Oil and Gas Reform: New Trends in Brazil

The opening-up of the upstream activities in Brazil dates back the 70s with the signature of the first “risk contracts” between PETROBRAS and other oil companies in order to explore certain offshore areas selected by PETROBRAS.

At that time, PETROBRAS, as a national oil company (“NOC”), was the sole responsible for the performance of all upstream activities in the Brazilian sedimentary basin.

The participation of other oil companies was based on services agreements, which provided for the payment of services in kind in the case of success in the exploration phase. Development and Production activities were exclusively conducted by PETROBRAS.

This model allowed PETROBRAS to become familiar with exploration activities in shallow and deep waters located in the Brazilian sedimentary basins (especially in the Campos basin), and it is one of the main reasons of PETROBRAS' success in geological and geophysical campaigns in the subsequent years.

The opening of the upstream activities in the 90s

Constitutional Amendment # 9/95

Following the international trend started in the 80s, the Constitutional Amendment #9, dated of November 9, 1995, marked the beginning of a gradual distancing between the State and the upstream activities. This gradual distancing came from the realization that the State could no longer function as the sole prov