One More Bid for 2021: The 2nd Transfer of Rights Surplus

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The second round of this type is scheduled for December 17th, after some areas failed to receive any bids back in 2019 when the first one took place. This time, Petrobras has already exercised its right of preference in relation to both offered areas, Atapu and Sépia, which means that it will take part in the winning consortium with operatorship and at least 30% of interest. The company also stated that it will pay between BRL 3.34 billion and BRL 11.14 billion depending on final interest percentages.

As these areas are inside the pre-salt polygon, the bid will follow the Production Sharing regime, where Signature Bonuses are fixed, and the sole decisive criteria are the percentages of profit oil the consortiums are willing to share with the government.

Some changes were made in order to make the new bid more attractive to the companies: both the Signature Bonuses and the Minimum Surplus Oil percentages were significantly reduced. Compensation values (to be paid to Petrobras) and the Tract Participations* for both fields are also pre-defined. This should accelerate the cash flow for the new contractors as well as reduce the uncertainty of expenditures.

This will be the 13th bid with pre-salt opportunities since the Transfer of Rights in 2010. These include four different bid types (Concession Contract, Open Acreage, Production Sharing, and Transfer of Rights Surplus) and have already secured around 70 billion dollars in Signature Bonuses.

*That is, how the rights and obligations of a certain area will be divided between both contracts (the “original” Transfer of Rights contract and the new Production Sharing for the Transfer of Rights Surplus).

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