Permanent Offer: CNPE Publishes Resolutions Changing Bidding Rounds System

• Published date: 18 January 2022
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Oil, Gas & Electricity
• Law Firm: Tauil & Chequer
• Author: Mr Bruno Belchior and B'rbara Eiroa Leite

On December 24, 2021, Brazil's National Energy Policy Council ("CNPE") published CNPE Resolution No. 27, authorizing the National Agency of Petroleum, Natural Gas and Biofuels ("ANP") to define and include in the Permanent Offer, under the concession regime, any onshore and offshore block, as well as relinquished fields or those in the process of being relinquished ("Resolution No. 27/2021").

Fields and blocks included in the Pre-salt Area or in Strategic Areas are not covered by the authorization granted to ANP by CNPE. Such fields and blocks may be exceptionally included in the Permanent Offer by means of a specific determination of CNPE, which would define the parameters applicable to each field or block.

Resolution No. 27/2021 also established the Permanent Offer system as preferential for the offer of petroleum, natural gas and other fluid hydrocarbons E&P areas. Please refer to our previous legal update on the mechanics of the Permanent Offer system.

Moreover, Resolution No. 27/2021 revoked CNPE Resolutions No. 10/2018, No. 03/2020 and No. 07/2020, which among others subjects, addressed the multiyear bidding round calendar. As a result, the blocks that would be offered in the 18th Bidding Round under the concession regime, scheduled to take place in 2022, will now be included in the Permanent Offer.

Observing the provisions of Resolution No. 27/2021, CNPE published on January 05, 2022, Resolution No. 26/2021, authorizing ANP to include 11 blocks under the production sharing regime in the Permanent Offer, as well as approving the respective technical and economic parameters ("Resolution No. 26/2021"), as detailed below:

Block	Signature Bonus (BRL)	Minimum Percentage of Profit Oil (%)
Esmeralda	BRL 33,736,000.00	10.54%
'gata	BRL 61,813,000.00	12.58%
'gua Marinha	BRL 65,443,000.00	13.23%
Bumerangue B	BRL 8,861,000.00	5.66%
Cruzeiro do Sul	BRL 134,035,000.00	14.13%
Norte de Brava	BRL 511,692,000.00	22.71%
Sudoeste de Sagit'rio	BRL 330,256,000.00	21.30%
Itaimbezinho	BRL 15,641,000.00	11.67%
Turmalina B	BRL 9,822,000.00	6.87%
Jade	BRL 104,730,000.00	10.98%
Tupinamb' BRL	BRL 7,047,000.00	4.88%

The minimum mandatory local content for such blocks was established as following: (i) exploration phase - minimum global requirement of 18%; and (ii) development phase - 25% for the well construction, 40% for the collection and offloading system, and 25% for the stationary production unit.

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