Sept 120, 2019

The National Agency of Petroleum, Natural Gas and Biofuels (ANP) inaugurates a new type of auction, the permanent offer, which will function as a kind of offer on demand of oil and gas areas for oil companies.

The first test of this new model will offer, 273 exploratory blocks and 14 inactive areas with marginal accumulations. In all, 47 small, medium and large companies in the sector are registered to participate in the bidding.

The permanent offer is a new mechanism whereby the regulatory body makes available permanently a package of assets for purchase on demand. Low production fields, returned to the Union by former concession holders, and exploratory blocks offered in previous auctions, but not sold, are part of this package.

Through the new mechanism, this menu of assets is available for companies, at any time, to express their interest in acquiring the offered areas. If there is interest from the companies, the ANP calls a public bidding session, so that other companies can compete for the areas. In this case, the regulatory agency offers not only that asset that has aroused interest, but all areas that are within that sector, that is, the regions that concentrate the blocks that aroused interest.

With the permanent offer, oil companies do not have to wait for bidding rounds to have opportunities for acquisition. One of the main attractions of this new model, according to the ANP, is that it allows companies to study the selected areas for a longer period. In a conventional round, geologists usually have a limited timeframe for assessing available areas. They now have a perspective of continuous asset offering.

Most of the assets made available by the ANP in the permanent offer are onshore. The agency’s intention is to end the bidding rounds of onshore areas and only offer them through the new mechanism. In a first cycle the oil companies will be able to bid on about 290 assets located in the Parnaíba (MA / PI), Potiguar (RN), Recôncavo (BA) and Espírito Santo (ES) basins. The menu of areas available in the permanent offering, however, is currently 600 blocks. The intention of the regulator is to raise this number to about 2,000 assets.

If all assets offered are traded on Tuesday, based on the minimum signature bonus, the Union could raise R$ 296 million – much lower than those involved in pre-salt and deepwater rounds. The ANP’s expectation, however, is not in the potential of collecting from the permanent supply, but to boost, above all, the oil and gas industry. ANP Director-General Décio Oddone is optimistic.

“We will be much more successful than expected in the permanent offer. We imagined [initially] that there would be interest in just one sector and we are offering 15. Funding is not the focus of this round because the signing bonuses are lower. These are areas that have been auctioned in the past and were returned. The focus is on attracting investments. And I think from the point of view of attracting investment and resuming onshore activities, it’s going to be spectacular, ”said Oddone, in a recent press statement.

Source: Valor

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