Based on the information provided by the Assistant Secretary of Petroleum, Natural Gas and Biofuels of the Ministry of Mines and Energy (“MME”), the National Council of Energy Policy (“CNPE”) shall analyze the guidelines related to the management of the commercialization agreements of the Union’s oil by the PPSA. The CNPE’s analysis is necessary in order to have the government receiving the amount derived from the areas which commercialization shall be executed by PPSA. The expectation is that the government receives R$ 768 million from the production of unitization and production sharing areas over the period from 2015 to 2017, counting with the Libra’s production, that its production tests is forecast to begin in 2017. (12/01/2016)
The National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) and operators discussed about the changes on the rules related to the analysis and approval of total or partial assignments of fields and blocks in Brazil. The ANP is working in a new ordinance for this matter, that is currently being constantly discussed due to the Petrobras’ divestment plan. The new ordinance proposes specific process for the events in which the assignments are derived from mergers, spins-off and mergers by acquisition. The ANP shall analyze the comments and queries raised during the consulting period and the expectation is that the new ordinance shall be published in 2017’s first semester. (12/06/2016)
The ANP’s Board decided to postpone to May 11th, 2017, the delivery of the offers in the ANP’s 4th Concession Marginal Accumulations Round, delaying more than one additional month when compared to the original schedule. The new dates, published on December 12th, provides February 3rd, 2017, as the final day for the registration period, and plan to sign the agreements in August. The round, that will offer ten fields, has some new rules, as the prohibition of fracturing – in order to avoid any judicial contest on further operations – and the exclusion of local content as a bid factor. (12/12/2016)
The ANP terminated the concession agreement of the block SF-T-119, operated by Petra, in the São Francisco Basin. The decision was taken by the agency due to Petra’s default in complying with the obligations set forth in the agreement. The ANP also determined the execution of the financial guarantee related to non-fulfillment of the block’ second exploration period. The SF-T-119 was awarded in the ANP’s 7th Concession Bid Round in 2008. Petra submitted an appraisal plan (“PAD”) for the area, that included others five blocks in the basin, but such PAD was denied by the ANP (12/12/2016)
The government will offer 291 blocks in the ANP’s 14th Concession Bid Round, being ten of them located in the Campos Basin’s ultra-deep waters, in the states of Espírito Santo and Rio de Janeiro. The areas’ list was approved on December 14th, 2016, by the CNPE, during its collegiate body’s 33rd meeting. The following matters were also approved: holding of the ANP’s 4th Concession Marginal Accumulations Round and the ANP’s 2nd Production Sharing Bid Round, the guidelines for unitization agreements involving open acreage areas, the natural gas’ policies, the extension of the exploration phase of the ANP’s 11th Concession Bid Round’s blocks, the oil barrel’s minimum price for purposes of royalties’ calculation and the rules to commercialize the Union’s oil and gas under the production sharing agreements. (12/14/2016)
The government will create a technical committee to lead the opening of the Brazilian natural gas market. The Technical Committee for Development of the Natural Gas Industry (“CT-GN”), as it was denominated, shall have 120 days to submit a proposal of actions to improve the gas’ regulatory framework, which shall be further submitted to the Congress. The group shall be composed by representatives from several bodies of the Federal Government, associations, agents of the natural gas industry and civil society, and professors. The CT-GN’s creation was approved on December 14th, in a CNPE’s meeting. (12/14/2016)
The exploratory programs’ first phase of the blocks offered in the ANP’s 11th Concession Bid Round, held in 2013, may be extended for more two years. The suggestion of a 24 months’ extension was approved by the CNPE on December 14th and further confirmed by sources that participated in the meeting held in Brasília. The extension proposal of the ANP’s 11th Concession Bid Round’s deadline was submitted in the CNPE’s meeting by the Ministry of Mines and Energy, Mr. Fernando Coelho Filho, who said that most of the companies are requiring a 36 months’ extension due to delays on the environmental licensing process and to the oil price fall. The CNPE approved the appointment of a 24 months’ limit, but the ANP shall evaluate this matter in each case and grant the extension when it considers the request consistent under a legal and technical analysis. (12/14/2016)
