Opportunities | Major Oil & Gas Opportunity in Brazil

Opportunities | Major Oil & Gas Opportunity in Brazil

The Brazilian Government has announced its plans to hold the Production Sharing bidding round for the Surplus Volumes of Oil, Natural Gas and other Fluid Hydrocarbons, on October 2019, regarding the Atapu, Búzios, ltapu and Sépia areas in the Santos Basin.

In 2010, Federal Law authorized the Government to enter into a “Transfer of Rights Agreement” with Petrobrás, granting the state-owned oil company the right to extract up to five billion barrels of oil equivalent from areas located in the pre-salt layer that had not been granted to other companies. Given the existence of surplus volumes of oil, natural gas and other fluid hydrocarbons in the aforementioned areas, the National Council for Energy Policy authorized the National Agency of Petroleum, Natural Gas and Biofuels to hold the bidding round. 

The signing bonus to be paid to the Federal Government for the agreements regarding the four areas amounts to 106.561.000.000,00 BRL (circa 25 billion US Dollars). 

Petrobrás announced on May 21, 2019 that it chose to exercise its right of first refusal to act as operator for the Búzios and Itapu areas, meaning that the company shall form a consortium – with a minimum participation of 30% – with the winning bidder for those two areas. Búzios and Itapu have the highest and lowest signing bonus, respectively. Petrobrás still may participate in the bid for the Atapu and Sepia areas in equal footing with other bidders.

The judgment criterion for the bids is the percentage of profit sharing between the bidder and the Brazilian Government (taking into account some pre-defined technical and economic parameters). The minimum bids have been set at 26,23% for Atapu, 23,24% for Búzios, 18,15% for Itapu and 27,88% for Sépia. 

The tender documents for this round of bidding have not yet been published, as, firstly, they shall undergo public hearings and public consultation. But, again, the bid is expected for October 2019.

For more information, please contact our Infrastructure Department: Frederico Bopp Dieterich or Bruno Vianna Espirito Santo.