Respective links to the red-lined versions (in each case, marked-up in relation to the respective documents applicable to the 12th Bid Round) of ANP's 13th Bid Round preliminary tender protocol (in Portuguese) and the associated concession contract template can be found below:

Preliminary Tender Protocol

Concession Contract template

From a preliminary review, we highlight the following changes:

Preliminary Tender Protocol

  • A new procedure has been introduced: companies will firstly bid and later qualify;
  • New formalities for the preparation and submission of the application and qualification documents to ANP;
  • Exceptions for presenting an independent auditor's opinion excluded. Pursuant to the new wording, all companies are now required to provide such document, regardless of whether or not they are subject to Laws No 6.404/1976 and/or 11,638/2007;
  • Data package containing environmental guidelines;
  • Each company will receive individual confirmation of acceptance of its application by e-mail. Prior to the bid date, ANP will disclose the full list of companies participating in the bid;
  • Criteria for evaluation of the bids maintained;
  • Companies may request technical qualification equivalent to the level of technical qualification which the company may already hold for an area in Brazil in which it currently operates;
  • Delay in paying the signing bonus may result in a penalty of 10% of the value of the signing bonus being imposed, together with interest of 1% per month;
  • Letters of credit for minimum exploratory programs ("PEM") must be issued by financial institutions registered with the Brazilian Central Bank and with a long term rating equal to or better than "BB-" or "Ba3" by Fitch Ratings, Standard & Poor's or Moody's;
  • More specific requirements for oil pledges given as financial guarantees;
  • More specific criteria for imposing penalties in the event of non-compliance with obligations under the tender protocol, including fines and temporary suspension.

Concession Contract template

  • Exclusion of specific provisions used in the 12th Bid Round related to exploration and development of unconventional resources.
  • Clearly states that it is possible to accumulate different types of PEM financial guarantee;
  • ANP will have 180 days (instead of 60 days) to approve or request changes to the Decommissioning Program;
  • Development plans must principally include all commercial discoveries within the concession area pursuant to the criteria defined by the applicable legislation;
  • All of the deposits to be exploited by a concessionaire must now be included in a single development area whereas, previously, each (entire) deposit could be considered to be a separate development area;
  • Technical safe range of the Field must not exceed 1km, except in exceptional cases at ANP's discretion;
  • Clearly states that each concessionaire must make the investments which correspond to its interest in the consortium, without prejudice to joint and several liability;
  • Having regard to Production Individualization Agreements or environmental issues, in exceptional cases ANP may approve drilling a well outside the concession area;
  • More specific requirements applicable to provisioning funds for decommissioning and abandonment;
  • New criteria for assessment of local content commitments and specific requirements;
  • Changes to R&D investment obligations, including a specific penalty of 20% of the pending amount of investment if the company does not comply with the applicable deadline;
  • Changes to the assignment clause, including specific provisions applicable to interim periods;
  • Changes to the termination provisions, including reference to judicial or administrative recovery;
  • More detailed procedure for mediation (to be conducted by ANP) among concessionaires;
  • New arbitration provision in order to clarify when arbitration is applicable in disputes among concessionaires and ANP;
  • New timeframe for calculating reduction factor applicable to seismic surveys for the purposes of meeting PEM commitments.

The documents are currently open to public consultation, and corrections and improvements may be made. Suggestions and comments must be provided by no later than July 2, 2015. The public hearing will take place in the city of Rio de Janeiro on July 9, 2015.

Please do not hesitate to contact us if you require a more detailed assessment of any specific changes or assistance in preparing the application and qualification documents.