Investment Opportunities in Brazil
- Highlights 2026
Free digital technical data
- Concession and Production-Sharing Regimes
The discovery of the Pre-salt Polygon in 2007 led the Brazilian government to establish the Production-Sharing Regime in 2010. Before that, all areas were under a Concession Regime. Since then, Brazil has operated with a mixed regulatory regime.
How the Concession Regime Works
Under the Concession Regime, the concessionaire assumes the risk of investing to discover oil or natural gas. It will then have ownership of any oil and gas discovered in the concession area.
In the bidding rounds, the company or consortium that submits the most advantageous bid, in accordance with the terms of the tender protocol, is awarded the right to explore the area to verify the existence of oil or natural gas deposits.
On that occasion, interested companies or consortia offer an amount for the signature bonus and propose a Minimum Work Program (PEM). This program details the activities, such as seismic surveys and well drilling, that the concessionaire commits to carrying out in the concession area.
Under a concession contract, the concessionaire shall pay various government-take components, such as the signature bonus, royalties, annual acreage fees for onshore blocks, and a special participation for fields that produce large volumes.
The Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) signs these contracts on behalf of the Union – the federal entity of Brazil, which has its own legal personality, collects taxes, owns property, and represents the country abroad.
How the Production-Sharing Agreement Works
For areas in the Pre-Salt Polygon and other strategic areas, the Brazilian National Council for Energy Policy (CNPE) decides whether to hold bidding rounds or directly contract Petrobras. The objective is to safeguard national interests and meet energy policy goals. In both situations, contracts are signed under the production-sharing regime.
If the CNPE decides to hold a bidding round, Petrobras has the preferential right to operate the blocks. If Petrobras chooses to exercise this right, it must indicate the areas of interest and its participation in the consortium, which must be at least 30%.
The CNPE defines the blocks and the technical and economic parameters of the production-sharing agreement, while the ANP organizes the bidding round. The Ministry of Mines and Energy (MME) sets the guidelines for ANP to follow when preparing the bidding documents and contracts, which are later approved by the ministry.
In production-sharing bidding rounds, the winner is the one offering the Brazilian State the largest share of oil and natural gas, that is, the largest portion of exceeding oil.
The consortia exploring a pre-salt area are necessarily composed of a state-owned enterprise, Pré-Sal Petróleo S.A. (PPSA), representing the Union, and the winning companies. The contracts are signed by the MME on behalf of the Union.
- How to contract areas for exploration and production in Brazil
In Brazil, there are two ways to contract areas for oil and natural gas exploration and production: bidding or farm-in.
Bidding
It is the tender process in which companies submit formal proposals and bids to acquire rights to an area for oil and gas exploration. This process can occur through:
- Traditional Bidding Rounds – The government publishes a notice with the rules, the evaluation criteria, and the areas on offer. Companies then have a set period to study the areas before submitting bids in a public session. It is applied both to concession and production-sharing agreements.
- Open Acreage System – It is a continuous bidding process that allows companies to express interest in and bid on available exploration blocks throughout the year. Companies from anywhere in the world may also suggest new areas, subject to ANP’s review and approval. It contrasts with traditional Bidding Rounds, which have specific calendar dates. The system covers both onshore and offshore areas, including the pre-salt polygon. This is now the main model used in Brazil. Read more about Open Acreage in the next section.
Explore opportunities and updates at Rounds ANP.
Farm-in
It is a commercial agreement whereby a company or consortium acquires a partial working interest in an exploration concession or block from another company or consortium, which is the original rights holder. In simple terms, it represents the entry of a new partner into an oil exploration or production project.
- Open Acreage
Since CNPE Resolution No. 27/2021 took effect in December 2021, the Open Acreage system has been the main model for conducting tenders for new oil and gas exploration areas. This system operates under two distinct modalities:
- Production-Sharing Open Acreage (OPP), for strategic areas and the Pre-salt Polygon; and
- Concession Open Acreage (OPC), for all other areas.
Nomination of areas by economic agents
The ANP Resolution No. 837/2021 is a key regulation for the nomination of areas by oil and gas companies from anywhere in the world. This resolution creates a process for the market to suggest new areas of interest for the Open Acreage.
Additionally, it allows companies to change the design of existing blocks to better match identified prospects, leads, or even clusters of structures, making these areas more attractive.
Outcome of the Open Acreage O&G Bidding Rounds
Concession: Five cycles; 340 exploratory blocks and areas awarded; BRL 4.33 billion (≈ USD 835 million) in minimum investment and BRL 1.909 million (≈ USD 368 million) in signature bonuses.
Production Sharing: Three cycles; ten exploratory blocks awarded; BRL 1.91 billion (≈ USD 368 million) in minimum investment and BRL 1.70 billion (≈ USD 322 million) in signature bonuses.
Opportunities in the Open Acreage
As of February 2026, 450 exploration blocks and 5 marginal oil accumulation fields are available through the Open Acreage of Concession (OPC). In addition, 1,435 blocks are being evaluated, along with 8 marginal oil accumulation fields, for possible inclusion in the OPC in the future.
- OPC
And 8 exploration blocks are available through the Open Acreage of Production Sharing (OPP). Additionally, 18 blocks are being evaluated for possible inclusion in the OPP in the future.
- OPP
Explore opportunities and updates at Rounds ANP.
