Brazil Regulator Clears Companies for October Oil and Gas Auctions

Brazil's National Agency of Petroleum, Natural Gas and Biofuels (ANP), the federal oil and gas regulator, has published the lists of companies eligible to take part in two permanent oil and gas auction cycles scheduled for October 7.

The agency said 19 companies qualified for the fourth permanent production-sharing cycle and 46 for the sixth permanent concession cycle. Eligibility does not guarantee that a company will bid. Firms still need to declare interest in specific areas and present bid guarantees by July 21 to submit offers alone or as part of a consortium.

Two Auction Models

The production-sharing round includes exploration blocks in the Campos and Santos basins, two of Brazil's most important offshore oil provinces. Valor reported that the notice covers 23 available blocks, while Times Brasil said the areas include pre-salt acreage, a strategic offshore layer that has produced some of Brazil's largest discoveries.

Companies listed for the production-sharing cycle include Petrobras, Brazil's state-controlled oil company, as well as Prio, 3R Petroleum, Chevron, Shell, BP and Equinor, according to Valor. In this model, the public auction winner is the company or consortium that offers the federal government the highest share of profit oil above the minimum set in the tender rules.

ANP said it will disclose by August 6 which of the 23 blocks received declarations of interest and will therefore be included in the public session.

The concession round follows a different structure. Under Brazil's concession regime, companies assume exploration risk and, if they make a commercial discovery, keep production while paying the government charges required by contract. Valor reported that Petrobras, Atem, Eneva and Origem are among the companies on the eligible list for that cycle.

Concessions and Future Areas

The concession notice covers 38 sectors, with 495 exploratory blocks and five areas with marginal accumulations across 11 sedimentary basins, according to Valor. The winner in a concession auction is determined by a score based on signing bonus and the minimum exploratory program, known in Brazil by the acronym PEM.

Times Brasil described the permanent offer system as ANP's main mechanism for making oil and natural gas exploration and production areas available in Brazil. The system allows areas to remain on offer in recurring cycles rather than relying only on isolated auction rounds.

ANP also approved the indication of 86 exploratory blocks for areas under study that could be added to future permanent offer cycles. All are in three sedimentary basins along the Equatorial Margin, a frontier region on Brazil's northern coast: 36 in Foz do Amazonas, 25 in Pará-Maranhão and 25 in Barreirinhas.

Those blocks are not yet ready for auction. Before they can be incorporated into future rounds, they must pass further regulatory steps, including environmental analysis, a joint statement from the Ministry of Mines and Energy and the Ministry of Environment and Climate Change, and a public hearing.

The October rounds will therefore test both investor appetite for mature offshore basins such as Campos and Santos and the pace at which Brazil's regulator can prepare new frontier areas for future competition.