The National Energy Policy Council ("CNPE") published on March 7, 2019, the Resolution No. 02/2019 ("Resolution"), setting the guidelines for the bidding round under the production sharing regime for the surplus volume contracted under the transfer of rights regime ("Bidding Round").
The surplus volume in the development areas of Atapu, Búzios, Itapu and Sépia, in Santos Basin, will be offered in the Bidding Round. The Resolution provides for the execution of a co-participation agreement with Petrobras and an exploration and production agreement under the production sharing regime with the Brazilian government, providing for:
(i) The unification of operation proceedings for the development and production of hydrocarbons in the areas with a co-participated deposit with both agreements, simultaneously, in force;
(ii) Proportional participation interest of each contracted party in the co-participated deposit; and
(iii) The rules for the reimbursement due to Petrobras for the investments made in the awarded areas until the execution date of the production sharing agreement.
The co-participation agreement shall also be executed by Empresa Brasileira de Administração de Petróleo e Gás Natural S.A. - Pré-Sal Petróleo S.A. as an intervening party.
In order to maximize the net present value ("VPL") of the federal government and to maintain Petrobras's VPL calculated based on the signature date of the production sharing agreement, the reimbursement amount due to Petrobras will be calculated based on current market standards, by the deferral of the production of the volume contracted under the transfer of rights regime, resulting from the execution of the production sharing agreement.
In return for payment of the reimbursement, the contracted party(ies) will be entitled to the percentage of assets existing in the area on the execution date of the production sharing agreement, in proportion to their participation interest in the deposit, pursuant to the co-participation agreement. The reimbursement amounts paid by the contracted party(ies) may be recovered as cost oil.
The rules for the co-participation agreement will be set forth by means of an act of the minister of Mines and Energy, and that contract and any amendments to it shall be submitted for approval to the National Agency of Petroleum, Natural Gas and Biofuels.
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