BRAZIL GOVERNMENT CREATES PROGRAM TO MODIFY RULES FOR NEXT OIL AND GAS AUCTIONS

Apr 14, 2020

The federal government created a new program that aims to modify the rules of the next auctions for oil and gas fields in Brazil. The information is contained in a decree published in today’s edition of the Diário de Oficial da União. The text says that the objective is “to increase the competitiveness and attractiveness of the areas to be offered in the bidding rounds for exploration and production of oil and natural gas” .

The initiative is called the Program for the Improvement of Bids for Exploration and Production of Oil and Natural Gas (BidSIM). Petronotícia had already announced, in November last year, the government’s intention to review the methodology of the next oil and gas tenders to be held in Brazil.

At that time, the Minister of Mines and Energy, Bento Albuquerque, even commented that one of the measures that would be being analyzed is the extinction of the sharing model. Albuquerque declared that the government was studying the issue, but the Executive branch had decided to work the issue together with the National Congress.

In March, the Minister of Economy, Paulo Guedes, sent to the heads of the Chamber, Rodrigo Maia, and of the Senate, Davi Alcolumbre, a request for the bill, by Senator José Serra, that changes the rules involving the sharing regime , gain priority status. These government movements took place shortly after the last two auctions held (Transfer of Rights and 6th Round of Sharing) registered little appetite for parts of international companies.

In the decree published today, signed by President Jair Bolsonaro and ministers Albuquerque and Guedes, the government also instituted the creation of an inter-ministerial executive committee to propose improvements in the governance and methodology of the rounds of oil auctions. The group will have 180 days to conclude its work, which may be extended once for an equal period.

Source: PetroNoticias

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