Oil and Gas Newsletter no5

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NEW RESOLUTIONS

Resolution that grants the extension of exploration phase deadlines approved

On June 02, 2022, the Collegiate Board of the National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) approved ANP Resolution No. 878/2022, which grants concessionaires and contractors the right to request an extension of 18 months to the exploration phase of their respective concession and production sharing contracts.

Contractors and concessionaires should request the extension of exploration phase deadlines within a period of up to:

1. 90 days prior to the deadline of the current exploratory period, for active E&P contracts;
2. 90 days prior to the decision point for which extension is sought or deadline of the active discovery assessment plan (DAP) activities, for E&P contracts whose exploration phase has been extended for the assessment of a late discovery; or
3. 60 days after the date of publication of ANP Resolution No. 878/2022, for E&P contracts suspended under Board Resolution No. 637/ 2021, in order to minimize the uncertainties and negative impacts caused by the COVID-19 pandemic in the oil and gas industry.

Click here to read ANP Resolution No. 878/2022 in full.

ANP publishes resolution on local content certification

On June 09, 2022, the ANP published ANP Resolution No. 879/2022, amending ANP Resolution No. 19/2013, which provides for the criteria and for the performance of local content certification activities. The amendments are related to the following certification proceedings: currency conversion; resale transactions of domestic products; services and sets of foreign origin; and certification standards for domestic systems.

To access ANP Resolution No. 879/2022, click here.

Resolutions approved regarding the National Hydrogen Program, parameters for the bidding for the Ametista Block, and incentives for production from fields and marginal accumulations

On June 23, 2022, the National Energy Policy Council (CNPE) approved resolutions concerning (i) the National Hydrogen Program (PNH2) and its governance; (ii) the technical and economic parameters for bidding on the Ametista Block in the ANP’s Permanent Offer system under the production sharing regime; and (iii) measures to stimulate the development and production of fields and oil and natural gas accumulations that present marginal cost-effectiveness.

As to item (iii) above, it is worth clarifying that the new regulation recommends the adoption of measures by the ANP to encourage E&P activities in fields and accumulations with marginal cost-effectiveness, as well as to optimize the regulatory framework to encourage modernization, debureaucratization, simplification and regulatory speed, in order to further increase the attractiveness of investments. Furthermore, it was recommended that the ANP and Brazil’s Energy Research Office (“EPE”) present studies on the environmental compensation of greenhouse gas emissions in oil and natural gas exploration and production activities, which is one of the sector’s demands under the Program for the Revitalization and Production Incentives of Marine Fields (PROMAR).

For more information, click here.[/vc_column_text][vc_empty_space height=”40px”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]UPCOMING PUBLIC CONSULTATIONS AND HEARING

Below is the list of public consultations published by ANP whose contribution periods are still open:

[/vc_column_text][vc_empty_space height=”40px”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]RELEVANT DECISIONS

Carrying out of public consultations and hearings to amend ANP Resolution No. 802/ 2019 approved

On June 30, 2022, the Collegiate Board of the ANP approved the carrying out of a public consultation and hearing with the purpose of addressing the draft that amends ANP Resolution No. 802/2019, which provides for the mechanisms for generating the reserve required for the primary issuance of Decarbonization Credits (CBIO). The mentioned Resolution includes, in its attachment, a table that presents the biofuel commercialization operations eligible to generate reserve for the CBIO issuance.

The purpose of the amendment is to include the commercialization of biodiesel among producers in the list of eligible operations for the generation of CBIO – the reason being that this type of commercialization between producers was not allowed at the time of the publication of ANP Resolution No. 802/2019, a subject amended by ANP Resolution No. 857/2021.

For further information, click here.[/vc_column_text][vc_empty_space height=”40px”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]OPPORTUNITIES

Upstream Opportunities

Petrobras announces the sale of UEG Araucária S.A.

