The Ministry of Mines and Energy published, on June 20th, 2013, Ordinance no. 218, determining that the National Agency for Oil, Natural Gas and Biofuels (ANP) announces in October, 2013, the First Bid Round under production-sharing regime in the subsalt area, exclusively offering the structure named prospect of Libra, located in Santos sedimentary basin.

The ordinance establishes that the bidding process be structured in the same manner of previous bid rounds relating to blocks under the concession regime, with the appropriate legal adaptations.

The ordinance also determines that the bidders who severally participate in   bid round or in a consortium must have, according to ANP ´s criteria,  a participant qualified as “Operator A”, so as to ensure the technical expertise on exploration and production in deep waters. 

The bidding process will establish as winning bidder the one who presents the largest oil surplus to the Government. The percentage of the oil surplus to the Government must refer to the oil barrel price between US$100.00 and US$110.00 and average production of 12 thousand barrels/day, per active producing well. 

The sharing agreement to be entered into with the Ministry of Mines and Energy will have a thirty five (35) year term.

In order to comply with the provisions of referred ordinance, on 28/06/2013, ANP published the Resolution no. 24 approving the regulation on the procedures to be adopted in bidding processes of blocks located at the subsalt polygon and in strategic areas for entering into the contract of activities of exploration and production of oil and natural gas under the production-sharing agreement.

According to the resolution, the bidding processes for the subsalt area comprise the following phases:

  1. Publication of Preliminary Invitation (Pré-Edital) to  Bid  
  2. Public hearing;  
  3. Publication of Invitation to Bid  
  4. licensing and qualification requirements of the interested companies  
  5. submittal of tenders and bidding process judgment/final decision   
  6. award of the contract and bidding process ratification, and .     
  7. signature  of the Production-Sharing Agreement.  

The regulation, annex of referred ordinance, details the procedures of each one the above phases.  

While the Brazilian government prepares the first subsalt bid-round, the Chamber of Deputies approved a bill which sets forth a cap of 60% for the profit-oil to be offered to the government in the subsalt auctions by the sharing regime. The Brazilian government and companies of the segment expressed their concerns about this bill, fearing that this measure will discourage further  investments.  In response to such situation, the Senate approved a clean bill  excluding the fixation of referred cap