Energy and Natural Resources Newsletter | February 2025

Open Acreage: Beginning of the 5th Cycle of Concession Open Acreage

On February 11, 2025, the ANP published the schedule for the 5th Cycle of Concession Open Acreage (“OPC”).

According to the current OPC notice, 332 exploratory blocks were made available, located in several sectors. On March 07, 2025, the National Agency for Petroleum, Natural Gas and Biofuels (“ANP”) published a list of 30 companies with active registration that can participate in the 5th OPC Cycle.

By March 31, 2025, registered companies must submit the declaration of interest, along with the corresponding offer guarantee, in compliance with the objects on offer in the notice. However, listed bidders that do not submit a declaration of interest can submit offers in consortium with a bidder that has declared interest within the period of the 5th OPC Cycle. The public bidding session is scheduled for June 17, 2025.

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ANP holds public hearing on potential compliance with PEM outside area under contract

On February 11, 2025, the ANP held a public hearing on a draft resolution establishing the requirements and procedures for complying with the Minimum Exploratory Program (“PEM”) outside the limits of the original area under contract.

The draft resolution proposed by the ANP establishes that, if the operator of the concession contract is interested in carrying out the PEM outside the limits of the original area, a request must be submitted to the ANP indicating the contract of origin and the receiving area in which the work units (“UTs”) are to be carried out. The number of UTs to be considered in the receiving area will be chosen by the operator, provided that, the operators of the original and receiver contracts are the same for the contracted area. 

Additionally, the draft resolution also seeks to define the requirements for complying with the PEM in areas that are not linked to a contract for exploring and producing oil and natural gas, excluding, however, the Pre-Salt and strategic areas as eligible for using such mechanism.

The suggestions received through the consultation and hearing will be analyzed by the ANP’s technical area to amend the draft. The final text will be subject to a legal analysis by the Brazilian Office of the Attorney General (“PGF”) and the ANP, and it must be approved by the ANP’s Collegiate Board before it is published.

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Prior consultation approved for new regulation on transport tariffs

On February 06, 2025, the ANP approved the prior consultation, for a period of 45 days, regarding Technical Note No. 1/2025/SIM/ANP, involving a study on regulating the criteria used to calculate natural gas transportation tariffs, the procedure for approving transportation gas pipeline tariffs, as well as the criteria and guidelines for revenue transfer mechanisms between interconnected natural gas carriers.

As informed by the ANP, the purpose of the prior consultation is to collect contributions and suggestions from society to support the regulatory impact analysis (“AIR”) and the future draft resolution that will provide for the criteria for calculating the road transport tariffs for natural gas transportation services.

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Investments in oil and gas production can exceed BRL 600 bi over the next five years

On February 14, 2025, the ANP published data from the Dynamic Dashboard for Activity, Investments and Production Projections in the Production Phase, indicating that between 2025 and 2029 approximately BRL 609 billion are expected to be invested in the production phase of current contracts for exploring and producing oil and natural gas in Brazil. In 2025, investments are estimated at about BRL 140 billion.

During this five-year period, production is expected to reach 680 thousand cubic meters per day (m³/d) of oil, which is equivalent to approximately 4.28 million barrels per day. Natural gas production is expected to reach 221 million m³/d – 193 million m³/d after the CO2 reduction.

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Four additional OPP blocks approved

On February 18, 2025, the  National Energy Policy Council (“CNPE”) approved the inclusion of Hematita, Siderita, Limonita, and Magnetita blocks in the Production Sharing Open Acreage (“OPP”).

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2025 Capacity Reserve Auction: MME establishes auction system and ANEEL initiates public consultation

On February 10, 2025, the Ministry of Mines and Energy (“MME”) published MME Normative Ordinance No. 100/2025, which establishes the system for holding the Auction for Contracting Reserve Capacity in the 2025 Capacity Reserve Auction (“LRCAP 2025”).

LRCAP 2025 is scheduled for June 27, 2025, and involves ten products for contracting:

• Thermoelectric power plants (natural gas or biofuels).
• Hydroelectric power plants for projects to expand the installed capacity of centrally-dispatched plants. These plants must not have been extended or tendered in accordance with Law 12,789/13, unless the plant has been tendered under the quota regime and has part of the physical warranty outside this regime.

• the physical warranty outside this regime.

The following rules stand out in the new system:

• The 2025 LRCAP negotiation will be divided into six rounds, allocated yearly according to the respective initiation of supply of projects to be contracted. These rounds will be subdivided into an “initial phase” (in which only one bid for each project in the round) and a “continuous stage” (in which bids will be associated with bidders classified in the initial phase).
• For each thermoelectric project in each “Thermoelectric Power” product, the maximum amount that can be offered in the LRCAP 2025 equals the availability of thermoelectric power established by the Energy Research Company (“EPE”) technical qualification.
• For each hydroelectric project in each “Hydroelectric Power” product, the maximum amount that can be offered in the LRCAP 2025 is equal to the availability of hydroelectric power. Power availability is established under the terms of the EPE technical qualification, limited to the added power (new generating units) multiplied by the contribution factor (maximum capacity to be traded after the expansion of installed power).

Following the publication of MME Normative Ordinance No. 100/2025, ANEEL initiated Public Consultation No. 010/2025 to receive contributions regarding the 2025 LRCAP notice by April 14, 2025. The auction will be coordinated by ANEEL and carried out through the CCEE’s online platform. The notice is expected to be approved and published by May 22, 2025.

Capacity Reserve Auctions are fundamental to ensure Brazil’s energy security, given that contracted plants can be a valuable resource to ensure energy supply in case of shortage. In addition, these auctions diversify the energy matrix, which increases the resilience of the system and foster competition and transparency within the sector, attracting investments and stimulating technological innovation.

Click here to access Normative Ordinance No. 100/2025

Click here to access Public Consultation 010/2025

ANEEL approves amendment to energy distribution contracts

On February 25, 2025, ANEEL published Order No. 517/2025, which approved the amendment to energy distribution agreements that extends them for 30 years. This measure was taken in compliance with Article 4 of Law No. 9,074 of 1995, which gives ANEEL the competence to analyze the extension of concession agreements.

According to ANEEL, this extension aims to:

• Increase the resilience of the distribution network against climate events;
• Strengthen the economic and financial sustainability of the concession;
• Enable the development of a differentiated plan to address non-technical losses in areas with severe operating restrictions (“ASRO”); and
• Enable the implementation of more up to date tariff structures, providing consumers with more tax planning alternatives.

Among the topics analyzed by ANEEL, we highlight distributors’ obligation to waive lawsuits that contest any clauses of the amendment or provisions set by Decree No. 12,068 of 2025. In this regard, Demarest partner Henrique Reis is critical of the amendment’s lack of specificity and legal certainty. In an article published in Brazilian magazine Valor Econômico, he argued that the waiver clause should be excluded to mitigate legal risks and uncertainty.

Requests for fast-track renewal must be submitted to ANEEL within 30 days of the draft amendment publication. Subsequently, ANEEL will have 60 days to submit a recommendation to the MME, evaluating compliance with technical and economic-financial indicators. Next, the MME will have 30 days to make a decision and call distributors to execute the agreement. Finally, distributors will have 60 days to enter into the new concession agreement amendments.

Click here to access Order No. 517/2025

Click here to access the amendment

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