Petrobras kicked off the year hoping to alleviate skyrocketing debt by meeting most of its divestment targets. Pedro Parente, the company’s recently appointed CEO, wants to raise US$20 billion by 2018 while also focusing on deepwater exploration.

In the midst of sweeping company restructuring, the federal government finally passed a bill that scraps Petrobras’ forced 30% participation in every presalt offshore block. With that, companies can dispense the state-owned company or partner with Petrobras, which plans to build on proven expertise to attract team players.

Offering short drilling times, lifting costs under US$8/bbl and more than six operating FPSO units with more on the way, Petrobras’ presalt yields have soared in recent years, putting the company at an advantage to develop presalt riches.

Presalt reservoirs hold at least 176 Bbbl, a figure that would meet five years of global demand, according to a study by the National Institute of Oil and Gas at Rio de Janeiro State University (Instituto Nacional de Óleo e Gas da Universidade Estadual do Rio de Janeiro). If true, that is one-fourth of the world’s offshore undiscovered, technically recoverable reserves, considering Rystad Energy’s most recent reserve estimates.

On top of securing reserves, M&A activity and memorandums of understanding may drive presalt activity. According to a recent Wood Mackenzie report, oil majors will focus on snagging assets instead of conventional exploration to replace reserves.

Statoil took the lead when it snagged a 66% operating share in Carcará. In addition,Total in January signed a master agreement with Petrobras, which expects to build on joint operations throughout offshore Brazil and beyond.

A round of four new presalt areas contiguous to Tartaruga Verde and Sapinhoá fields, Gato do Mato prospect and Carcará—by year-end 2017—has also been announced.

Reworking high local content requirements has been a recurrent demand of companies. Brazil’s regulator, ANP, has signaled flexibility to work around the 85% rule.

And on top of tenders, an oil rights sale could render new areas up for grabs in the Santos Basin.

Roughly between 8 Bbbl and 12 Bbbl beyond Petrobras’s share may be offered. At the same time, Petrobras is seeking partners to develop its assets.

Petrobras is also looking to sell nine shallow-water areas off the coasts of the northeastern states of Sergipe and Ceará, which awaits a final check by the Brazilian Federal Accounting Court to sign off the assets.

All in all, Petrobras is taking shots to regain profitability and market confidence. Capital spending for 2017 is set for US$19 million up from US$14.5 million in 2016.

As for the upcoming deepwater round, rebounding oil prices have set high expectations. In terms of rules and royalties, Brazil may build on the success of Mexico’s recent tender to entice investments.

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