By Brazil Stock Guide — Brazil will hold what is expected to be the largest oil acreage auction in the history of regulator ANP on Wednesday, offering hundreds of exploration blocks across the country and potentially raising at least R$2.17 billion in signing bonuses.
The auction day will be split into two rounds. Starting at 9 a.m., the ANP will hold the fourth cycle of its Permanent Production Sharing Offer, with 13 pre-salt blocks in the Campos and Santos basins. From 2 p.m., the regulator will hold the sixth cycle of its Permanent Concession Offer, with 313 exploration blocks across northern, northeastern and southeastern Brazil.
If all areas attract bids, the government could collect roughly R$2.17 billion in minimum signing bonuses. The auction will also mark the last bidding round held at the ANP’s headquarters in downtown Rio de Janeiro. From 2027, auctions are expected to take place at the B3 stock exchange in São Paulo.
A total of 19 companies are qualified to submit bids in the production-sharing round, while 46 companies are eligible to participate in the concession auction.
Pre-salt production-sharing round
The fourth cycle of the Permanent Production Sharing Offer will be the largest pre-salt acreage offering since the ANP adopted the current permanent-offer model in 2022.
The regulator will offer five blocks in the Campos Basin and eight in the Santos Basin. Qualified bidders include Petrobras, Shell, Chevron, TotalEnergies, BP, Equinor, CNOOC, Petronas, QatarEnergy and Brazilian independent producer PRIO, among others.
Competition could be particularly strong for areas located close to major producing fields, where geological knowledge and existing infrastructure can reduce development risks and costs.
Under Brazil’s production-sharing model, the federal government retains ownership of the oil and gas produced. Companies are entitled to recover eligible development and operating costs through so-called cost oil, while the remaining production — known as profit oil or surplus oil — is divided between the government and the contractor.
Bidders compete mainly by offering the government the highest share of future surplus oil. The 13 blocks carry fixed signing bonuses totaling about R$1.23 billion, payable to the federal government if the areas are awarded. Payments are expected to be made by the end of December.
Brazil has used production-sharing contracts since 2010 for areas located within the pre-salt polygon or classified as strategic by the National Energy Policy Council.
Concession auction
The second auction will use Brazil’s concession regime, under which companies acquire the right to explore and produce hydrocarbons and take ownership of the oil and gas they extract, subject to royalties, taxes and other government payments.
The ANP will offer 313 exploration blocks across 22 sectors in nine sedimentary basins. If all blocks are awarded at their minimum signing-bonus levels, the concession round could generate about R$940.9 million in additional government revenue.
Unlike the production-sharing auction, signing bonuses in the concession round are themselves part of the bidding process. For exploration blocks, offers are evaluated based primarily on the signing bonus, together with the bidder’s Minimum Exploration Program, which sets the exploration work the company commits to carrying out during the initial phase of the contract.
That means the final proceeds from the concession round could exceed the minimum amount embedded in the tender.
The field of qualified bidders includes Petrobras and several global oil majors, as well as Brazilian companies such as PetroReconcavo, Origem Energia, Eneva, PRIO and Fluxus. ExxonMobil is also qualified for the concession round.
The Ceará Basin will be the only area from Brazil’s Equatorial Margin represented in Wednesday’s auction. The basin has yet to see deepwater oil and gas production.
The Foz do Amazonas and Pelotas basins, which attracted significant attention in previous bidding rounds, will not have offshore blocks on offer this time.
Some of the concession acreage is onshore, including areas in the Tacutu Basin near Brazil’s border with Guyana, which is being offered by the ANP for the first time.
Oil exploration in some onshore areas has drawn opposition from environmental organizations over potential impacts on Indigenous and traditional communities.
Environmental group Arayara filed a civil lawsuit in late September seeking to stop the offering of blocks in the Parnaíba Basin and has called a protest outside the ANP headquarters during Wednesday’s auction.
The auction comes as Brazil seeks to sustain oil and gas investment beyond its existing producing fields while expanding exploration into new frontiers. The key test will be how many blocks attract bids — and how aggressively companies compete for the most sought-after pre-salt acreage.
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