4th Production Sharing Bidding Round
The 4th Production Sharing Round in the Pre-salt, held today (June 7) by ANP, raised R$ 3.15 billion in signing bonuses and R$ 738 million in planned investments on the exploration phase. The goodwill of the profit oil offered in the 4th Round was 202.3%. The auction had three of the four offered areas acquired: Uirapuru, Dois Irmãos and Três Marias. Read more.
See below the results of the acquired blocks:
|Basin||Sector||Block||Winning company / consortium||Signing bonus (R$) (fixed)||Offered profit oil|
|Santos||SS-AUP1||Três Marias||Petrobras (30%)*; Chevron Brazil (30%); Shell Brasil (40%)||100,000,000.00||49.95|
|SS-AUP2||Uirapuru||Petrobras (30%)*; Petrogal Brasil (14%); Statoil Brasil O&G (28%); ExxonMobil Brasil (28%)||2,650,000,000.00||75.49|
|Campos||SC-AP5||Dois Irmãos||Petrobras (45%)*; Statoil Brasil O&G (25%); BP Energy (30%)||400,000,000.00||16.43|
See more information about the public session of the production-sharing round
Selecting the winners
During the public session, the qualified companies will submit bids for each of the blocks offered. The signing bonuses are fixed and the profit oil for the Federal Government is the only criteria for defining the winning bidder.
The bids will be judged and classified according to the descending order of the profit oil for the Federal Government, and the winning bidder will be the one that offers the highest percentage.
Right of first refusal
According to the law in force, Petrobras has the right of first refusal to act as operator in blocks of the pre-salt. In a consortium, the operating company is the one that is responsible for conducting and carrying out all activities provided for in the contract.
Petrobras has expressed interest in participating as operator in the areas of Dois Irmãos, Três Marias and Uirapuru. Two models of production sharing contract were developed, one with the mandatory 30% share of Petrobras, as the operator, and the other without this share.
For the blocks in which it exercised the prerogative to act as operator, Petrobras must:
- a) build a consortium with the winning bidder, if the percentage of the profit oil for the Federal Government offered for the block is equal to the minimum percentage defined in the tender protocol;
- b) decide, during the public bidding session, within 30 minutes, if it will take part in the consortium with the winning bidder, in case the percentage of the profit oil offered for the Federal Government exceeds the minimum percentage established in the tender protocol.
If Petrobras decides not to join the consortium, the winning bidder, individually or in a consortium, undertakes 100% (one hundred percent) share in the licensed block, and shall indicate the operator and the new share percentages.
The profit oil is the share of the oil or gas production to be distributed between the Federal Government and the company, according to criteria established in contract, resulting from the difference between the total production volume and the portions related to the cost oil and royalties due.
The cost oil is the share of the oil or gas production corresponding to the costs incurred and investments made by the contractor in carrying out the activities of exploration, production and decommissioning of facilities.
Reopening of offers
Rules were maintained for the reopening of bids, at the end of the round, of blocks not acquired. These rules were already included in the tender protocols for the 2nd and 3rd Production Sharing Rounds, but had some improvements since then. Companies that do not have sufficient bid bonds at the reopening, for example, will be allowed to bid at this time and submit the bonds later.
This measure allows areas not acquired, including for bureaucratic reasons – such as mistakes in filling envelopes and proxy documents – to have a second chance of being acquired.
The contract models include, among the new things, the review of the clause that provides for arbitration, as a result of Public Consultation and Hearing No. 24/2017.