In order to improve the definition of and conditions for the use and disposal of fluids, gravel and cement paste resulting from drilling and production activity in Brazil, the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA) recently published Normative Instruction 01/2018. In doing so, the IBAMA established new definitions and specific criteria that must be followed, subject to the penalties provided in the law.
The Brazilian National Agency of Petroleum, Natural Gas and Biofuels recently published Notice of Public Consultation and Public Hearing 20 in order to collect input regarding the new rule which will increase the flexibility of the local content rules provided for in concession contracts entered into between the seventh and 13th bidding round for onerous assignment, as well as the first production sharing bidding round of the exploration of oil and natural gas blocks.
The initial expectation from some market analysts with respect to the outcome of Brazil's 14th bidding round was conservative, with Brazil's political turmoil and the downturn in the oil and gas sector clearly inciting this uncertainty. However, it seems that the government's initiative to extend the special customs regime for the import of rigs, vessels and equipment until 2040, as well as its adjustment of the rules in relation to local content requirements, ensured the round's success.
A recent decision rendered by the Brasilia Federal Court of Appeals suspended one of the most anticipated Petrobras international tenders for the charter and operation of a floating production, storage and offloading unit in the Libra field, the largest oil field in the pre-salt region. The suspension will remain in effect until the Brazilian National Agency of Petroleum, Natural Gas and Biofuels rules on Petrobras's local content waiver request.
President Michel Temer recently enacted Law 13.365/2016. The law makes the participation of Petrobras as the exclusive pre-salt operator optional, while setting out Petrobras's pre-emptive right. With the enactment of the new law, the Brazilian government is preparing to conduct the second production sharing round, which will offer four pre-salt areas, in the second half of 2017.