Brazil looking to make oil and gas bidding rounds more attractive

The Brazilian government is working to enhance the attractiveness of its oil and gas bidding rounds in a year that is likely to end without a tender for contracting exploration and production licenses, 

Sector regulator ANP has now made several modifications to the rules of its open acreage program, which has a continuous offering of exploration blocks and areas with marginal accumulations located in any onshore or offshore basin.

PRODUCTION SHARING 

On Friday, the ANP launched a 45-day public consultation for the new versions of the tender notices and contracts that will be used in the production sharing open acreage program. A public hearing will also be held on December 11.

After the consultation period and the hearing, the documents will be reviewed by federal audit court TCU. 

Among the proposed changes are adjustments to local content guidelines, the insurance-guarantee models and the system for complying with the minimum exploratory program, which no longer requires the drilling of an exploratory well and also provides for the possibility of carrying out 3D seismic activities and 3D seismic reprocessing.

The ANP also suggests excluding the payment of participation fees and sample data, and the possibility of bidders submitting bid guarantees without a declaration of interest. 

Another proposal involves new industry practices aimed at reducing greenhouse gas emissions.

The draft documents set out modified bidding rules for 14 pre-salt blocks: Ágata, Esmeralda, Jade, Turmalina, Ametista, Amazonita, Citrino, Itaimbezinho, Jaspe, Larimar, Mogno, Ônix, Safira Leste and Safira Oeste. 

Petrobras has told the energy policy council (CNPE) that it is interested in the right of first refusal for the Jaspe block, with a minimum stake of 40%. With this, the national oil company becomes the operator of the asset, regardless of the outcome of the auction.

Earlier this month, Petrobras informed the ANP that it has no interest in exercising its right of first refusal for the Rubi and Granada offshore production sharing blocks.

To be included in future open acreage production sharing bidding, both assets are awaiting opinions from the environmental regulator Ibama, the environment ministry, and the mines and energy ministry, according to the ANP.

CONCESSIONS 

On Thursday, the ANP approved the updated tender notices and draft concession contracts for blocks and areas with marginal accumulations in the open acreage concession program.  

After a public consultation and hearing, the changes are now being evaluated by the TCU, which has up to 90 days for its assessment.

The new rules are scheduled to be published in January next year, with 404 new frontier exploration blocks to be offered, 54 onshore and 350 offshore, in 12 sedimentary basins.

Among the key modifications are:

– Adjustments resulting from changes to the local content guidelines set out in CNPE resolution 11/2023;

– Adjustments resulting from the publication of ANP resolution 969/2024, which regulates bids for the granting of oil and gas exploration, rehabilitation and production under the concession and production sharing regimes;

– Updating of the guarantee insurance models resulting from public consultation and hearing 01/2024;

– Exclusion of participation fee and data sample payments;

– The possibility of more than one company acting as the guarantor for consortium bids and allowing the bidder to submit a guarantee without a declaration of interest;

– Establishment of a fixed minimum signature bonus for all blocks located in mature and new onshore frontier basins;

– Adjustment of the delimitation of blocks by taking into account a broader socio-environmental criteria;

– Adjustments to the conditions under which seismic reprocessing can be converted into work units for the purpose of complying with the minimum exploratory program (PEM).