To Encourage Onshore Field Exploration, Government Will Offer Large-Scale Regional Blocks

It Is Understood That The Offer Of Large Areas, Which Are Called “Regional Blocks” Will Increase Attractiveness Due To The Greater Volume Of Available Data

Based on the Revitalization Program of the Oil and Natural Gas Exploration and Production Activity in Land Areas created in 2017, during Michel Temer’s government, and continued in Reate 2020, the government aims to offer large onshore blocks, up to 36,000 km², and reduce costs and entry barriers for the contracting of exploration areas.

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The guidelines proposed by the Ministry of Mines and Energy and the studies by the National Agency of Petroleum, Natural Gas, and Biofuels (ANP) entered into public consultation for 30 days.

It Is Understood That The Offer Of Large Areas, Which Are Called “Regional Blocks” Will Increase Attractiveness Due To The Greater Volume Of Available Data, Possibility Of Multiple Discoveries, And The Ease Of Contracting, Compared To The Investment Required To Acquire Several Smaller Onshore Blocks.

Not Only Geological Data and Oil Potential but Also Existing Infrastructure, Including Gas Pipelines, Transmission Lines, and Roads, For Example, Were Considered In The Studies By The National Agency Of Petroleum, Natural Gas, And Biofuels (ANP)

Initially, Regional Onshore Blocks Were Identified With Areas Ranging From 7,000 To 36,000 Km² Suitable For Offering: AM-OP-01 And AM-OP-02, In The Amazon Basin; PAR-OP-02 And PAR-OP-03, In The Paraná Basin; PN-OP-01 And PN-OP-02, In The Parnaíba Basin; And SOL-OP-01 And SOL-OP-02, In The Solimões Basin.

The Offer Also Includes Prioritizing Data Acquisition And Changing The Approval Of Exploratory Plans (Successive Phases, According To Confirmed Results), Reducing Investment Guarantees For Bids, And Charging Values For Area Retention Close To The Minimum.

For The Ministry Of Mines And Energy, The Signature Bonus For Contracts Should Not Discourage Contracting Of The Blocks: “In The ‘Regional Block’ Model, With Large Dimensions, Care Must Be Taken To Adjust The Procedure So As Not To Establish Prohibitive Values, Which End Up Driving Away Potential Interested Parties In Investing In The Exploration Of These Basins.”

In Parallel, With The Idea Of Reducing Costs For Companies In Exchange For An Increase In Investment Volume For Greater Production, The ANP Receives Contributions For The Rules Of Reducing Royalties For Small And Medium-Sized Companies – The Draft Proposes Charging A Rate Of 5% (Legal Minimum) To 7.5%.

In The End, The Expectation Is That Royalty Collection Will Be Practically Equalized. Check More Details On The Agency’s Website

by -epbr