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BRAZILIAN MINISTRY OF MINES AND ENERGY (MME) MAKES AVAILABLE IN PUBLIC HEARING PROPOSAL FOR POLICY OF EXPLORATION AND PRODUCTION OF OIL AND NATURAL GAS
30/05/2017

On April 18, 2017, the Ministry of Mines and Energy (MME) published, at the Official Gazette, the Public Consultation no. 30/2017 that will discuss the Resolution Draft proposed by the Brazilian National Council for Energy Policy (CNPE) for the Brazilian Policy of Exploration and Production of Petroleum and Natural Gas (E&P Policy).

The proposal aims at maximizing the recovery of reservoirs resources, the quantification of the domestic petroleum reservoirs and strengthening of the exploratory activities in Brazil, as well as promote the appropriate monetization of existing oil reserves

The main guidelines of the proposed policy are:

a) to guarantee the continuity of the exploratory activities by means of a Multiannual Plan of Grant of Areas;

b) to ensure the domestic supply of oil and natural gas and facilitate the export of surplus volumes;

c) to foster the competitive participation of the domestic production in the total offer of natural gas to the Market, as well as reduce the natural gas flaring in exploration and production activities;

d) to promote the technological development, stimulating the creation the adoption of new technologies of investigation and recovery of oil and natural gas;

e) to adequate the contracting mechanisms for areas that present greater geological, technological, logistic, or economic risk; 

f) to stimulate modernization, removal of red tape, the simplification and the regulatory agility

g) to encourage a broader plurality of industry players.

The MME is incumbent upon proposing the Brazilian National Council for Energy Policy (CNPE) multiannual plans, up to 5 years, for the offer of areas for exploration and production, adjusting them in due course.

The proposal also lays down specific guidelines to be observed by the Brazilian National Agency of Petroleum, Natural Gas, and Biofuels (ANP) and by the Energy Research Company (EPE). 

Among the guidelines, related to bidding processes of exploration and production blocks, it is worth highlighting the following:

a) to establish bidding process and contractual criteria that increase the attractiveness of the blocks, that consider industry scenarios at the time of definition of these criteria;

b) to promote exploration in basins of new borders, frontiers, in order to increase the geological knowledge, and discovery of new producing areas;

c) to encourage the exploration of oil and natural gas in onshore basins;  

d) to stimulate the increase of participation of small and medium size businesses in the activities of exploration and production of oil and natural gas; 

e) to encourage the lengthening of the useful life of fields, simultaneously promoting the culture of preservation of the safety conditions and respect for the environment;

f) to encourage the development of small and medium size oil discoveries;

g) to promote the assignment of contracts, to the detriment of  their return, for holders of rights and obligations that are not putting in place the investments necessary for the optimal utilization of the resources discovered;

h) to encourage the full use of the capacity of the installed infrastructure through the sharing of same.

Should the proposal be approved, it will revoke the CNPE Resolution no. 8 of July 21, 2003.

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