Brazil bidding rounds are arranged by ANP, Brazil’s licensing authority, the Agencia Nacional do Petroleo, Gas Natural e Biocombustiveis, guided and authorized by the National Energy Policy Council (CNPE).
As the ninth largest oil producer in the world, exploration licensing is a vital income generator for the Brazilian economy.
Bidding is a public event held in the presence of authorities, companies, and the press. The bidders submit their offers, including a required signature bonus and work program commitment, at a public session by putting a sealed envelope into a transparent acrylic box. Like the box, the process is designed to be transparent. The winning bid is announced immediately, engendering excitement along with significant revenue.
In 2021, ANP created two permanent offer cycles for bidding and licensing presalt and other blocks. These replaced the previous three-part system.
Under both the Concession and the Sharing systems, new cycles are launched by the ANP with an announcement describing the blocks on offer and the minimum terms required.
Qualified participating companies have to submit documents showing an interest within a sector and pay a participation fee. Once the notice of interest is received by ANP, a Permanent Offer cycle begins, which usually takes around 120 days (although this timeline is not guaranteed). Additional companies can register after the cycle has begun, as long as their bids and payments are submitted not less than 30 days prior to the public session declaring the winners. The process ends with fanfare at a public session, where the winning bids are pulled from a transparent acrylic box.
Contracts will typically be finalized between the winning bidder and ANP within three to six months, assuming the bidders have submitted the appropriate guarantees and paid the signature bonus.