brazil round 3 - anprodadas.anp.gov.br/arquivos/round3/iasf_ing.pdf · 2017. 12. 27. · brazil...

Brazil RoundBrazil Round 3 3

Ivan de Araújo Simões FilhoGeneral Manager Licensing Rounds

ConcessionAgreement

Brazil Round 3

Agência Nacional do Petróleo



Brazilian ConcessionRegime

• Underground resources belong tothe State

• Foreign and domestic companiesmay explore these resources underconcession

• Concessions granted by the Statethrough licensing rounds

• Model Concession Agreements

Brazil RoundBrazil Round 3 3Concession Agreements

• Exploration and ProductionPhases

• Predefined duration• Minimum Work Obligations• All costs and risks at

Concessionaire’s expense• Petroleum taxes and Royalties

due to State


Concession AgreementExploration Phase

• Up to 9 years> Two or three periods of 2 - 4 years each> Partial relinquishment required at end of

each period• Minimum Exploration Program in

each period• Possibility of extension for

evaluation of Discovery late inExploration Phase


Concession AgreementDevelopment Stage

• Starts with Declaration ofCommerciality

• Initiated at any time during theExploration Phase

• 180 days for submission ofDevelopment Plan

• Within 60 days of conclusion ofEvaluation Plan (whereExploration Phase extended)


Concession AgreementProduction Phase

• Starts with Declaration ofCommerciality

• 27 year duration• Extension in event of remaining

production• Concession Agreement can

cover several fields• Free right to export production


Concession AgreementExtensions

• Exploration Phase> Active appraisal of discovery made

close to end of final period> Based on pre-agreed appraisal

program

• Production Phase> Must be requested one year in

advance> Ordinarily granted if field still in

production


Minimum Work Obligation

Brazil RoundBrazil Round 3 3Minimum Work Obligation

• Separate obligations for eachexploration period

• First period> Seismic or drilling of 1 well> 1 sq km of 3D seismic may be

substituted for 5 km 2D seismic• Second period> 2 wells

• Third period> 2 wells

Brazil RoundBrazil Round 3 3Minimum Work Obligation

• Each period requires guarantee byStandby Letter of Credit> Deferral of one year for onshore Blocks

in mature basins> US$1 - 5 million for first period> Amount set at time of renewal for

second, third periods

• Commitment is physical, notmonetary

Brazil RoundBrazil Round 3 3Seismic Commitments

• Non-exclusive (spec) surveys canbe counted towards MinimumWork Obligation> 3D seismic everywhere> 2D and 3D seismic onshore> 2D and 3D seismic in transition zones (up

to 50m water depth)

Brazil RoundBrazil Round 3 3Well Commitments

• All 53 Blocks have only seismiccommitment in first explorationperiod> May still drill in first period

• All wells have minimum pre-defined target horizon

• Additional exploration activitymay count towards nextexploration period> Subject to ANP pre-approval of program> All periods will have some commitment


Government Takeand Other Obligations


Government Takeand Other Obligations

• Signature Bonus• Occupation or Surface Rental

Payments• Royalty• Special Participation

• Investment in R&D• Landowner Compensation

Brazil RoundBrazil Round 3 3Signature Bonus

• Amount included in bid toobtain the Concession

• Payable in full to ANP uponsignature of the ConcessionAgreement

• Minimum for each Concessionto be confirmed in Final TenderProtocol ("Edital")

Brazil RoundBrazil Round 3 3Royalties

• Based on gross value ofhydrocarbon production from eachfield

• Rate for each Concession will be10%> ANP has discretion to reduce rate to 5%

• Applicable to all fields throughoutperiod of Concession Agreement

Brazil RoundBrazil Round 3 3Special Participation

• Based on net revenues from fields that achievesubstantial production volumes> Ring-fenced on field-by-field basis based on Development Plan

• Rates vary according to criteria set forth inPresidential Decree No. 2705, Aug 3, 1998> Volume of quarterly production> Location of field

– Onshore– Offshore < 400 meters– Offshore > 400 meters– Determination of depth of each field within a Concession Area to be

based on majority of surface area covered by field

• Rates are reduced in first 3 years of production• Net losses from prior periods can be carried

forward indefinitely


Discovery wells for field

All seismic in originalArea

Dry holes from otherlicenses

Regional seismic (outside Area)

Dry holes in originalArea

Special ParticipationTreatment of

Exploration Costs


Net Production Revenue =Net Production Revenue =

Allowable exploration expense

Depreciation and amortizationRoyalty, fees and taxes

Occupation FeesOperating expense

Loss Loss carryforwardcarryforwardSignature BonusSignature Bonus

Special ParticipationCalculation Basis

Total Revenue Less

Abandonment provision


New Regulations

Brazil RoundBrazil Round 3 3 New Regulations

• ANP Portaria 114 - July 5, 2000> Regulates access to data and information

regarding Brazilian sedimentary basins

• ANP Portaria 176 - October 27, 1999> Regulates the procedures for well

abandonment.

• ANP Portaria 14 - February 1, 2000> Establishes procedures for concessionaires to

follow in the event of pollution/leak.

