Highlights On The Draft Concession Agreement For ANP Round 11

Companies interested in offering comments and suggestions on the Draft Tender Protocol and the Draft Concession Agreement for ANP Round 11 must hurry up to meet the deadline fixed for this February 4th.

Willing to give you some background on the main changes introduced by ANP, we highlight below our preliminary comments:

- "FRADE" CLAUSES: In response to the lack of clear regulation and difficulties faced by ANP on the settlement of Frade case, the Draft Concession Agreement requires from Operator (i) the maintenance of a minimum staff domiciled in Brazil, fluent in Portuguese and able to efficiently conduct the daily operations, as well as to appropriately and immediately respond to incidents; and (ii) the constant monitoring of all activities involving operational, environmental or human health risks, through a monitoring center located in Brazil. Additionally, the Concessionaire must provide unrestricted and immediate transport, food and lodging facilities to the representatives of ANP for purposes of information and data collection for operational incidents;

- EXPLORATION PHASE: If Concessionaire completes a well as additional activity to the Minimum Exploratory Program of the First Exploratory Period, it may request to the ANP that the commitment for the Second Exploratory Period is considered fulfilled in advance;

- LOCAL CONTENT: ANP has considerably modified the local content clause in order to clarify the cases in which the concessionaire is exempted from compliance with local content requirements and to mitigate the rules. As an example, the chartering of drilling rig will be considered in the accomplishment of the obligation, even if its local content is less than 10%. In addition, pursuant to the new draft all the requests of...