The National Agency of Petroleum, Natural Gas and Biofuels (ANP) recently released its decision regarding Chinese companies that qualified for the first pre-salt bidding round, held on October 21 2013 in Rio de Janeiro.

The tender documents for this bidding round set forth an obligation for all companies within the same economic group to present their bids together in the same consortium.

Accordingly, at first it was assumed that Chinese state-owned China National Offshore Oil Corporation (CNOOC) and China National Petroleum Corporation (CNPC), as well as Chinese-Spanish Repsol Sinopec and Portuguese Petrogal (in which Sinopec holds 40% and 30% of the equity, respectively) would each have to form a consortium and present a joint bid for the Libra field.

The obligation was meant to protect the remaining companies against the possibility of companies from the same economic group exchanging privileged information, which could jeopardise the market.

In its decision, the ANP stated that CNOOC and CNPC had to be in the same consortium, and were expressly prevented from presenting separate bids.

However, ANP came to the conclusion that Sinopec's shareholding in Repsol-Sinopec and Petrogal did not grant control to the Chinese company; therefore, they could both compete against the remaining Chinese companies.

However, because Repsol-Sinopec and Petrogal are qualified as Type B operators (ie, able to operate on land and shallow waters only), they would necessarily have to join with a company that is qualified to operate in deep waters before they could submit a bid.

For further information on this topic please contact Bashir Karim Vakil or Ana Luiza Mader Branco at Karim Vakil & Cruz Vizaco Advogados by telephone (+55 21 8151 0018) or email ([email protected] or [email protected]).