BRAZIL ANNOUNCES NEW BID ROUNDS FOR 2018

Transcription

1 BRAZIL ANNOUNCES NEW BID ROUNDS FOR 2018 On November 24, 2017, the Brazilian Official Gazette of the National Energy Policy Council ( CNPE ) published Resolution Nos. 17, 21, and 22. Resolution No. 22 authorized the National Agency of Petroleum, Natural Gas, and Biofuels ( ANP ) to hold the 15 th bid round for the exploration and production of oil and natural gas under the concession regime. The public bid session is scheduled to take place on March 29, Resolution No. 21 authorized the fourth Pre-Salt bid round under the production sharing regime. The public bid session is tentatively scheduled for June 7, The ANP plans to release the first draft of the Pre-Tender Protocol for the production sharing regime in January Lastly, Resolution No. 17 authorizes the ANP to offer certain fields and blocks on a permanent basis. Each resolution is highlighted below. I. RESOLUTION 22: PRE-TENDER PROTOCOL FOR THE 15 TH BID ROUND 1. Blocks: The 15 th bid round will offer 70 blocks: 2. Timeline: 49 in the Ceará, Potiguar, Sergipe-Alagoas, Campos, and Santos offshore basins (including two blocks adjacent to Saturno); and 21 in the Paraná and Parnaíba onshore basins. Event Date Publication of the Pre-Tender Protocol and the model concession 12/07/2017 Beginning of the period for completing the registration form, delivery of registration documents, and payment of the 12/07/2017 participation fee Release of the technical data package 12/07/2017 End of the public consultation period and final deadline for comments on the Pre-Tender Protocol and the model concession 12/18/2017 Public hearing (city of Rio de Janeiro) 12/21/2017 Publication of the Pre-Tender Protocol and the model concession 01/25/2018 Technical seminar 01/31/2018 Environmental, legal, and tax seminar 02/05/2018 Deadline for completing the registration form, delivery of registration documents, and payment of the participation fee 02/07/2018

2 Deadline for the presentation of offer guarantees 03/08/2018 Public session for delivery of bids 03/29/2018 Deadline for submission of qualification documents (for the winning bidder) Award of the concession and ratification of the bids Deadline for delivery of documents regarding: (i) signature of the concession agreements and (ii) qualification of the affiliate intended to sign the, if applicable Deadline for payment of the signature bonus and to send proof of payment Signature of the concession 04/13/ /13/ /11/ /11/ /30/ Offer Criteria: The bids will be judged according to the following criteria: (i) a signature bonus representing 80%, and (ii) a Minimum Exploratory Program representing 20%. The above blocks could potentially generate up to R$4.846 billion (approximately US$1.474 billion) in signature bonuses for the Brazilian government. 4. Required Guarantee Instruments: To ensure that a bidder is able to comply with the Minimum Exploratory Program, it must submit at least one of the following guarantee instruments to the ANP: (i) a letter of credit; (ii) an insurance guarantee; (iii) an oil pledge (a guarantee to supply the ANP with a certain percentage of production from another field owned by the bidder); or (iv) a collateral deposit guarantee (exclusively required for bids on the onshore blocks). Such instruments may be aggregated and should be in the forms set out in the bid document. 5. Percentages of Local Content: While not required for bid selection, the concessionaire must comply with the following mandatory percentages of local content: (i) 50% in the exploration phase and development stage for onshore blocks; (ii) 18% in the exploration phase for offshore blocks with water depths of more than 100 meters; (iii) 25% for well construction; (iv) 40% for systems for production, gathering, and evacuation; and (v) 25% for stationary production units during the development stage of offshore fields with water depths of more than 100 meters. 6. Government Participations: According to the Pre-Tender Protocol, the Government participation includes: (i) a signature bonus; (ii) royalties (the ANP has designated royalty percentages of 5%, 7.5%, and 10%, depending on the sector and location of the block); (iii) special participation; and (iv) payment for the occupation or retention of the area. 7. Additional Requirements: A bidder must be qualified by the ANP and comply with economic, technical, and legal criteria, which vary depending on the location of the block. There are also various minimum net worth ( MNW ) requirements: A bidder must demonstrate a MNW of at least R$152 million (approximately US$46.2 million) to qualify as an Operator A and submit bids for blocks in ultra-deep and deep water (depth greater than 400 meters), shallow water (up to 400 meters deep), and onshore; 2

