Only on June 6th, the National Council for Energy Policy (“CNPE”) published, in the Union’s Official Gazette, its Ordinance No. 8/2016 (dated of December 14th, 2016) that establishes the guidelines for the unitization proceedings regarding oil and natural gas deposits that extends to open acreage areas.
The abovementioned Ordinance provides that whenever the National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) becomes aware, it shall immediately contact the Ministry of Mines and Energy (“MME”) to inform about the possibility of extension of a deposit to open acreage areas, which shall be promptly contracted for the execution of joint exploration and production activities. This contract shall preferably be done prior to the shared deposit’s commerciality declaration.
The ANP shall regulate the criteria regarding the ownership and apportionment of shared deposit’s production involving an open acreage area prior to the effective date of a unitization agreement.
Should the contract of an open acreage area occur before the settlement of the cost oil and the profit oil regarding the original contract in the portion of the area already awarded, the Union will remain as creditor or debtor of the eventual balance.
It shall be highlighted that the prerogatives of the Union’s representatives in the unitization agreements, especially the ones related to the non-recognition of certain expenses incurred by the operator of the awarded area adjacent to the open acreage, will not be transferred to the area’s new contracting party or concessionaire. The recovery of expenses that were not recognized by the Union shall be negotiated by the involved parties in the shared deposit, in accordance with the oil industry best practices.
The cost oil and profit oil derived from the Union’s participation in the shared deposit’s production shall be submitted to the monetary adjustment, in accordance with the General Market Price Index (“IGP-M”), published by Fundação Getúlio Vargas (“FGV”), or any other index that may replace it, being forbidden the capital interest.
The royalties rate established in the exploration and production agreement and the special participation provided in the concession agreement shall be applicable to the production made before the effective date of the unitization agreement by the operator of the awarded area adjacent to the open acreage. Regarding the open acreage area, the expenses qualified as research, development and innovation in the exploration and production agreement will not be due.
Felsberg Advogados remains at your entire disposal for any clarifications that may be necessary in relation to the matters covered above. Should you have any further doubts, please contact Luis Menezes (email@example.com), our partner responsible for the Oil and Gas Department.
OIL AND GAS DEPARTMENT
This article is intended exclusively to provide information and does not contain any opinion, recommendation or legal advice from Felsberg Advogados in relation to the issues addressed.