1 Table of Contents

• 1.1. List of Tables
• 1.2. List of Figures

2. Executive Summary

• 2.1. Regime Overview ─ Concession Agreements
• 2.2. Regime Overview - Production Sharing Agreements
• 2.3. Timeline

3. State Take Assessment

4. Key Fiscal Terms - Concession Agreement

• 4.1. Royalties, Bonuses and Fees
• 4.2. Direct Taxation
• 4.3. Indirect Taxation
• 4.4. Tax Incentives
• 4.5. Research, Development, and Innovation Expenditure
• 4.6. Rio de Janeiro State Environmental Levy (Suspended)
• 4.7. License Terms

5. Key Fiscal Terms - Production Sharing Agreement

• 5.1. Royalties, Bonuses, and Fees
• 5.2. Cost Recovery
• 5.3. Profit Sharing
• 5.4. Taxation
• 5.5. Research, Development, and Innovation Expenditure
• 5.6. Petrobras Participation
• 5.7. License Terms - Production Sharing Rounds

6. Regulation and Licensing

• 6.1. Legal Framework
• 6.2. Institutional Framework
• 6.3. Licensing Process
• 6.4. Local Content

7. Appendix

• 7.1. References
• 7.2. Contact Us

Brazil Upstream Fiscal and Regulatory Guide

Summary

Brazil offers regular licensing rounds as defined in the 2017-2021 bidding schedule. Each year a concession round and a production sharing agreement round are held, in addition to the open acreage round. In Q3 2019, Brazil will hold the Transfer of Rights Round in which four fields, initially assigned to Petrobras (under concession agreements), will be offered under production sharing agreements. Brazil’s Bolsonaro administration continues to try to get more international investment in both the Pre-Salt polygon and more mature areas. Given current financial problems linked to its high debt, in the coming years Petrobras will selectively choose the blocks that it wants to operate and will divest of its stakes in various mature fields, which are no longer essential to its business plan.

“Brazil Upstream Fiscal and Regulatory Guide”, presents the essential information relating to the terms which govern investment into Brazil’s upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Brazil’s upstream oil and gas investment climate.

Scope

- Overview of current fiscal terms governing upstream oil and gas operations in Brazil
- Assessment of the current fiscal regime’s state take and attractiveness to investors
- Charts illustrating the regime structure, and legal and institutional frameworks
- Detail on legal framework and governing bodies administering the industry
- Levels of upfront payments and taxation applicable to oil and gas production
- Information on application of fiscal and regulatory terms to specific licenses
- Outlook on future of fiscal and regulatory terms in Brazil.

Reasons to buy

- Understand the complex regulations and contractual requirements applicable to Brazil’s upstream oil and gas sector
- Evaluate factors determining profit levels in the industry
- Identify potential regulatory issues facing investors in the country’s upstream sector
- Utilize considered insight on future trends to inform decision-making.