Four Contracts Extended by the ANP

Source: www.gulfoilandgas.com 8/14/2020, Location: South America

The ANP Board approved the extension of four more contracts for mature onshore oil and natural gas production fields: Massape, Cantagalo, Fazenda Azevedo and Fazenda Boa Esperanca. Thus, there are already 34 mature fields with extended contracts (21 offshore and 13 onshore), which will generate more than US $ 28 billion in new investments, according to information provided in the development plans and annual work programs. The Agency also analyzes 44 other orders (three sea and 41 land).

The extension of contracts is important to attract new investors to these fields, especially those included in the Petrobras Divestment Plan. Most of these fields come from Round Zero, held in 1998, and their contracts would end in 2025. In line with the guidelines of CNPE Resolutions No. 02/2016 and 17/2017, the extensions occur within the scope of the review of development plans ( PDs) of the fields, aiming to increase the useful life of the field and the recovery factor.

In addition to having their deadlines extended, the reviews of the four PDs approved today also contemplated the reduction in the royalty rate on incremental production, in accordance with ANP Resolution No. 749/2018. Incremental production is that which exceeds the production curve initially foreseen for the field, being the result of new investments. Therefore, the production already foreseen will continue to apply the royalty rate determined in the contract and the extra production will have a reduced rate. To date, the ANP has granted this benefit to nine fields.

The revisions are part of a set of measures that the ANP has been taking to revitalize mature fields, increasing their useful life and expanding their recovery factor, which generates greater oil and gas production for Brazil, collecting royalties and maintaining jobs and income in different regions of the country.

In addition to CNPE Resolution No. 17/2017, the measures are also in line with the guidelines of the Reate (Program for the Revitalization of the Exploration and Production of Oil and Natural Gas in Terrestrial Areas) of increasing competitiveness, simplifying, reducing bureaucracy and maximizing life and the field recovery factor.


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