The Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) published, on July 19, 2017, the bid notice of the 14th Bid Round of Exploratory Blocks.
Two hundred and eighty seven (287) exploratory blocks will be offered, which are located in the following basins: Parnaíba, Potiguar (onshore), Recôncavo, Sergipe-Alagoas (onshore and offshore), Espírito Santo (onshore and offshore), Paraná, Santos, Pelotas and Campos.
Brazilian or foreign legal entities, separateley or joined together in a consortium, and private equity funds (FIPs), in the condition of non-operator, will be authorized to participate in the 14th Bidding Round, and will be only authorized to present the offers in the consortium
Amongst the relevant topics presented in the corresponding bid notice and contract draft stand out:
(i) incentive to private- investment funds activity
(ii) adoption of single exploration phase
(iii) removal of local content as a criteria of verification of offers, that started to be judged based on Signing Bonus (criteria with weight of 80%) and Minimum Exploratory Program (PEM) (criteria with weight of 20%);
(iv) inclusion of a new provision of extinction of the concession contracts in case the concessionaire fails to deliver the Development Plan (DP), within the time limit set out ou in case the DP presented is not approved by the agency;
(v) establishment of a minimum percentage of global local content at the percentage of:
(a) for the exploration phase of onshore blocks;
(b) 18% for exploration phase of offshore blocks with water depth above 100 meters;
(c) 50% for development phase of onshore fields;
(d) for development pahse, in offshore fields, with water detph above 100 meters: 25% for construciton of well, 40% for system of collection and flow of production, and 25% for stationary unit of production;
(vi) differentiated royalties for new frontier areas and mature basins with greater risks;
(vii) reduction of minimum owner’s equity (PLM) for non-operators (investors), who should henceforth evidence a PLM of 25% over the following values in order to partcipate in offers in the consortium regime in the respective areas of interest: R$152 million for blocks in ultra-deep waters, deep waters, shallow waters (Operator A); and R$68 million for blocks in shallow waters and land areas (Operator B), and R$5,5 million for blocks in land areas (Operator C).
It is important to point out also that the approved bidder for pariticpating in the bidding process must present guaranties of offer in the value and modality defined in the bidding notice, before the public session of presentation of the offers, so that they be albe to present the offers in the bidding process. The guarantees of offer can be provided in the following modalities: (i) letter of credit; (ii) performance bond, and (iii) cash bond
The bidding process must abide by the scheduled laid down in the bid notice, being worth highlighting the following stages:
a) End of the term for filling out the enrollment form, delivery of enrollment documents, and payment of the participation fee - 04/08/2017;
b) Deadline for presentation of gurantees of offer - 12/09/2017;
c) Public Session of presentation of offers - 27/09/2017;
d) Time for delivery of qualification documents ( winning bidder) - 02/10/2017;
e) Deadline for payment of the signing bonus and submittal of the its respective payment evidence by 22/12/2017;
f) Signature of concession contracts - by 31/01/2018.