18-07-2017

On July 5, 2017, the National Agency for Petroleum, Natural Gas and Biofuels (“ANP”) published the Pre-Tender Protocol and the draft of the agreement for the 2nd and 3rd Pre-Salt Bidding Rounds under the production sharing regime. Versions of the contract have been published which take into account situations where Petrobras does and does not exercise its preemptive right.

The Pre-Tender Protocol sets out the areas to be offered, the rules for registration and qualification in the bidding round, as well as the preliminary timetable for the round. Both the Pre-Tender Protocol and the drafts of the Production Sharing Agreements are in the public consultation phase and may be changed following receipt of suggestions which may be made before July 21, 2017.

In the 2nd round  the non-contracted unitized areas adjacent to the following prospects are being offered: Carcará (block BM-S-8), Gato do Mato (block BM-S-54) and the Sapinhoá Field, in the Santos Basin, and the Tartaruga Verde Field (shared deposit of Tartaruga Mestiça) in the Campos Basin. In the 3rd Round the areas of Pau Brazil, Peroba, Alto de Cabo-Frio and Alto de Cabo Frio-Central are being offered.

Petrobras has already declared its intention to act as operator of the Entorno de Sapinhoá  Block, offered in the 2nd Round, and of the Peroba and Alto de Cabo Frio Central Blocks, offered in the 3rd Round.

Listed below are the main points provided for in the Pre-Tender Protocol and in the draft of the Concession Contract for the 2nd and 3rd Pre-Salt Rounds.

  • Minimum percentages of oil surplus
  • Local Content

Even though it is not a criterion for the award of the offers, the contracted party must comply with the mandatory minimum percentages of global local content.

For the 2nd Round blocks, the contracted party must observe the minimum obligations for each Block. Norte de Carcará and Entorno de Sapinhoá require the contracting party to have at least 35% and 30% of national goods and services in the exploration phase and in the production/development stage, respectively. Sul de Gato do Mato requires 38% in the exploration phase, and 60% in the production/development phase. While Sudoeste de Tartaruga Verde requires 55% and 65% for the same phases.

For the 3rd Round blocks, the pre-tender protocol sets out only a single minimum percentage for all blocks. The contractor must contract 8% of local content in the exploration phase. At the production/development stage, at least 25% of national goods and services must be contracted in the construction of wells, 40% in the collection and disposal system, and 25% in the stationary production unit.

  • Signature Bonus

Bidders which are awarded as winners must pay a signature bonus which varies for each block offered. For the 2nd round, the winner will have to pay R$ 3 billion for Norte de Carcará, R$ 100 million for the Sul de Gato do Mato, R$ 200 million for Entorno de Sapinhoá and R$ 100 million for the Sudoeste de Tartaruga Verde.

For the blocks offered in the 3rd Round, the winner will have to pay R$ 1.5 billion for the Pau Brasil block, R$ 2 billion for Peroba, R$ 350 million for Alto de Cabo Frio Oeste and R$ 500 million for Alto de Cabo Frio Central.

  • Qualification as Operator or Non-Operator

To operate the blocks offered in the 2nd and 3rd Rounds, the bidder must meet economic, technical and legal criteria. Since all blocks require the bidder to be qualified as “Operator A”, a minimum shareholders’ equity (“MSE”) of R$ 152 million is required.  An Operator A is able to operate blocks in ultra-deep and deep waters (depth greater than 400 meters), shallow water (up to 400 meters deep) and onshore.

In order to be a non-operator and participate in bids as part of a consortium, a bidder must demonstrate a MSE of at least R$ 38 million.

  • Assignment

The assignment of the contract is allowed. However, in cases where Petrobras has exercised its preemptive right, Petrobras may not transfer the operatorship of the field and its minimum participation to third parties.

  • Reutilization of Documents

The pre-tender protocol provides that registration documents already submitted for a previous bid may be used again for the present bids. Therefore, there is no need to present the same documentation for participation in the 2nd and 3rd Pre-Salt Rounds, unless there has been any change.

  • Timetable

According to the Pre-Tender Protocol, the timetables for the 2nd and 3rd Pre-Salt Rounds will be the same, as below:

To participate in the bid, interested companies must (i) complete the electronic application form available on the website http://www.brasil-rounds.gov.br, (ii) pay the participation fee, (iii) present ANNEX IV of the tender protocol informing the sectors of interest, and (iv) present the other documents listed in the Pre-Tender Protocol. The application deadline ends on September 8th, 2017.

We remain available for any further clarification: 

            

http://mailchi.mp/2d1ed14b6c88/schmidt-valois-miranda-ferreira-agel-oil-and-gas-302731?e=[UNIQID].