Brazilian Government Launches Guidelines For First Bidding Round Of Pre-Salt

On June 20, 2013, the Brazilian Ministry of Mines and Energy published the general rules for the first bidding round for the Pre-Salt area, under the production sharing regime.

The rules provide that only those who obtain qualification as "Operator A" (either individually or, in case of consortium, with at least one member with such qualification) will be allowed to bid. This requirement aims at ensuring that bidders will have the necessary technical knowledge concerning exploration and production in deep waters.

However, the main point concerns the sharing of the profit oil. The volume shared between the Union and the contractor will vary depending on the price of the oil barrel and the average daily production per productive well in each of the fields. This is a relevant provision once the profit oil is the criterion that shall determinate the winning bid under the production sharing model, in addition to setting the remuneration...