More blocks headed for permanent offer
On Tuesday (4), ANP held a public hearing to debate the new version of the Permanent Offer statute, which aims to improve the regime’s rules and include 173 blocks and one area with marginal accumulations (Juruá in the Solimões Basin).
The Permanent Offer is the bidding model in which there is a continuous offer of areas for exploration and production of oil and natural gas. Of the 173 new blocks, 149 were already under study and obtained a statement regarding environmental feasibility, while the other 24 blocks were offered and not scooped up in the 16th Bidding Round held in October.
The current version includes 600 blocks with exploratory risk and 14 areas with marginal accumulations. However, in September 2019, a public public auction of 1st Permanent Offer Cycle was held, during which 33 blocks and 12 areas with marginal accumulations were purchased. Thus, the new notice will offer 740 blocks and three areas with marginal accumulations.
In addition to the inclusion of new areas, the technical and economic parameters for the blocks and areas included in the draft notice submitted for consultation have been updated, especially with regard to the methodology for defining royalty rates. For areas located in new frontier and mature basins, a reduction was suggested considering the geological risk and the production expectations of the sector, while a minimum royalty rate equivalent to 5% was proposed for areas with marginal accumulations. As for areas outside the pre-salt polygon of the Campos and Santos Basins and those classified as high potential basins, the proposed royalty rate is 10%.
The draft also includes some technical improvements resulting from the experience of the 1st Permanent Offer Cycle and other bidding rounds held in 2019, as well as contributions from the Agency’s technicians, in addition to changes in the wording to make the rules clearer and more objective .Permanent Offer is a concession modality in which there is an uninterrupted offer of returned fields (or those in the process of being returned) and exploratory blocks offered in previous auctions but were not purchased. As such, companies, especially those not yet operating in Brazil, have the opportunity to study these areas without the time limitations of traditional bidding rounds.
Source: ANP
