Event discussed successful regulatory models in the oil and gas industry
The Brazilian Petroleum, Gas and Biofuels Institute (IBP, in Portuguese) and OGE Oil . Gas . Energy promoted the first edition of the Oil & Gas Regulation International Benchmark Forum, aiming to debate the different regulatory models in the United States, the United Kingdom, and Norway.
The focus was to outline a landscape of the rules for exploration and production (E&P) of oil and gas, especially in a moment when Brazil has retaken bidding rounds, whose calendar was released by the National Council for Energy Policy (CNPE, in portuguese) and plan a series of auctions until 2019.
IBP’s president, Jorge Camargo, pointed out the importance of the country to be familiar with successful benchmarks from other countries. “We are going through a very special moment, starting a new cycle to attract more investments. The main goal is to provide the country with more attractiveness towards investments and make Brazil even more competitive in the regulatory scenario”.
Despite recent advancements, Camargo said Brazil still has “a long way to go” in the regulatory field, in order to increase the country’s attractiveness.
OGE Oil . Gas . Energy’s CEO, Claudia Rabello, highlighted the great potential for oil & gas in Brazil and the importance of an attractive regulatory environment for investments in E&P, “only then, we will go back to the virtuous cycle of the O&G industry, which contributes so much to the economic development”.
Claudia celebrated CNPE´s announcement of the bidding rounds calendar. “The E&P auctions are the driving force for industry´s development”.
The event had the participation of Rachel Halpern, from the U.S. Department of Energy (DOE), Gunnar Sjøgren, from the Norway Petroleum directory body (NPD), and Jessica Mackenzie, from the Department of Business, Energy and Industrial Strategy of the United Kingdom (BEIS). Also present for the debates were João Vicente de Carvalho Vieira, from the Ministry of Mines and Energy (MME), José Gutman, Marcelo Castilho and Heloisa Esteves, from the National Agency of Petroleum, Natural Gas and Biofuels (ANP, in Portuguese).
Issues such as local content, R&D, bidding rounds, government taxes, unitization, natural gas monetization, insurance and financial guarantees were discussed. The presentations revolved around how each country addresses these issues.
In the panel on local content, Jessica Mackenzie said the UK does not apply local content policies, because the European Union rules prevent this kind of incentive. “We invest in support for innovation and competitiveness”.
The same applies to the United States, Rachel Halpern said, there are no local content rules. There are mechanisms to encourage the exports of equipment for the oil industry, as well as in other sectors – which promotes the competitiveness of the US industry.
Gunnar Sjøgren said the Norwegian model was based on technological investment and workforce training, with local content in strategic segments.
As for the natural gas infrastructure, these countries have free access to gas pipelines – regulation still under discussion in Brazil. During the forum, João Carvalho, from the Ministry´s office, talked about the Government’s initiatives aiming at Brazil’s competitiveness, including the Gás para Crescer Program (Gas to Grow, in English).
“All these issues need to be faced by Brazil to consolidate the country as a great leadership in the area of oil and gas and make the most of the great geological potential of the country, in particular the pre-salt layer,” said Antonio Guimarães, IBP’s Executive Secretary of Exploration and Production.
The US, the UK, and Norway stand out in the international scenario as developed countries with relevant production of oil and gas, and their regulatory regimes, albeit different from one another, are taken as reference in the market.
Environmental licensing
Environmental licensing was also subject of a panel at the event, and the speed in the process was one of the featured aspects. Claudia Rabello noted that there are blocks from the 2013 bid that are, as of today, unlicensed for E&P activities. “It is a good example of the need to improve the regulatory framework to attract more investments to the country,” she said.
Industry Support
The initiative to benchmark traditional oil and gas producing countries has the support of companies and entities that operate in the O&G segment, in Brazil – JLT, Mattos Filho Advogados, Pinheiro Neto Advogados, Shell, Statoil, Brazil-U.S. Business Council da U.S. Chamber of Commerce, as well as consulates from the invited countries: the US, the UK, and Norway.