The National Petroleum Agency recently led the 15th bidding round in Rio de Janeiro, which reinforced international oil companies' (IOCs') interest in investing in Brazil. Eleven foreign and two national oil companies committed to paying approximately R8 billion in signature bonuses. The highest commitment was presented by the consortium between ExxonMobil, Petrobras and QPI. The IOCs have demonstrated their belief that the geological reserves in the Campos Basin are some of the most prolific on the planet.
The Brazilian National Agency of Petroleum, Natural Gas and Biofuels recently published Public Consultation and Public Hearing Notice 4/2018, which establishes the requirements necessary to undertake the production of biofuel activity and the operation of producing facilities. The proposal unifies the biofuels regulatory framework (biodiesel, biomethane and ethanol) in order to simplify administrative procedures, foster investments in the sector and reduce costs resulting from the regulation.
In order to improve the definition of and conditions for the use and disposal of fluids, gravel and cement paste resulting from drilling and production activity in Brazil, the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA) recently published Normative Instruction 01/2018. In doing so, the IBAMA established new definitions and specific criteria that must be followed, subject to the penalties provided in the law.
The Brazilian National Agency of Petroleum, Natural Gas and Biofuels recently published Notice of Public Consultation and Public Hearing 20 in order to collect input regarding the new rule which will increase the flexibility of the local content rules provided for in concession contracts entered into between the seventh and 13th bidding round for onerous assignment, as well as the first production sharing bidding round of the exploration of oil and natural gas blocks.
The initial expectation from some market analysts with respect to the outcome of Brazil's 14th bidding round was conservative, with Brazil's political turmoil and the downturn in the oil and gas sector clearly inciting this uncertainty. However, it seems that the government's initiative to extend the special customs regime for the import of rigs, vessels and equipment until 2040, as well as its adjustment of the rules in relation to local content requirements, ensured the round's success.