• ANP Portaria 249 - November 1 2000> Regulates flaring and losses of Oil and Gas


• ANP/INMETRO Portaria 1 - June 19, 2000> Regulates the conditions and minimum

requirements for petroleum and natural gasmeasurement systems (production,transportation, storage and import/export)

• ANP Portaria 9 - January 21, 2000> Defines reserve classifications criteria, as well

as reserve estimation practices

• ANP Portaria 75 - May 3, 2000> Establishes well name coding and well drilling

notice requirements

• ANP Portaria 76 - May 3, 2000> Establishes well type classification

New Regulations


• ANP Portaria 90 - May 31, 2000> Defines the Development Plan contents

and procedures

• ANP Portaria 100 - June 20, 2000> Defines the Annual Production Program

• ANP Portaria 123 - July 18, 2000> Defines the Annual Work Program and

Budget

New Regulations


Brazil Rounds 1 and 2


23 Blocks offshore• 6 Campos• 6 Santos• 4 Espírito Santo• 2 Cumuruxat iba• 3 Camamu-Almada• 1 Foz do Amazonas• 1 Potiguar

4 Blocks onshore• 1 Potiguar• 3 Paraná

1,000 Km0

Camamu / Almada

SCALE

1,00

0m

Foz do Amazonas

Potiguar

Cumuruxatiba

Espirito Santo

Campos

Santos

Paraná

Brazil Round 1Brazil Round 1

Blocks OfferedBlocks Offered

N

S

W E


Brazil Round 1Participants

l 58 companies expressed interest

l 14 countries:> 24 USA> 7 Brazil> 6 UK> 5 Argentina> 3 Canada> 13 other countries


Brazil Round 1Summary of Results

• 12 Blocks awarded• Total Signature Bonus: R$

321,656,637• Average Local Content

commitment:> 25.4% Exploration Phase> 26.7% Development Stage

• 11 winning companies• 43,000 km of 2D seismic• 58 Exploration wells


Brazil Round 1Operators

Agip 3 blocksPetrobras 3 blocksTexaco 2 blocksAmerada Hess 1 blockBP-Amoco 1 blockExxon 1 blockUnocal 1 block


Brazil Round 1Concessionaires

Petrobras 5 blocksAgip 4 blocksYPF 4 blocksTexaco 3 blocksExxon 2 blocksUnocal 1 blockAmerada Hess 1 blockBP-Amoco 1 blockBritish Borneo 1 blockKerr-McGee 1 blockShell 1 block


13 Offshore Blocks• 4 Campos• 6 Santos• 2 Sergipe-Alagoas• 1 Camamu-Almada

10 Onshore Blocks• 3 Recôncavo• 3 Sergipe-Alagoas• 2 Potiguar• 1 Amazonas• 1 Paraná

Brazil Round 2Brazil Round 2

Blocks OfferedBlocks Offered

N

S

W E


Participation in Brazil Round2 (Brazil Round 1)

l 49 companies expressed interest (58)

l 16 countries (14):> 17 USA (24)> 8 Brazil (7)> 4 UK (6)> 3 Argentina (5)> 3 Canada (3)> 2 Australia (0)> 12 Other countries (13)


Brazil Round 2Summary of Results

• 21 Blocks awarded• Total Signature Bonus: R$

468,259,069• Average Local Content

commitment:> 41.4% Exploration Phase> 46.8% Development Stage

• 16 winning companies• 45,850 km of 2D seismic• 96 exploration wells


Brazil Round 2Operators

Petrobras 7 blocksRainier 4 blocksCoastal 3 blocksAmerada Hess 1 blockChevron 1 blockPanCanadian 1 blockQueiroz Galvão 1 blockSanta Fe 1 blockShell 1 blockUnion Pacific 1 block


Brazil Round 2Concessionaires

Petrobras 8 blocksRainier 4 blocksCoastal 3 blocksBG 3 blocksAmerada Hess 2 blocksChevron 2 blocksOdebrecht 2 blocksPetrogal 2 blocks

Shell 2 blocksIpiranga 1 blockPanCanadian 1 blockQueiroz Galvão 1 blockSanta Fe 1 blockSK 1 blockUnion Pacific 1 blockYPF 1 block


Companies Participating inLicensing Rounds

0

10

20

30

40

50

60

Exp In

t.

Part. F

ees.

Qualif

ied

Bid Bon

ds

Bids

Winn

ers

No.

Com

pam

ies Round 1

Round 2


Commitments for LocalProcurement

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

Exploration Development

% A

vera

ge W

inni

ng B

idde

r

Round1

Round2

Brazil RoundBrazil Round 3 3Current Concessionaires

• Petrobras*• Agip (British Borneo)*• Repsol (YPF)*• Texaco*• ExxonMobil*• Unocal*• Amerada Hess*• BP-Amoco*• Kerr-McGee*• Shell*• Devon (Santa Fe,

Pennzenergy)*• TotalFina Elf *• Enterprise• Frade Japão Petróleo• Tecpetrol

• Rainier*• Coastal*• BG• Chevron*• Odebrecht• Petrogal• Ipiranga• Union Pacific*• Pan Canadian*• Queiroz Galvão*• SK• JAPEX• Perez Companc*• Petroleo Trevo• Petroserv• Sipetrol*• SOTEP

* Operator


Future Licensing Rounds inBrazil

Brazil RoundBrazil Round 3 3Future Licensing Rounds

• Planned once a year• Nominations accepted at any time• Similar procedures and schedule• Interactive and dynamic process• Improvement of data availability:>Non-exclusive surveys>E&P Databank (BDEP)

Brazil RoundBrazil Round 3 3Brazil Round 4

• May include a few Petrobrasrelinquished blocks

• 4 basins already defined> Pelotas> Pernambuco-Paraíba> Parnaíba> São Francisco

brazil round 3 - anprodadas.anp.gov.br/arquivos/round3/iasf_ing.pdf · 2017. 12. 27. · brazil...

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