Brazil to Launch Pre-Salt Bid Rounds Oct 27
Brazil's upstream regulator ANP said the second and third pre-salt bidding rounds will be held October 27 and offer blocks on a production-sharing basis. State Petrobras however has pre-emption rights to operate the blocks.
The regulator will be hoping to capitalise on the popularity and demand illustrated in Brazil's latest offshore licensing round held last month.
As ever this time around, winning companies will be the ones that offer Brazil the largest portion of the profit oil and gas. It is expected that the eight blocks offered in the bidding rounds will generate $36bn in investments, it said. Moreover, the development of the reservoirs should provide about $130bn in royalties, profit oil and income tax.
Signature bonuses are settled for both bidding rounds and the profit oil reserved to the government is the only criterion for picking winners, it said. The bids will be judged and ranked according to the descending order of the government's share of the profit oil.
According to the legislation, Petrobras has the pre-emptive right to act as operator in the pre-salt blocks. In a consortium, the operating company is accountable for the conduct and execution of all activities established in the contract.
Petrobras chose to be the operator with 30% share in the block bordering Campo de Sapinhoa in the second round, and the Peroba and Alto de Cabo Frio – Central blocks in the third round.
In these three cases, Petrobras will set up a consortium with the winning bidder, if the percentage of the profit oil offered to the government is equal to the minimum percentage defined by the tender protocol.
It must also decide within 30 minutes whether to join the winning bidder, in case the percentage of the profit oil offered to the government is higher than the minimum percentage established in the tender protocol. If Petrobras decides not to join in, then the winning bidder – or consortium – will take 100% of the block and announce operatorship and the new share percentages.
ANP said it can extend the time period for submitting bids for blocks not bid for during in the two rounds, in order to allow a second chance of being contracted for.
William Powell