Energy & Natural Resources, Brazil updates

15th bid round boosts investments, while ANP softens local content rules
Kincaid | Mendes Vianna Advogados
  • Brazil
  • May 14 2018

The National Petroleum Agency recently led the 15th bidding round in Rio de Janeiro, which reinforced international oil companies' (IOCs') interest in investing in Brazil. Eleven foreign and two national oil companies committed to paying approximately R8 billion in signature bonuses. The highest commitment was presented by the consortium between ExxonMobil, Petrobras and QPI. The IOCs have demonstrated their belief that the geological reserves in the Campos Basin are some of the most prolific on the planet.

ANP submits new rule for authorising performance of biofuel production
Kincaid | Mendes Vianna Advogados
  • Brazil
  • April 16 2018

The Brazilian National Agency of Petroleum, Natural Gas and Biofuels recently published Public Consultation and Public Hearing Notice 4/2018, which establishes the requirements necessary to undertake the production of biofuel activity and the operation of producing facilities. The proposal unifies the biofuels regulatory framework (biodiesel, biomethane and ethanol) in order to simplify administrative procedures, foster investments in the sector and reduce costs resulting from the regulation.

IBAMA: new requirements for disposal of fluids, gravel and cement paste
Kincaid | Mendes Vianna Advogados
  • Brazil
  • February 12 2018

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.

ANP proposes flexibility for local content rules in contracts signed after 2005
Kincaid | Mendes Vianna Advogados
  • Brazil
  • October 23 2017

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.

Improved regulatory and import rules attract new oil and gas investors
Kincaid | Mendes Vianna Advogados
  • Brazil
  • October 16 2017

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.

Federal court suspends FPSO international tender launched by Petrobras
Kincaid | Mendes Vianna Advogados
  • Brazil
  • February 20 2017

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.

New law enacted for alterations to pre-salt rules
Kincaid | Mendes Vianna Advogados
  • Brazil
  • December 12 2016

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.

Rio de Janeiro begins levying tax on production of oil and gas
Kincaid | Mendes Vianna Advogados
  • Brazil
  • July 04 2016

As of May 2016 Rio de Janeiro has begun to levy a new state environmental control and inspection tax on the control, monitoring and supervision of research, mining, exploration and production of oil and gas. All legal entities authorised to conduct such activities are subject to the tax.

Change in pre-salt law will attract new investors
Kincaid | Mendes Vianna Advogados
  • Brazil
  • April 25 2016

The end of Petrobras's monopoly in the pre-salt exploration may become a reality in the near future. Bill 4567/2016, which was recently approved by the Senate and remitted to analysis and approval by the Chamber of Deputies, aims to amend Law 12.351/2010, which regulates the exploration and production regime in the pre-salt area. If passed, the bill will help to attract new investors and allow other companies to be in charge of the exploration.

Rio de Janeiro creates tax on production of oil and gas
Kincaid | Mendes Vianna Advogados
  • Brazil
  • March 07 2016

The Rio de Janeiro government recently approved Law 7,182/2015. The law introduces a state environmental control and inspection tax on the control, monitoring and supervision of research, mining, exploration and production of oil and gas. The tax has faced strong criticism from oil companies which emphasises that, in addition to being questionable from a juridical standpoint, it may have a devastating effect on investments in the sector.

New law levies ICMS on oil production
Kincaid | Mendes Vianna Advogados
  • Brazil
  • February 29 2016

The Rio de Janeiro government recently released Law 7,183/2015, which was published on December 30 2015. The law establishes a value added tax system (ICMS) for operations related to the circulation of goods and on the performance of services for interstate and intercity transport and communication. It will be levied on oil transfer operations between oil wells and concessionaires.

ANP launches 13th bidding round for oil and natural gas blocks
Kincaid | Mendes Vianna Advogados
  • Brazil
  • August 03 2015

The Brazilian Agency for Petroleum, Natural Gas and Biofuels has launched a public consultation on drafts of the tender protocol and the concession agreement for the 13th bidding round for oil and natural gas blocks. The launch of the 13th bidding round is a milestone, as a successful round will demonstrate that the sector is focusing on the long term, despite the pessimism surrounding Brazil and the difficulties affecting the oil industry worldwide.

Potential changes to oil and gas legal framework on the horizon
Kincaid | Mendes Vianna Advogados
  • Brazil
  • April 27 2015

The recent worldwide drop in oil prices and the significant increase in the global supply of oil have created concerns for international oil companies such as Petrobras regarding the feasibility of their exploration and production projects. As such, amendments to the legal framework are being considered, including the introduction of more oil companies in the pre-salt area and changes to Petrobras's obligations.

First bid for gas pipelines under new concession regime
Kincaid | Mendes Vianna Advogados
  • Brazil
  • February 09 2015

As demand for natural gas increases, Brazil will likely find itself short of gas pipelines. As such, the Gas Law was enacted to establish contractual arrangements for the construction and operation of gas pipelines, which will largely be granted via concession agreements. This regime is now being tested with the Petroleum, Natural Gas and Biofuels Agency's launch of the first pipeline bidding round.

Royalties due for oil and natural gas produced during formation tests
Kincaid | Mendes Vianna Advogados
  • Brazil
  • November 10 2014

The Brazilian Agency for Oil, Natural Gas and Biofuels has ruled that royalties will be due for oil and natural gas produced during well formation tests – a phase that was previously royalty free. While the rule discourages companies from extending well formation tests unreasonably to avoid royalties, it might make well formation tests too burdensome and oil companies might choose to invest their money elsewhere.

CNPE ruling brings uncertainty to the exploration and production market
Kincaid | Mendes Vianna Advogados
  • Brazil
  • August 26 2014

A recent decision of the Brazilian National Council for Energy Policy (CNPE) has brought uncertainty to the Brazilian market. The CNPE – which is responsible for establishing national energy policy – has decided to increase the amount of oil that Petrobras, a state-controlled company, is entitled to produce without competition in the pre-salt area by means of a mixed oil and gas regime.

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