On May 18, 2017, the National Agency of Petroleum, Natural Gas and Biofuels (“ANP”), published the tender protocol draft for the 14th Bid Round for exploratory blocks under the concession regime, with the objective of establishing the procedures and rules for participating in the bid, as well as making available the concession contract draft, the preliminary schedule, and the information regarding the offered areas.

The 14th Bid Round encompasses 287 blocks (onshore and offshore), located in 29 sectors and 9 Brazilian sedimentary basins: Parnaíba, Potiguar, Recôncavo, Sergipe-Alagoas, Espírito Santo, Paraná, Santos, Pelotas and Campos.

According to the schedule of the tender protocol draft, the technical data package is already available, and for those who are interested in accessing, it is required to: (i) fill out an electronic registration form; (ii) present proof of payment of the participation fee, in accordance with the specific sector; and (iii) submit the term of confidentiality provided in the tender protocol draft, the corporate documentation, and power-of-attorney granted to the accredited representative before ANP. Below you will find the schedule:

Event

Date

Publication of tender protocol draft and concession agreement draft

05/18/2017

Commencement of period for filling application forms, delivery of application documentation and payment fee participation

05/18/2017

Technical data package availability

05/18/2017

Final deadline for additions into the tender protocol draft and into the concession agreement draft, and public consultation closing

06/19/2017

Public hearing (city of Rio de Janeiro)

06/27/2017

Publication of tender protocol and the template of the concession agreement

07/20/2017

Technical seminar

July/2017

Environmental and fiscal-legal seminars

July/2017

Final deadline for filling application forms, delivery of application documentation and payment of participation fee

08/04/2017

Deadline to present the offer bid bonds

09/12/2017

Public offers presentation

09/27/2017

Deadline for delivery of the qualification documentation (awarded bidder)

10/02/2017

Award and ratification of the bidding

by 12/07/2017

Deadline to present the following documents: (i) signing of the concession agreement; and (ii) qualification of the affiliate indicated for the signing of the contract, if such is the case

12/22/2017

Deadline for payment of the signature bonus, and demonstration of proof of payment

by 12/22/2017

Concession agreement execution

by 01/31/2018

Pursuant to Resolution CNPE No. 7/2017, the local content commitments will not be adopted as a criteria for the judgment of the bidding process, which represents a novelty. For the onshore blocks, the minimum global commitment percentage required will be of 50%, both for the exploration phase and for the production development period. Regarding the offshore areas, the minimum local content percentage required shall be: (i) exploration phase – minimum global commitment of 18%; and (ii) production development period – 25% for the well construction, 40% for the collection and offloading system, and 25% for the stationary production unit.

Furthermore, aiming to attract more investments, the tender protocol draft establishes other novelties, such as: (i) differentiated royalties, taking into consideration the geological risks, production expectations, and other pertinent factors; (ii) reduction of the minimum net worth to qualify as non-operator, which will be 25% of the value required for the qualification as operator; and (iii) adoption of a single exploration phase.

The tender protocol draft is available at ANP’s webpage (in Portuguese only). All documents will be under public consultation until June 19, 2017, so that contributions may be made, from both the industry and society in general.