The government intends to offer large blocks on land, up to 36 thousand km², in addition to reducing costs and entry barriers for contracting exploration areas. The proposals are the result of Reate, the Oil and Natural Gas Exploration and Production Activity Revitalization Program in Onshore Areas.
– The program was created in 2017, under the government of Michel Temer, and continued at Reate 2020. The ANP studies and guidelines proposed by the Ministry of Mines and Energy entered into public consultation for 30 days.
– The understanding is that the offer of large areas, which are called “regional blocks” will increase the attractiveness due to the greater volume of data available, the possibility of multiple discoveries and the ease of hiring, in comparison with the investment to acquire several smaller blocks.
– ANP studies took into account not only geological data and oil potential, but the existing infrastructure, including gas pipelines, transmission lines and roads, for example.
– Initially, regional blocks with an area ranging from 7 thousand to 36 thousand km² suitable for supply were identified: AM-OP-01 and AM-OP-02, in the Amazonas Basin; PAR-OP-02 and PAR-OP-03, in the Paraná Basin; PN-OP-01 and PN-OP-02, in the Parnaíba Basin; and SOL-OP-01 and SOL-OP-02, in the Solimões Basin.
– For comparison, the blocks currently delimited in the new frontier areas (greater exploratory risk), such as those offered in the permanent offer, reach around 3 thousand km². In basins with known systems, the standard is 30 km².
Other proposals are the reduction of investment guarantees for bids, prioritize the acquisition of data and change the approval of exploratory plans (successive phases, according to the confirmed results) and charge amounts for the retention of area close to the minimum.
– MME also talks about requiring bonuses for signing contracts that do not discourage the contracting of blocks: “in the“ regional block ”model, with large dimensions, care must be taken to adjust the procedure so as not to establish prohibitive values , that end up ruling out potential interested in investing in the exploration of these basins ”.
In parallel, the ANP receives contributions for the rules of royalty reduction for small and medium-sized companies – the draft provides for the collection of a rate of 5% (legal floor) to 7.5%.
– The idea is to reduce costs for companies in exchange for increasing the volume of investment and, therefore, greater production. In the end, the expectation is that the collection of royalties will be practically tied. More on the ANP website.
Source: epbr
Brazil Energy Insight 
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