Keywords: preliminary tender protocol, Brazil Round 11

The Brazilian National Agency of Petroleum, Natural Gas and Biofuels ("ANP") published, on January 24, the Preliminary Tender Protocol of the Brazil Round 11. As expected, the round will be held on May 14 and 15 of this year, when a total of 172 blocks will be offered, half of which are onshore and half offshore.

The document is still a preliminary version of the definitive Tender Protocol, which will be published on March 11 after a short period of public consultation that will end on February 4. The document, however, anticipates the rules that will apply to the round and is accompanied by the draft of the concession contract.

Although the Preliminary Tender Protocol preserves the same structure and most of the provisions of previous tender protocols, its wording has introduced some significant revisions:

The Preliminary Tender Protocol implemented the qualification procedures that have recently been adopted by ANP in case of farm-in procedures, particularly regarding the standardization of qualification documents.

The minimum score required for the different categories of operators (A, B and C) remain the same, but certain specific scoring criteria were revised or added, including score for investments made in previous exploratory activities and score for operations undertaken in environmentally sensitive areas.

The minimum net equity required for qualification in the Brazil Round 11 was drastically increased (from R$1 million to R$1.9 million for non-operators; from R$2 million to R$3.8 million for C operators; from R$20 million to R$59 million for B operators and from R$50 million to R$107 million for A operators).

The Preliminary Tender Protocol included, among other fiscal and labor qualification criteria, the requirement of a clearance certificate in respect of labor obligations.

The financial qualification criteria were simplified with the adoption of a standard form for declaration of material obligations and strategic planning.

The publication of the Preliminary Tender Protocol also marks the beginning of the period for submission of the expression of interest and qualification documents, which will last until March 26. The disclosure of the data package is scheduled for January 25, withits delivery being conditional upon the payment of participation fees and approval of the documentation for expression of interest.

The Preliminary Tender Protocol and the draft of the concession contract may be found on the ANP website (document in Portuguese).

At the same time, due to a request from President Dilma, the government is now studying the inclusion of an additional 117 blocks in Brazil Round 11, but no official confirmation in this respect has been made so far.

Previously published on January 25, 2013.

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