Petrobras gets initial OK for ToR farm-outs

Brazil’s Chamber of Deputies has approved a draft law that would allow NOC Petrobras to sell off interests in transfer of rights (ToR) acreage, international media reported Wednesday.

The draft states that the company must maintain 30% stakes in each of the licences, which cover pre-salt areas.

If approved by Brazil’s upper house and signed into law, the policy change has the potential to help the country draw in more foreign investment and raise overall hydrocarbons output, as oil and gas regulators will be able to make more pre-salt acreage available to other E&P players.

In 2010, Petrobras paid the Brazilian government USD 42.5 billion for significant pre-salt acreage under the ToR regime, which allows the NOC to explore and produce an estimated 5 billion boe. The ToR acreage is thought to hold a total of 6 billion-15 billion boe of recoverable reserves, an estimate determined after Petrobras began exploring in the area.

In related news, on Wednesday, Wood Mackenzie reportedly projected a potential overall output for the country of around 5 million bopd by the mid-2020s, up from the current 3.7 million bopd, due to an April 2018 amendment of Brazil’s local content policies to make them more flexible.