Brazil reduces number of oil & gas licenses on permanent offer

Brazilian hydrocarbons regulator ANP has reduced the number of oil and gas licenses to be offered to the market in the first phase of its permanent offer system.

Initially the ANP intended to offer 884 blocks, but only 158 will be available, since these are the only ones that have clearance from environmental authorities. The change was announced on Wednesday, during a public meeting to discuss the new model.

Companies will be able to start expressing interest in the areas on July 19, when the tender and final draft contracts are published. Unlike Brazil's traditional rounds, the public auctions for blocks on permanent offer will only take place when a company declares its interest and backs its bid with financial guarantees. After that, the regulator will open a 90-day process to allow other companies to participate and qualify the bidders.

ANP said the other areas will be offered to the market after receiving environmental clearance and passing through a new public meeting to discuss their to the permanent offer system. According to the agency's director, Dirceu Amorelli, the areas chosen are in basins with high potential, in both mature areas and new frontier zones.

"The aim is to increase Brazilian reserves and production of oil and gas, extend knowledge about the basins, decentralize exploration investments, develop the industry of small producers and establish domestic and international companies in the country, guaranteeing demand for goods and services, as well as creation of jobs," Amorelli said in a statement published on the ANP website.