The Brazilian Institute of Petroleum (“IBP”) shall appeal in Courts aiming at extinguishing the recently approved bill of law of the Rio de Janeiro State representative Mr. André Ceciliano that canceled the Law 41,142/2008, reducing the tax on the distribution of goods and services (“ICMS”) in the State of Rio de Janeiro for several equipment used in the oil exploration and production and listed in the Repetro. The IBP has not decided yet which action it will take against the project, but it assures that this matter is being internally analyzed with a great priority. (12/15/2016)
The federal government has until March 1st to publish in the Official Gazette the ordinance related to the oil minimum price for purposes of royalties’ calculation. This action was determined by the Ministry of the Federal Supreme Court (“STF”), Mr. Luiz Fux, on December 15th, during the conciliation session held due to a suit proposed by the State of Rio de Janeiro’s government, which questioned the CNPE’s ordinance related to this matter. The new ordinance shall be based on the result derived from the public consult held by the ANP and on the guidelines established by the CNPE. Fux and the parties involved in the process understood that the government shall be the one responsible to determine the strategies, while the ANP shall have the prerogative to set forth the criteria to calculate the minimum price. (12/15/2016)
On December 19th, the federal government officially announced the Brazilian Oil and Gas Forum, that is a program directed to stimulate the goods and services industry in Brazil. The program was announced by Ministry of Mines and Energy during an event held in Vitória, State of Espírito Santo, and is coordinated by the Oil and Gas Secretary, Mr. Márcio Félix. The proposal is to guarantee that research centers and suppliers receive more than the 1% established in the agreement by the R&D section, which sets forth mandatory inputs from the production’s profit in certain oil fields. (12/20/2016)
On December 27th, QGEP announced that executed an agreement to assume Premier Oil’s 35% participation interest in the exploratory block FZA-M-90. As a result, the Brazilian oil company will hold 100% of the block’s participation interest. A part of the agreement is that QGEP will receive US$ 9.2 million, that was estimated in accordance with the value of Premier’s participation in the minimum exploratory program’s guarantee, as determined by the ANP in the license. The block is located in the Foz do Amazonas basin and cover a 768.5 km² area. Due to the sale of its part in the FZA-M-90, Premier leaves the basin, keeping the operation of two blocks (CE-M-665 and CE-M-717) and participation in the CE-M-661, in the Ceará Basin. (12/27/2016)
The ANP finalized 41 local content audits in 2016 and applied fines in 10 cases, mainly related to the investments made in blocks awarded in the ANP’s 7th Concession Bid Round. Compared to 2015, the number of audits that resulted in fine due to non-compliance of the agreements considerably decreased. From the 41 audits held in 2016, only 4 of them involved offshore blocks: PAMA-M-135 and BM-S-9, both of them operated by Petrobras; CAL-M-374, from Eni; and ES-M-665, from Repsol Sinopec. On the Petrobras’ agreements, the levels of local content offered were achieved; on the others, fines were applicable to Eni and Repsol Sinopec. (29/12/2016)
None of the oil companies declared the commerciality of offshore fields in 2016. The index is the lowest since 2011. In the beginning of 2016, the country had four offshore PADs ongoing and expected to end in 2016, but most of them had their deadline postponed to the next decade. Therefore, 2016 ended with only two new onshore fields. In January, Parnaíba Gás Natural declared the commerciality of Gavião Preto, in the block PN-T-67, in the Parnaíba Basin. Then, in May, Petrobras declared the commerciality of Guriatã, in the REC-T-80, in the Recôncavo Basin. Since then, no new field was declared as commercial in Brazil, in accordance with the most recent data provided by the ANP. (12/30/2016)
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 (firstname.lastname@example.org), 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.