On June 03, 2022, Petrobras released a teaser regarding the sale of its shareholding (18.8%) in UEG Araucária S.A. (UEGA), a company based in the city of Ararucária (PR), close to the Bolivia-Brazil gas pipeline (GASBOL). The company owns as an asset a natural gas power plant (combined cycle, with two gas turbines and 1 steam turbine), which has a total installed capacity of 484MW.

To read this teaser in full, click here.

Petrobras announces injunction that suspends the sale of the Bahia Terra Cluster

On June 10, 2022, Petrobras informed that it had been summoned, on June 9, 2022, by an injunction issued by the Court of Appeals of the State of Rio de Janeiro, determining the suspension of contract negotiations with the consortium constituted by the companies Petrorecôncavo and Eneva.

These negotiations related to the sale process of the onshore production fields based in the Recôncavo and Tucano Basins, in the state of Bahia, jointly referred to as the Bahia Terra Cluster. Petrobras filed an appeal to the preliminary injunction, but its request for suspensive effect was denied by the competent Court.

For further information, click here.

Sale of Golfinho and Camarupim Cluster approved

On June 23, 2022, Petrobras’ Executive Board approved the sale of its entire interest in maritime concessions part of Golfinho Cluster and Camarupim Cluster, in deep waters in the post-salt, located in the Espírito Santo Basin, to BW Energy Maromba do Brasil Ltda. (BWE).

The total value of the sale could reach USD 75 million, including USD 3 million paid on the execution date of the sale and purchase agreements, USD 12 million to be paid on the closing of the transaction, and up to USD 60 million in contingent payments, depending on future Brent crude oil prices and the development of the concessions. Click here to learn more.

Brazilian refinery and logistics assets are up for sale, according to teasers released by Petrobras.

On June 27, 2022, Petrobras informed that it had restarted the sale proceedings of (i) the Presidente Getúlio Vargas Refinery (REPAR), in Paraná; (ii) the Abreu e Lima Refinery (RNEST), in Pernambuco; and (iii) the Alberto Pasqualini Refinery (REFAP), in Rio Grande do Sul, as well as the logistics assets integrated into such refineries.

The sale of these refineries is guided by Decree 9,188/2017 and the Petrobras Divestment Systematics, through independent competitive processes that are currently at different stages. The transactions are in line with Resolution No. 9/2019 of the Brazilian National Council for Energy Policy and are part of the commitment signed by Petrobras with the Administrative Council for Economic Defense (CADE) in June 2019 to open up the refining sector in Brazil.

To access the teasers of these opportunities, click here.

Public bidding opportunities with Petrobras

Below are the main contracting opportunities made available by Petrobras to date, through the Petronect platform (click here to access):

* Dates are expressed here as dd/mm/yyyy

** Please note that the deadlines in the table above are constantly changing, corresponding to deadlines announced at the time of publication of this newsletter.

More info in Portal Petronect[/vc_column_text][vc_empty_space height=”40px”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]OTHER TOPICS

GEOAnp receives pipeline information update

 On June 01, 2022, the ANP published an update to GEOAnp, a georeferenced data map that includes information on pipelines, in order to increase the availability of information to the general public about the activities of the oil, natural gas, and biofuels sector.

To access the platform, click here.

ANP launches dynamic dashboard on facility tankage

 On June 09, 2022, as published on the ANP website, a dynamic dashboard was inaugurated with information about the tanking (storage) capacity of the agents regulated by the ANP. The dashboard does not include product stock information, showing only the capacity of the market agents’ facilities.

To access the panel, click here.

Gasbol’s Public Call No. 03/2021 Judgment result is available

 On June 13, 2022, the result of the Public Call No. 03/2021 of the Bolivia-Brazil Gas Pipeline (Gasbol) was published by Transportadora Brasileira Gasoduto Bolívia Brasil (TBG). To access the publication in the Brazilian Official Gazette, click here. The result of Public Call No. 03/2021 can be found here.

Gaspetro sale approved

On June 22, 2022, Petrobras informed the market that the Administrative Council for Economic Defense (CADE), in a hearing held on the same date, approved by majority vote the disposal operation of 51% of Petrobras Gás S.A. (Gaspetro) to Compass Gás e Energia S.A. (Compass), without restrictions. The transaction is still subject to the other conditions precedent outlined in the share purchase agreement.

