Brazilian Permanent Offer on Shallow Waters and Onshore fields
The Permanent Offer is a process of Permanent Offering of areas for exploration and production of oil and natural gas.
It provides for the continuous supply of fields and blocks returned (or in the process of being returned) to ANP, as well as exploratory blocks offered in previous rounds and not sold.
In this mode, the registered bidders may submit a declaration of interest for any blocks or areas provided for in the notice, accompanied by a bid guarantee.
The main difference from the other rounds is that a Permanent Bid cycle only starts when the Special Bidding Commission (CEL) approves a declaration of interest, accompanied by the bid guarantee, for one or more blocks / areas on offer, presented by one of the registered companies.
The Cycles
As set forth in the Public Notice the Permanent Offer Cycles correspond to the holding of the public offer presentation sessions for one or more sectors that have had a declaration of interest.
Such cycles begin with the disclosure of their schedule, upon approval by ANP of one or more declarations of interest, accompanied by a guarantee of offer, presented by registered companies. With the opening of the cycle, the following deadlines begin:
- Within 30 days, companies not yet enrolled in the Permanent Offer may apply to take part in the bid;
- Within 70 days, the companies already registered may submit a declaration of interest, with guarantee of offer, to the sector that originated the cycle or any other sector contained in the Notice;
- Within 90 days, the ANP holds the public session, in which all blocks and areas with marginal accumulations of the sectors that received a declaration of interest are offered.
As a result of the 1st Cycle of the Permanent Offer, occurred last September, the Brazilian National Petroleum Agency (ANP) estimates that there will be 10 new independent operators producing onshore fields in the country, reaching a total of 25 independent onshore operators, besides Petrobras.
There were 45 auctioned areas, including exploratory blocks and areas with marginal accumulations, being only 3 offshore blocks on shallow waters. This implies that 97% of the total investments guaranteed - corresponding to R$ 312 million - will be destined to the onshore blocks.
The Permanent Offer represents a new and successful bidding model, which permanently offers a portfolio of blocks and areas with marginal accumulations to interested companies.
The objective is to encourage the exploration and production of oil and natural gas in onshore basins of Brazil and to increase the participation of small and medium-sized companies in the domestic market.
33 onshore exploratory blocks have been auctioned in the Sergipe-Alagoas, Parnaíba, Potiguar and Recôncavo basins, and also 12 areas with marginal accumulations in the Potiguar, Sergipe-Alagoas, Recôncavo and Espírito Santo basins.
For exploratory blocks, the total bonus collected reached the amount of R$ 15.32 million (average goodwill of 61.48%) and there is a forecast of R $ 309.8 million in investments. For areas with marginal accumulations, the total bonus was R$ 6.98 million (goodwill of 2,221.78%), with a forecast of R $ 10.5 million in investments.
The Permanent Offer brought the consolidation of this new bidding model, which permanently offers a portfolio of blocks and areas with marginal accumulations for oil and natural gas exploration and production. Thus, companies, especially those not yet in Brazil, have the opportunity to study these areas without the time limitations that traditional rounds provide.
Unfolding of the Process
On the day of the public session, the registered companies may bid for blocks and areas with marginal accumulations in the bidding sectors in the Open Permanent Offer cycle. In the case of exploratory blocks, the offers are composed of signature bonuses (equal to or greater than the minimum bonus determined in the announcement) and Minimum Exploratory Program (PEM), containing the activities that companies undertake to perform during the exploratory phase (such as drilling). wells and seismic production, for example).
In case there is more than one offer for the same block, the winner will be the company or consortium that achieves the highest score, with the signing bonus weighing 80% and PEM 20%.
For areas with marginal accumulations, the only criterion for determining the winning bid is the signature bonus offered, which must also be equal to or greater than the minimum determined in the notice.
Areas with marginal accumulations selected for the Permanent Offering are located in mature basins and are intended to provide opportunities and increase the participation of small and medium sized companies in exploration or rehabilitation and production of oil and natural gas in densely exploited basins. , enabling the continuity of these activities in the regions where they play an important socioeconomic role.