ANP holds 1st Cycle of the Permanent Production Sharing Offer on December 16

ANP will hold on December 16, in Rio de Janeiro, the public session of the 1st Cycle of the Permanent Production Sharing Offer (OPP). There will be 11 blocks on offer, four in the Campos Basin and seven in the Santos Basin.

See the blocks on offer:

Campos Basin – Agua Marinha; Norte de Brava; Itaimbezinho and Turmalina.

Santos Basin – Agata; Bumerangue; Cruzeiro do Sul; Esmeralda; Jade; Sudoeste de Sagitário and Tupinambá.

Petrobras expressed to the National Energy Policy Council (CNPE) its interest in the preemptive right in blocks to be auctioned in the Permanent Offer System, under the production sharing regime, pursuant to Law No. 12,351/2010 and Federal Decree No. 9,041/2017. The company exercised the preemptive right in relation to the Água Marinha and Norte de Brava blocks, with a percentage of 30%, considering the parameters disclosed in CNPE Resolution No. 26/2021.

Bidding under the sharing system

As provided in Law No. 12,351/10, in the sharing regime, the judgment of the bid is the most advantageous proposal according to the criterion of offering the greatest surplus in oil for the Union. The bidding notice establishes a minimum percentage of excess oil, based on which companies make their bids.

The oil surplus is the portion of oil and/or natural gas production to be shared between the Federal Government and the contracted company, according to criteria defined in the contract, resulting from the difference between the total volume of production and the portions related to royalties owed and to the cost in oil (portion of production corresponding to the company’s costs and investments in operating the field).

At this point, sharing contracts differ from concession contracts, in which the company owns all the oil and/or natural gas it produces.

In addition, under the sharing system, signature bonuses (amount paid in cash by companies that bid for areas in the bidding process) are fixed and determined in the public notice. Thus, before signing the contracts, the winning companies must pay the Union the value of the bonuses corresponding to the areas acquired by them in the round. This is yet another difference in relation to the concession regime, in which the bonus offered, based on a minimum established in the public notice, is one of the criteria for selecting the winners.

What is the Permanent Offer

The Permanent Offer is currently the main type of bidding for areas for exploration and production of oil and natural gas in Brazil. In this format, there is a continuous offer of exploratory blocks and areas with marginal accumulations located in any onshore or offshore basins.

In this way, companies do not need to wait for a “traditional” bidding round to have the opportunity to purchase a block or area with marginal accumulation, which are now permanently on offer. In addition, companies have as much time as they deem necessary to study the technical data in these areas before making an offer, without the limited deadline of a one-round public notice.

Once your registration is approved in the Permanent Offer, the company can declare interest in one or more of the blocks and areas offered in the Invitation to Bid. After approval by the Special Bidding Committee (CEL) of one or more declarations of interest, a Permanent Bid cycle begins, with the release of its schedule by the Committee. The cycles correspond to the holding of public sessions for the presentation of bids for one or more sectors that had a declaration of interest. On the day of the public session, registered companies can make bids for blocks and areas with marginal accumulations in the sectors being auctioned in that cycle.

Permanent Concession Offer (OPC) and Sharing Offer (OPP)

Three cycles of the Permanent Offer have already been carried out under the concession regime. Investments proposed in the 1st Cycle, carried out in 2019, exceeded BRL 320 million. In the 2nd cycle, in 2020, and in the 3rd cycle, in 2022, the proposed investments exceeded R$ 160 million and R$ 406 million, respectively. The collection of signing bonuses as a result of the signing of contracts signed under the Permanent Concession Offer modality exceeded R$ 500 million, with the amounts of R$ 79 million collected between the years 2019 and 2021 and R$ 422, 21 million in 2022.

Until December 2021, the Permanent Offer was carried out exclusively under contracting by concession. This limitation was overcome after the publication, on 12/24/2021, of Resolution nº 27/2021 of the National Energy Policy Council (CNPE), which establishes that fields or blocks in the Pre-salt Polygon or in strategic areas may be tendered in the Permanent Offer system upon specific determination by the CNPE, with definition of the parameters to be adopted for each field or block. In these cases, the bidding will be under the production sharing regime.

Thus, there are now two modalities of the Permanent Offer: the Permanent Concession Offer (OPC), which has already had three cycles; and the Permanent Production Sharing Offer (OPP), now in its 1st Cycle.

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