ANP seminar releases data on oil and natural gas exploration

On June 22, 2022, the ANP held the 2nd Seminar on Information Disclosure Requirements for Oil and Natural Gas Exploration. Among the information presented in the seminar, the agency released a 38% increase in the number of exploratory wells drilled in 2021. The number of blocks under concession and production sharing agreement was not amended, remaining at 246. In addition, three commerciality declarations were made in 2021, one in the Parnaíba Basin and two in the Recôncavo Basin.

To access the event recording, click here.

ANP receives proposals for Local Content TAC

On June 21, 2022, the ANP published the partial result of the proposals of Conduct Adjustment Agreement (”TAC”) of local content, received by the companies operating E&P areas.

Up to June 15, 2022, 24 proposals have been received, related to 52 E&P contracts and amounting to BRL 1.90 billion in investment commitments in local content made by the companies, within the scope of the documents presented.

For further information, click here.

ANP holds seminar on improving the rules for calculating special participation

A recording of the event “Improving the Regulatory Instruments related to the Calculation Proceedings of the Special Participation” is available on the ANP’s Youtube channel. The purpose of the seminar was to reinforce the advertising of the review process of the regulations concerning the calculation of the Special Participation (SP) (ANP Regulatory Action No. 1.23 of the Regulatory Agenda 2022-2023). To access the ANP’s Youtube channel, click here.

RN’s State Legislature approves law that regulates the exploration of local piped gas services

On June 15, 2022, the State Legislature of Rio Grande do Norte (“RN”) approved a bill that regulates the exploration of piped gas in the state. The Bill aims to regulate such matter, providing for distribution services, commercialization, and the relationship between the various agents that are part of the natural gas market chain. The matter is still pending sanction by the State Government.

Sergipe introduces short-distance natural gas transportation tariff

In order to attract investments in infrastructure and gas flow, the state of Sergipe initiated a debate about new developments in the natural gas market. The proposal is to create a new short distance tariff which is exclusively for the transportation of natural gas injected into the network, so that the gas is transported from a Natural Gas Processing Unit (NGPU) or liquefied natural gas (LNG) terminal located in the state of Sergipe and consumed within the state itself. The measure is aimed at an economic recovery focused on reindustrialization.

For further information, click here.

Public hearing held regarding payment to landowners

On June 29, 2022, the ANP held a hearing on the draft resolution that deals with the review of ANP Decree No. 143/1998, which, in turn, regulates the proceedings related to the calculation and payment to landowners. The proposal is to make the current standard rate, 1 percent on gross production revenue, more flexible, ranging between 0.5 percent and 1 percent. This amendment would have no effect on fields that are currently in production or on current landowners.  To access the recording of Public Hearing No. 10/2022, click here.

Consolidated national data for the regulated sector in 2021 released

 On June 30, 2022, the ANP published data related to the development of the oil, natural gas, and biofuels sector in Brazil for the year 2021.

According to ANP data, national oil production in 2021 reached 2.9 million barrels per day, so that production in the pre-salt represented 74% of national production – an average of 2.1 million barrels per day for the year. As for natural gas, production reached 133.8 million cubic meters per day, with pre-salt gas production accounting for 67.5% of total production.

In terms of oil production, there was a 1.45 percent decrease compared to 2020. Natural gas production, however, showed a 4.70% increase over the previous year.

In the biofuels sector, ethanol and biodiesel production reached 30 billion and 6.5 billion liters, respectively. At the same time, national oil product production reached 2 million barrels per day. The sales of oil products by the distributors registered 122.7 billion liters.

As a result, there was (i) 8.28 percent decrease in ethanol production; (ii) a 4.98 percent increase in biodiesel production; (iii) and a 3.35 percent increase in petroleum product production.

Information on the data can be found in more detail in Statistical Yearbook 2022.

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