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CNPE approves guidelines for the Transfer of Rights (TOR+) bid, expected to be held in October 2019

Oil and Gas

The Brazilian National Council of Energy Policy (Conselho Nacional de Política Energética - "CNPE") approved on 28 February the guidelines for the TOR+ bid, expected to be held on October 28th, 2019.

The CNPE decided that the bid winner must pay a compensation to Petrobras for acquiring part of the assets and production related to investments already performed by Petrobras in the areas.

The CNPE also decided that: (i) it will use the production sharing regime for the TOR+ bid; (ii) the bid will contemplate Atapu, Búzios, Itapu and Sépia areas, all located in the Santos Basin; and (iii) Petrobras and the bid winner will have to sign an agreement to set the details over the unification of the operation of the projects.

In addition, CNPE requested its participants to simulate different scenarios so that CNPE can define the signature bonus, the minimum percentage of profit oil and the compensation due to Petrobras by the bid winner.

CNPE will further discuss and decide on this topics in another meeting scheduled for the end of March. It is expected that the CNPE will authorize the TOR+ bid round in such meeting.

According to government sources, the government estimates a total amount of BRL 100 Billion in signature bonuses for the TOR+ bid round.

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