Brazil schedules fifth licensing round under new bidding method

Brazil's National Petroleum Agency (ANP) scheduled its fifth licensing round for oil and natural gas exploration and production for June under a new bidding method.

By an OGJ correspondent

RIO DE JANEIO, Nov. 7 -- Brazil's National Petroleum Agency (ANP) scheduled its fifth licensing round for oil and natural gas exploration and production for June under a new bidding method designed to encourage participation by new small and medium-sized companies.

Under the new method, sedimentary basins will be divided into sectors and subdivided into cells, which can be offered individually or in groups, depending on geographical locations on land or in shallow or deep waters. Bids will be accepted simultaneously from interested companies for all areas except those that are already under concession. The method will enable companies to design exploration areas through their selection of cells, said ANP officials. They said that system was successfully adopted in other regions with high exploration activity.

Round 5 will offer 1,122 exploration cells, 824 offshore and 298 onshore, in 21 sectors of 9 sedimentary basins in 10 states.

Cells will be offered in three sizes for different locations:

-- Onshore, 30-32 sq km, the size of a single cell.

--In shallow waters of less than 400 m, 171-192 sq km, which equals 6 cells.

-- In deeper waters to 2,000 m, 646-768 sq km the equivalent of 24 cells.

The basins and the number of cells to be offered include: Pelotas, 33 cells in deep waters; Santos, 306 cells in shallow waters and 20 in deep waters; Campos, 38 in shallow waters and 6 in deep waters; Espirito Santo, 191 in shallow waters and 90 onshore; Jequitinhonha, 12 in deep waters; Recôncavo, 42 onshore; Potiguar, 166 onshore; Barreirinhas, 62 in shallow waters; and Foz do Amazonas, 156 in shallow waters.

The area of cells to be offered in Round 5 totals 195,701.54 sq km, which corresponds to 3% of the total area of Brazil's sedimentary basins.

For the first time, ANP also will permit companies to define their minimum exploratory programs, involving data research and drilling.

ANP will provide registered companies with an environmental sensitivity report 6 months prior to Round 5, along with a general licensing guide for the offered areas.

Meanwhile, Sebastião de Rego Barros, ANP executive-director, has declared he has no intention of resigning when the new government under Luiz Inacio Lula da Silva, president-elect of the Workers Party, takes office in January. Because Barros's mandate extends to January 2005, said local analysts, Lula may not be able to interfere in ANP activities.

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