one in Atapu’s case, compared to their minimum prices.

The Tupi area, also included in the auction, drew no bids due to lack of economic viability, the source said. In this case, the investment–to–oil-extraction ratio was not attractive, the person explained.

For Marcelo de Assis, partner at MA2 Energy, Petrobras’s investment in the auction reflects the fact that the state-owned company and Shell have in-depth knowledge of the geology and the production costs of Mero and Atapu. The move makes sense in a market scenario that is well supplied in the short and medium term, with low prices and limited appetite from companies from other countries.

Regarding Tupi, he believes Petrobras and Shell likely saw minimal production gains from the purchase, considering it is a mature and technically well-known field, which made the minimum price of R$1.69 billion set by the government appear expensive. “Petrobras and Shell would add larger volumes but without impacts in terms of governance, logistics, or investments beyond the acquisition price.”

Petrobras shares entered a trading halt late morning on Thursday (4), with negotiations suspended after the company disclosed a notice of material fact regarding the auction results. With the acquisition, the oil giant increased its stake in the shared Mero reservoir from 38.6% to 41.4%. In Atapu, its share rose from 65.68% to 66.38%.

The company’s common stock (ON) closed at R$34.38, up 0.56%. Its preferred shares (PN) ended the session at R$32.52, up 0.65%.

Shell said in a statement that its stake in the shared Mero reservoir increased from 19.3% to 20%, and from 16.66% to 16.92% in Atapu.