ANP publishes Round 5 bidding rules

Brazil's oil regulator ANP has published bidding rules for the Round 5 auction of exploration license concessions to be held on August 19-20. The ANP said it has made some changes to bidding rules from previous years due to the new format of the auctions. The size of blocks has been reduced considerably and companies will now be able to bid on groups of blocks. To encourage more banks to provide letters of guarantee, the ANP has reduced the minimum capitalization requirement for banks to 500mn reais from 1bn reais. So far 14 companies have expressed interest in participating, of which 10 are foreign and two are newcomers to the Brazilian market, the ANP said. The ANP will receive prequalification documents until July 17, one month before the auction. Matthew Shaw, senior consultant at UK-based Wood Mackenzie, said Round 5 is likely to be more attractive for smaller oil companies looking at onshore and shallow water blocks, whereas the big players in the deep water are less excited. "The acreage available (in deepwater) is not particularly exciting. Most people would probably agree that the best deepwater acreage is already licensed either to Petrobras or in the first four rounds," he told BNamericas. "A lot of people have written off Round 5 (for deepwater) and are waiting to see what becomes available in Round 6," he said.