On March 29, 2018, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) held the 15th Bid Round for oil and natural gas exploration. This Round offered 70 blocks in the sedimentary basins of Ceará, Potiguar, Sergipe-Alagoas, Campos and Santos and in the terrestrial basins of Parnaíba and Paraná, with a total area offered of 94.6 thousand km².

The basins in the 15th Round were selected for having high potential and for being new frontiers, with the objective of expanding Brazilian oil and natural gas reserves and production and increasing knowledge about sedimentary basins.

In the 15th Round, 22 maritime blocks of the 47 offered were acquired, earning more than R$ 8 billion in signature bonuses, which set a record for rounds in the concession regime. The Round is expected to generate investments of at least R$ 1.2 billion, in the first phase of the concession contracts.

The Round also had the block with the biggest signature bonus offered in history, according to the ANP: the maritime block CM-789, located in the SC-AP5 sector of the Campos Basin, was won with a signature bonus of R$ 2.82 billion offered by a consortium formed of ExxonMobil Brasil (40% – Operator), Petrobras (30%) and QPI Brasil (30%). However, no offers were made for the land blocks offered.

In the auction, 13 companies participated, of which 2 were domestic companies and 11 were foreign companies.

The total area acquired was 16,400.30 km², with blocks distributed in 7 sectors of the sedimentary basins of Santos, Potiguar, Campos, Ceará and Sergipe-Alagoas.

THE TENDER PROTOCOL AND MODELS OF THE CONTRACTS OF THE 4th PRE-SALT BID ROUND HAVE BEEN PUBLISHED

On April 5, 2018, the ANP published the Tender Protocol and the Models of the Production Sharing Contracts of the 4th Pre-Salt Bid Round under a production sharing regime. Alternative contract versions have been published which take into consideration whether or not Petrobras exercises its preemptive right.

Originally the areas of Itaimbezinho, Três Marias, Dois Irmãos, Saturno and Uirapuru in the Campos and Santos basins were to be offered. However, by determination of the Ministry of Mines and Energy (MME), contained in Official Letter No. 191/2018/GM-MME, dated April 4, 2018, the ANP removed the Saturno block, located in the SS-AUP1 sector of the basin of Santos, from this 4th Round.

Offer composition

The composition of the offer is made up only by the indicating the percentage of oil surplus for the Federal Government, subject to the minimum percentage indicated in the Bid Notice for each of the blocks, as below.

4th Pre-Salt Bid Round
Basin Block Minimum percentage of oil surplus (%)
Santos Três Marias 8,32
Uirapuru 22,18
Campos Itaimbezinho 7,07
Dois Irmãos 16,43

 

Local content

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

For the 4th Round, the contracted party must observe the minimum obligations for each block. The Contract Model provides that it is necessary to contract at least 18% of national goods and services in the exploration phase and, at in the production/development stage, the contracting of at least 25%, 40% and 25% is required for the Macrogroups of Well Construction, Production Collection and Drainage System, and the Production Stationary Unit, respectively.

Signature Bonus

Winning bidders must pay a signature bonus which varies for each block offered. It was defined in the Bid Notice that the portion of the signature bonus destined to PPSA will be up to R$ 50,000,000.00.

Qualification as Operator or Non-Operator

In order to operate the blocks offered in the 4th Round, the bidder must meet certain 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. In order to be a non-operator and to 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, it may not transfer the operatorship of the field and its minimum participation to third parties.

To participate in the bid, interested companies must (i) complete the electronic registration form available at http://rodadas.anp.gov.br/pt/, (ii) pay the participation fee, (iii) submit the documents for the technical, economic-financial, legal qualifications and proof of fiscal and labor regularity.

 

https://mailchi.mp/cc27cdace20b/schmidt-valois-miranda-ferreira-agel-oil-and-gas-485995?e=707f3fcf5d