Brazil Will Hold Next E&P Licensing Round in August 2004

Brazil's National Petroleum Agency (ANP) is launching Brazil Round 6 for oil and natural gas exploration and production, to be held in Rio de Janeiro, in August 2004.

Blocks in 29 sectors, of 12 Brazilian sedimentary basins, will be offered in this round Pelotas (deepwater), Santos (shallow and deepwater), Campos (shallow and deepwater), Espírito Santo (onshore, shallow and deepwater), Jequitinhonha (deep waters), Camamu-Almada (deepwater), Recôncavo (onshore), Sergipe-Alagoas (deepwater), Potiguar (onshore), Barreirinhas (shallow and deepwater), Pará-Maranhão (deepwater) and Foz do Amazonas (shallow water).

The selected sectors under offer include blocks in three groups of basins: (1) mature onshore basins, (2) main producing basins and (3) exploration frontier basins. In this manner the areas under offer provide opportunities for oil companies of all sizes and profiles.

The Brazil Round 6 schedule includes a public presentation in January 2004, followed by the publication of the Initial Tender Protocol and the release of the data packages in February.

The Initial Tender Protocol, as is customary, will contain a list of the sectors and blocks for bidding, a description of the conditions for participating in the round, the minimum bid values offered by the companies (signature bonus), the duration of the Exploration Phase (one of the stages of the concession contract). The signature bonus, the minimum exploration program and the commitment for acquiring goods and services from local suppliers (local content), will be taken in to consideration for evaluating the bids.

The average block size is predefined according to their location: 30km 2 for onshore blocks, 180 km 2 for offshore shallow water blocks (water depth of less than 400 meters) and 720 km 2 for offshore deep water blocks (water depth between 400 and 2,000 meters).

On the bidding conference, the blocks will be offered simultaneously, by selected sector. The companies may present bids for as many and whichever blocks they wish, provided they comply with the restrictions placed on mature basins, in accordance with their strategy and investment capacity.

Environmental licensing guides, prepared by the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA), will be placed at the disposal of companies qualified for Brazil Round 6 by the ANP, in order to offer guidance to the environmental sensitivity of the areas under offer as well as packages of public data for the offered sectors, including geophysical and well data.

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