On April 22, 2021, the Brazilian National Energy Policy Council (“CNPE”) published CNPE Resolution No. 05/2021 ("Resolution"), which establishes the technical and economic parameters for the 2nd Bidding Round under the Production Sharing regime for the Surplus Volume contracted under the Transfer of Rights regime ("2nd Bidding Round”).

The 2nd Bidding Round will offer the surplus volume of the Sépia and Atapu fields, located in the Santos Basin. Petrobras exercised its preferential right to be Operator with at least 30% participating interest in both offered fields.

The Resolution set the signature bonus due to the Federal Government at (i) BRL 7,138,000,000.00 (seven billion one hundred and thirty-eight million reais)  in the Sépia field and (ii) BRL 4,002,000,000.00 (four billion and two million reais) in the Atapu field.

During the term of the Production Sharing agreements, the minimum percentage of the federal government’s profit oil was defined as follows: (i) 15.02 percent for the Sépia field and (ii) 5.89 percent for the Atapu field, considering the price of a barrel of Brent oil of USD 50.00 (fifty US dollars) and the average daily production of 14,500 (fourteen thousand and five hundred) barrels of oil per active producing well, pursuant to the table on the Tender Protocol.

In the production phase, each month the contractor(s) will acquire the production share corresponding to the cost oil, observing the limit of 80% (eighty percent) of the gross value of production in each offered area. Costs that exceed 80% will be accumulated for acquisition in subsequent years.

The Resolution further establishes that the contractors’ owed amounts to Petrobras under the Production Sharing regime will be recoverable as cost oil, under the compensation provided for in CNPE Resolution No. 03/2021 (for more information, please refer to our previous Legal Update).

The minimum mandatory local content applicable in the production development stage of the Sépia and Atapu fields shall observe the following criteria: (i) 25 percent for the well construction; (ii) 40 percent for the collection and offloading system; and (iii) 25 percent for the stationary production unit. Such percentages will not be subject to local content waiver mechanisms.

For more information in relation to this Legal Update, please contact EnergypartnersTC@mayerbrown.com.