Open Acreage in the Concession Model will generate over R$ 400 million in investments

ANP this week held the public bidding session of the 3rd Cycle of the Open Acreage in the Concession Model. Fifty-nine exploration blocks were acquired in six basins, which generated BRL 422,422,152.64 in signature bonus – a premium of 854.84% – and will result in at least BRL 406,290,000.00 in investments in the first phase of the contract alone (exploration phase). 

Due to the diversity of the blocks acquired, investments will take place in six states: Rio Grande do Norte, Alagoas, Bahia, Espírito Santo, Santa Catarina, and Paraná. The blocks were acquired by a total of 13 companies, one of which is a new entrant in Brazil (CE Engenharia).

ANP's Director General, Rodolfo Saboia, highlighted the success of the results: 
“The result of today's bidding round exceeded the best expectations. First, we obtained record collections in Open Acreage cycles, which consolidates this model as the main form of bidding areas for exploration and production of oil and natural gas. We also achieved a record in the number of blocks awarded in this model, adding 7,855 km² of exploratory area. More importantly, we achieved record minimum investment commitments. These investments will result in economic activity, employment and income for Brazilians,” he said.   

Saboia also highlighted the increase of space for small and medium producers: 
“This is something encouraged by ANP, as these companies are the ones that traditionally acquire more local goods and services. I also highlight the resumption of exploration in the state of Alagoas and the result of offshore blocks. Eight blocks were awarded, with competition, on the exploratory frontier of the Santos Basin. Anyway, I consider the result really exceptional for Brazil. It shows that the country remains competitive, attracting exploration investments, with a diversity of agents, national and foreign, even in a scenario of energy transition. And it also shows that there is a lot of exploration to be done beyond the pre-salt,” he concluded.   

This was the 3rd Cycle carried out under the concession regime. In the 1st Cycle, which took place in 2019, 33 blocks and 12 areas with marginal accumulations were acquired, which generated R$22.3 million in signature bonus and R$320.3 million in investments. In the 2nd Cycle, in 2020, 17 blocks and one area with marginal accumulations were acquired, generating R$ 56.7 million in signature bonus and R$ 160.6 million in investments.  

In the concession regime, the winners are defined by two criteria: signature bonus (80%) and minimum exploration program – PEM (20%) offered by the bidders. 

Bonuses are the cash values ​​offered by the companies, starting from a minimum defined in the tender protocol, and are paid by the winners before signing the contracts. The PEM, measured in work units (WUs), defines the minimum of activities that the company proposes to carry out in the block during the first phase of the contract (exploration phase), such as seismic, well drilling, etc. 

Click here to see the results by basin, sector, and block.

In the 3rd Cycle of the Open Acreage in the Concession model, 14 sectors of exploration blocks were on offer in seven basins: Santos, Pelotas, Espírito Santo, Recôncavo, Potiguar, Sergipe-Alagoas and Tucano. The event was hybrid: the public bidding session was in person, in Rio de Janeiro, with the participation of company representatives and ANP employees responsible for holding the event; and there was a live broadcast on the ANP channel on YouTube, whose recording can be accessed here . 

What is the Open Acreage  

The Open Accreage is currently the main model for the bidding of areas for exploration and production of oil and natural gas in Brazil. In this format, there is a continuous supply of exploration blocks and areas with marginal accumulations located in any onshore or offshore basins.

In this way, companies do not need to wait for a “traditional” bidding round to have the opportunity to acquire a block or area with marginal accumulation — they become permanently on offer. In addition, companies have as much time as they deem necessary to study the technical data of these areas before making an offer, without the limited term of the tender protocol for a bidding round.  

Once its application has been approved in the Open Acreage, the company may express interest in one or more of the blocks and areas offered in the tender protocol. After approval by the Special Bidding Commission (CEL) of one or more expressions of interest, a cycle of the Open Accreage begins, with the disclosure of its schedule by the Commission. The cycles correspond to the holding of public bidding sessions for one or more sectors that had an expression of interest. On the day of the public session, registered companies can make bids for blocks and areas with marginal accumulations in the sectors being tended in that cycle.  

Open Acreage in the Concession and Production-Sharing models  

Until December 2021, the Open Accreage was carried out exclusively under a concession contracting regime. This limitation was overcome with the publication, on December 24, 2021, of Resolution No. 27/2021 of the National Energy Policy Council (CNPE), which establishes that fields or blocks in the Salt Polygon or in strategic areas may be tendered in the Open Acreage system upon specific determination of the CNPE, with the definition of the parameters to be adopted for each field or block. In such cases, the bidding will be under the production-sharing regime.  

Thus, there are now two models of the Open Acreage: in the Concession Model, now in its 3 rd Cycle, whose public bidding session took place today; and in the Production-Sharing Model, which does not yet have a date to be held, as is currently in the process of developing its tender protocol and contract models.