3 A bidder must demonstrate a MNW of at least R$68 million (approximately US$20.7 million) to qualify as an Operator B and offer bids for blocks in shallow water and onshore; A bidder must demonstrate a MNW of least R$5.5 million (approximately US$1.7 million) to qualify as an Operator C and offer bids for onshore areas; and A bidder must demonstrate a MNW of at least 25% of the values indicated above for each area of interest in order to be a non-operator and participate in consortium bids. II. RESOLUTION NO. 21: APPROVAL OF THE FOURTH PRE-SALT ROUND The ANP will offer the following five blocks located in the Campos and Santos basins: Block Federal Government Oil Surplus Percentage Signature Bonus (R$) (approximate US$) Itaimbezinho 7.07% R$50 million (US$15.23 million) Três Marias 8.32% R$100 million (US$30.41 million) Saturno 14.12% R$1.45 billion (US$441 million) Uirapuru 22.18% R$2.65 billion (US$806 million) Dois Irmãos 16.43% R$400 million (US$122.6 million) The areas adjacent to the Saturno block will be available under the concession regime as noted above. New concessionaires and ors will be required to enter into unitization arrangements for each area. III. RESOLUTION NO. 17: AREAS FOR PERMANENT OFFERS Resolution No. 17 authorized the ANP to designate certain fields and blocks as permanently available for acquisition (outside of the typical bidding rounds), including fields and blocks with discoveries that have been relinquished or are in the process of being relinquished and blocks that were previously offered, but were not acquired. The ANP selected 846 blocks from 13 sedimentary basins, totaling approximately 285,400 km²: Mature basins: Recôncavo, Potiguar Terra, Sergipe-Alagoas Terra, and Espírito Santa Terra; Onshore basins on the new frontier: Acre, Amazonas, Paraná, Parnaíba, São Francisco, and Tucano; Offshore basins: Pará-Maranhão, Sergipe-Alagoas, Campos, and Santos; and Areas with marginal accumulations: 15 areas in the onshore basins of Espírito Santo, Potiguar, and Recôncavo. o But note: The ANP has canceled the previously-scheduled fifth and sixth rounds in areas with marginal accumulations. These areas will instead be designated as permanently available for acquisition. 3

4 The ANP will announce the rules for the participation and the technical and economic parameters of the areas available for permanent offer by the end of April Bid submission sessions are expected to occur after November Blocks or fields located in pre-salt or strategic areas will not be included in this offer. IV. SUMMARY OF THE PREVIOUS ROUNDS Twenty companies participated in the 14 th bid round for blocks tendered under the concession regime. Seventeen companies acquired blocks (10 national companies and seven foreign companies). Of the 287 blocks tendered, only 37 were acquired approximately 13%. Nonetheless, the 14 th round generated the greatest total signature tender bonus in ANP history, exceeding R$3.8 billion (approximately US$1.16 billion). The consortium formed by Petrobras (50% operator) and ExxonMobil (50%) presented the two largest offers: (1) block CM-346 for R$2.24 billion (approximately US$681.3 million) and (2) block CM-411 for R$1.2 billion (approximately US$365 million). Together, these offers accounted for 95% of the amount collected. 1. Second Round of the Pre-Salt: Four blocks were offered with reserves that are subject to being unitized, and three blocks were acquired, generating R$3.3 billion (approximately US$1 billion) in signature bonuses and R$304 million (approximately US$92.5 million) in investments under the Minimum Exploratory Program. Petrobras exercised its right to be operator in the Entorno de Sapinhoá block. The following blocks were acquired: Block Winning Companies Oil Surplus Percentage Sul de Gato do Mato Operator: Shell Brasil (80%) 11.53% Total E&P do Brasil (20%) Entorno de Sapinhoá Operator: Petrobras (45%) 80% Norte de Carcará Shell Brasil (30%) Repsol Sinopec (25%) Operator: Statoil Brasil O&G (40%) Petrogal Brasil (20%) ExxonMobil Brasil (40%) 67.12% 2. Third Production Sharing Round: Three of the four blocks offered were sold. This generated R$2.85 billion (approximately US$867 million) in signature bonuses and R$456 million (approximately US$138.7 million) 4

5 in investments for the Minimum Exploratory Program. Petrobras exercised its right to be operator in the Peroba and Alto de Cabo Frio Central blocks. The following blocks were acquired: Block Winning Companies Oil Surplus Percentage Peroba Operator: Petrobras (40%) 76.96% CNODC Brasil (20%) BP Energy (40%) Alto de Cabo Frio Oeste Operator: Shell Brasil (55%) 22.87% Alto de Cabo Frio Central CNOOC Petroleum (20%) QPI Brasil (25%) Operator: Petrobras (50%) BP Energy (50%) 75.86% CONTACTS For more information on the topics discussed in this Client Alert, please contact one of the attorneys listed below. Thompson & Knight LLP Andrew B. Derman Andrew Melsheimer Schmidt, Valois, Miranda, Ferreira & Agel Paulo Valois Pires This Client Alert is sent for the information of our clients and friends. It is not intended as legal advice or an opinion on specific circumstances and is not intended or written to be used, and may not be used, by any person for the purpose of avoiding penalties that may be imposed under United States federal tax laws Thompson & Knight LLP 5