Brazil: 17th Concession Bid Round – Tender Protocol and Concession Contract Drafts

On November 27, 2020, Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) published the draft tender protocol (“Draft Tender Protocol”) for the 17th Concession Bid Round (“17th Concession Bid Round”) for exploratory blocks, establishing the procedures and rules for participation in the bid, as well as the concession contract draft, the preliminary schedule, and information regarding the offered areas.

The 17th Concession Bid Round was temporarily suspended in April 2020 due to the COVID-19 pandemic and was resumed by the ANP after a decision of the National Energy Policy Council (“CNPE”) to hold the bid round in 2021, as detailed in our previous Legal Update on CNPE Resolution No. 07/2020.

The 17th Concession Bid Round will offer 92 blocks in the Campos, Pelotas, Potiguar and Santos sedimentary basins, encompassing a total area of 53.9 thousand km2. Three blocks of the Santos Basin (sector SS-AUP5) are partially located beyond the 200 nautical mile limit from the Brazilian baseline and may contain deposits located beyond such limit.

Also, the concession contracts for the SS-AUP5 sector blocks shall include an additional clause establishing that, in the event of production in reservoirs totally or partially located in areas beyond the 200 nautical miles limit, the concessionaire will be responsible for paying the amounts due to the International Seabed Authority – ISA pursuant to article 82 of the United Nations Convention on the Law of the Sea – UNCLOS.

The technical data package is already available and to have access the interested bidders must (i) fill out the electronic registration form; (ii) submit the registration documents required by the Draft Tender Protocol, such as the company’s corporate documents and the evidence of powers of its legal representatives or attorneys-in-fact and the confidentiality agreement; and (iii) pay the participation fee for the specific sector of interest. The 17th Concession Bid Round will follow the schedule below.

The 17th Concession Bid Round uses the same electronic mechanism system used in the 16th Concession Bid Round for the presentation of documents. The Draft Tender Protocol establishes that the required documentation must be uploaded through the Electronic Information System ("SEI") pursuant to the instructions provided in the “SEI External User Manual” and the “Manual for Submission of ANP Bidding Documents on SEI,” which is available on the ANP/Rodadas website (Portuguese only).

In addition to the digital submission through SEI, the original versions of the financial guarantees of the Minimum Exploratory Program and the performance guarantees must also be submitted in hard copy to ANP. The bid bonds must be submitted to the ANP in hard copy only.

The Draft Tender Protocol is available on the ANP/Rodadas website (in Portuguese and English). All documents are available for public consultation by January 28, 2021, and inputs  may be made by both the industry and the general public.

We will keep you posted on the development of the 17th Concession Bid Round through our Legal Updates.

For more information related to this Legal Update, please contact us at EnergypartnersTC@mayerbrown.com.