- E&P Strategic Goals and Measures
- Putting the right assets in the right hands: Petrobras’s Divestment Plan is central to this goal, as it allows, for example, the transfer of mature fields to small and mid-sized operators. ANP has also introduced a set of measures designed to support these companies, as explained below.
- Boosting the recovery factor: Brazil’s current recovery factor is only about 10%, which highlights the substantial untapped potential in mature fields.
- Expanding exploratory activities: The pandemic accelerated global energy transition debates and reinforced the urgency of intensifying exploration of Brazil’s oil and gas resources.
- Making marginal discoveries viable: Many discoveries in different environments remain undeveloped, but could become viable if the right incentives are applied.
To reach these goals, we must continue strengthening above-ground competitiveness.
Measures to Stimulate the Sector
- Exploration and production form the foundation of the oil industry: Significant resources are invested in technological development, the expansion of geological knowledge, and the creation of a supply chain that supports these activities. Exploration of awarded fields contributes directly to advancing geological knowledge of Brazil’s sedimentary basins.
- A more diverse sector has emerged from Petrobras’s Divestment Plan: Onshore and shallow-water fields are being are under cession, along with several large offshore Post-Salt concessions.
- Investments in mature fields, Pre-Salt developments, and offshore blocks in the exploration phase: Brazil is well-positioned to expand production and take a leading position in the sector.
- The oil and gas industry is undergoing an unprecedented transformation: Brazil continues to make progress in opening the market. See below the measures already implemented to encourage exploration and production activities.
Incentives for Mature Fields and Small and Medium-Sized Companies
- Royalties reduction: In 2021, ANP approved a royalties reduction for small and medium-sized companies. Earlier, a reduction mechanism for incremental production had already been established. Under this procedure, at the operator’s request, and once economic efficiency is demonstrated, royalties may be reduced to as low as 5% on incremental production from mature fields.
- Mandatory investment or Mergers and Acquisitions (M&A) in onshore and shallow water fields: In 2018, ANP set a deadline for Petrobras to divest fields where it had not been investing in recent years. The objective was to ensure the continuity of operations and maximize the recovery factor. As a result, several fields have already been transferred to small and medium-sized companies.
- Marginal field definition: Specific incentives are to be discussed at a later stage.
- Extending the production phase of contracts for oil and natural gas producing fields: The ANP approved Normative Instruction (IN) No. 11/2022, which sets guidelines for evaluating requests to extend the production phase of these contracts. The analysis of development plans with requests for contract extension must follow the IN guidelines. It should prioritize continuity of production in line with industry best practices. It should also require firm short-term investments aimed at maximizing reservoir recovery. The objective is to guarantee the highest possible return to Brazilian society.
Local Content
- Simplified rules for local content requirements.
- Lower obligations and more flexible compliance procedures.
- Companies may amend older contracts to adjust local content percentages to new rules.
- Companies may replace fines for non-compliance with new investments in goods and services in Brazil.
- Regulation of local content waivers defines criteria, requirements, and procedures for granting exemptions from compliance with local content obligations.
Decommissioning
- Regulation of decommissioning guarantees sets procedures for presenting financial guarantees that secure resources for decommissioning production facilities in oil and natural gas fields.
- Regulation of decommissioning defines rules and procedures for decommissioning exploration and production facilities, re-bidding contracted areas, disposing or reverting assets, meeting remaining obligations, returning the area, and additional measures.
Other Measures
- Reserve-Based Lending (RBL) and Mergers and Acquisitions (M&A) made easier: Regulation covers the assignment of contracts for oil and natural gas exploration and production, the constitution of guarantees on rights arising from these contracts, changes in corporate control of concessionaires or contractors, and other measures.
- Exploratory phase extension: Companies may sign amendments to concession contracts, giving them more time to make the necessary investments in exploration blocks.
- Repetro extension: The Special Customs Regime for the Oil and Gas Industry (Repetro) allows the importation of specific equipment for oil and natural gas exploration and production, without federal taxes or Merchant Navy fees.
- Free digital technical data: Public data on onshore sedimentary basins and offshore wells is available to companies at no cost (https://reate.cprm.gov.br/anp/ and https://www.gov.br/anp/pt-br/assuntos/exploracao-e-producao-de-oleo-e-gas/dados-tecnicos/acesso-aos-dados-tecnicos).
- Natural Gas opportunities
- The New Gas Law, published in 2021, is a decisive step toward an open, liquid, and competitive market.
- A robust regulatory agenda is underway to build the new natural gas market, creating major opportunities in Brazil.
- Efforts are focused on monetizing the huge gas potential in the Pre-Salt.
- Most onshore exploration in new frontier basins targets gas production, and there are important reservoir-to-wire projects in the Parnaíba and Amazonas Basins.
- Downstream opportunities
- Brazil is one of the most attractive emerging markets for renewable energy investments: It is the second largest producer and consumer of biofuels. About 30% of the vehicle fleet is powered by renewable energy, while 70% to 80% of cars are flex-fuel.
- RenovaBio Program: In 2020, more than 14 million tons of greenhouse gas emissions were avoided thanks to the RenovaBio program, which aims to expand the production of biofuels in Brazil.
- Combustível do Futuro Program: This government program, called "Fuels of the Future", promotes large-scale use of second-generation ethanol, research and development in fuel cell technology, green corridors for heavy vehicles powered by biomethane, and the introduction of BioJetFuel, BioCCS, and other technologies.
