Brazil O&G Permanent Offer – Tender Protocol and Concession Contracts

On July 20, 2018, following a period of public consultation, the National Agency of Petroleum, Natural Gas and Biofuels ("ANP") published the tender protocol of the Permanent Offer of areas under the concession regime for exploration or rehabilitation and production of oil and gas (“Tender Protocol”), as well as the concession contract models for (i) blocks with exploratory risk and (ii) areas with marginal accumulation.

The guidelines for the Permanent Offer of areas were established by Article 4 of CNPE Resolution No. 17 of June, 2017, in which the National Energy Policy Council (“CNPE”) authorized the ANP to offer non-awarded or relinquished areas from past bid rounds, with the exception of fields or blocks in the pre-salt area or other strategic areas.

In accordance with the Tender Protocol, 148 onshore and offshore exploratory blocks will be offered from 20 sectors located in the basins of Campos, Ceará, Paraná, Parnaíba, Potiguar, Recôncavo, Santos e Sergipe-Alagoas. The remaining blocks and areas listed in the Tender Protocol Draft will be included in the Permanent Offer once the relevant studies, assessments and environmental opinions are issued and after the public hearing is held.

The registration procedure for the interested companies has been open since May 2 of this year and, with the publication of the Tender Protocol, the companies can already present the bid guarantees together with the declaration of interest indicating the sector(s) that they intend to bid on, as detailed in the schedule below:

The approval of the first bid guarantee accompanied by a declaration of interest will initiate the cycles of the Permanent Offer, which correspond to the public sessions for the presentation of offers for the respective sector or sectors. It is important to mention that a period of 90 days between such approval and the public session will be observed. 

Following the disclosure of the bid guarantee and the declaration of sector(s) of interest, the Special Bidding Committee (“CEL”) will inform the deadlines for registration requirements and for the submission of bid guarantees and declaration of interest, in order to allow the interested companies that have not yet registered and/or have not submitted the bid guarantees and the declaration of interest, to carry out the necessary procedures.

After the public session for presentation of offers, the winning bidders shall pass through a qualification process. CEL will also disclose the dates related to (i) the qualification of the winning bidders, (ii) award process and ratification of the bidding, and (iii) signing of the concession contracts.

Tauil & Chequer Advogados in association with Mayer Brown will follow the developments of this new model closely and will keep its clients informed.