The National Agency of Petroleum, Natural Gas and Biofuels recently released its decision regarding Chinese companies that qualified for the first pre-salt bidding round, held in Rio de Janeiro. The tender documents for this bidding round set forth an obligation for all companies within the same economic group to present their bids together in the same consortium.
The National Agency of Petroleum, Natural Gas and Biofuels recently published a Portuguese draft of the preliminary tender package for the first production sharing bidding round. The preliminary tender package lists the rules and procedures that companies willing to participate in this bidding round must follow. Among other documents, the draft of the new production sharing agreement has been made available.
Both history and recent events demonstrate that investment in the Brazilian oil and gas industry has increased significantly since acknowledgement of the sector's existence in the country over 60 years ago, and is likely to continue to do so in future. If the country can overcome the many obstacles still present in the sector, the industry could create even more benefits to society in the long run.
The Brazilian Constitution provides oil-producing states and municipalities with the right to receive a larger share of royalties as indemnification for allowing potentially hazardous activities to be carried out in their jurisdiction. However, following the 2007 discovery of huge oil and gas reservoirs in the pre-salt layer offshore Brazil, the existing system for the distribution of royalties has been called into question.
Following the discovery of the so-called 'pre-salt area' offshore southern Brazil, the government enacted a new law that established the production sharing agreement as the contract that would govern exploration and production activities in the area. However, licences to blocks outside this area are still granted through a concession agreement. Whether this mixed regime will be positive for the sector remains to be seen.
The National Agency of Petroleum, Natural Gas and Biofuels (ANP) recently published a draft of the preliminary tender package for the 11th oil and gas bidding round. The package lists the procedures that companies willing to participate in this bidding round must follow. Through a public consultation procedure, ANP hopes to gather additional information on the bidding round's rules and on the draft concession agreement.
Investors are concerned that resource nationalism is again emerging in Latin America. In addition, changes to rules and delay in definitions and bid rounds within the Brazilian oil and gas industry have created unrest among investors. However, the size of the investments and the technological challenges should encourage Brazilian authorities to continue to welcome other international players, from private and public sectors.
The legislature recently proposed a new regulatory milestone for mining that aims to adjust the current regulation and simplify procedures. It is hoped that the modernisation will, as far as possible, reflect and respond to the need for synergy between the private and public sectors, in a realistic vision of compromise between monitoring, survey and acceleration of growth of the Brazilian economy.
The events of the past three years have been highly significant for the exploration and production of oil and gas in Brazil. Following the implementation of three new laws, there will be three types of exploration and production contract in Brazil - the existing concession contract, the new production sharing contract and the draft transfer of rights agreement. All innovations are still subject to further discussion.
The Senate recently approved Law 309/02, which aims to create a state-owned company with 100% public capital to run production apportionment, oil trading and natural gas contracts. The company will operate all future state apportionment contracts in Brazilian pre-salt areas. Following approval by the Senate, the bill was submitted for presidential approval.
Deputy Ibsen Pinheiro's proposal for a new law was intended to regulate the distribution of royalties from oil exploration and concession agreements that result from pre-salt discoveries. However, it established an impracticable distribution of all government participations in oil and gas production. The Senate has now proposed a more appropriate distribution plan.
Deputy Ibsen Pinheiro has issued his amendment proposal for a new law that will regulate the distribution of royalties from oil exploration and concession agreements that result from pre-salt discoveries. The law will ensure that all states and municipalities receive royalties according to the Revenue Sharing Fund of the Municipalities.
Since the announcement of the large oil discoveries in the offshore Tupi Complex in November 2007, Brazil has been in the international oil industry spotlight. The discoveries could make Brazil one of the world's leading oil exporters, particularly given the instability of other oil exporters. In light of this, President Lula has created an Energy Commission to discuss some potential adjustments to the oil industry's legal framework.
Brazil has a wind power potential of over 60,000 megawatts. The associated environmental impacts and risks of wind power are considerably lower than those for hydroelectric or nuclear plants, but the prices are no less competitive. Entrepreneurs are observing the many advantages of wind power and investing heavily in it.
In a recent interview with Energia Hoje the former president of the Brazilian Petroleum Authority, Ambassador Sebastião do Rego Barros, offered his opinion on the delay in defining a new regulatory indicator in the petroleum sector and the negative effect this is having on foreign investment.
The seventh round of bidding for exploratory oil and natural gas blocks in Brazil took place on October 17, 18 and 19 2005, with a total of 194,739 square kilometres awarded. A total of 1,134 blocks with exploratory risk were offered along with 17 marginal fields with small discoveries.
On October 27 2005 the Electricity Agency published the bid notice for the first auction of electric power originating from new generation enterprises. The auction - scheduled to take place on December 16 2005 - concerns new plants that do not yet have concessions or authorizations, and certain other projects.
Investors and other interested parties can now access technical economic viability studies, environmental impact studies and environmental impact reports on hydroelectric developments under analysis by the Brazilian Electricity Agency. The documents concern 17 power plants with public bids planned for 2005.
The Brazilian Electricity Agency (ANEEL) has made available on its website a proposed notice of the third and fourth auctions for the purchase of electricity from existing generator enterprises. The final version will be approved by ANEEL as soon as the Ministry of Mines and Energy defines the format of the auctions.
The Brazilian Electricity Agency is to hold a public hearing on the draft resolution document upgrading the criteria for the investment of resources in electricity efficiency programmes. The hearing aims to improve the allocation of financial resources by directing them to projects of greater technological added value.