On February 9, 2022, Brazil’s National Energy Policy Council ("CNPE") published CNPE Resolution No. 1/2022, contemplating announcing the exercise of Petróleo Brasileiro S.A.’s ("Petrobras") preferential right to be the operator in two Pre-salt areas to be offered in the Permanent Offer system under the production sharing regime.

Petrobras exercised its preferential right to be the operator in Água Marinha and Norte de Brava, with a minimum participating interest of 30%. These two areas are among the 11 areas authorized to be included in the Permanente Offer by CNPE Resolution No. 26/2021 (detailed in our previous Legal Update).

For these two areas, pursuant to Decree No. 9.041/2017, Petrobras will have the “pull out option” to refuse to enter into a production sharing agreement if the federal government’s profit oil percentage offered by another company or consortium — declared as the winner — is higher than the minimum percentage established in the tender protocol.

Petrobras can participate on equal terms and conditions with the other bidding companies in relation to the other nine areas offered, which are: Esmeralda, Ágata, Bumerangue, Cruzeiro do Sul, Sudoeste de Sagitário, Itaimbezinho, Turmalina, Jade and Tupinambá.