Petrobras has reported that the President of Brazil submitted to Congress the new proposed legislation for the oil and gas industry. The proposals are based on studies conducted by the Inter-Ministry Commission that was created to study and propose changes to the oil and gas sector regulatory model.
The proposed legislation includes the introduction of production-sharing contracts for oil and gas exploration and production in pre-salt layers and in potentially strategic areas as defined by the National Energy Policy Council (CNPE). The new production-sharing contracts introduce the concept of "profit oil," representing the production of a certain field, after deduction of costs and expenses related to oil production. Another concept that was introduced is "cost oil," corresponding to costs and investments made by the contracted party for the exploration and production. Under this proposal, the following are highlighted:
There is a specific proposal for the creation of a new state-run company that will represent the interests of the Brazilian government in the production-sharing contracts. The new company will not conduct upstream activities or engage in investments, but it will participate in operational committees, with voting rights and veto powers, that will define consortium activities.
Other legislative proposals include:
According to this proposal, Petrobras and the Brazilian government will sign a contract which will determine these geographical areas, the amount to be paid for the "transfer of rights," the conditions for the reappraisal of the transfer value and the payment conditions for Petrobras, observing the best practices in the industry.
Exploration and production activities in these areas will be regulated and supervised by the National Petroleum Agency (ANP). The ANP will also approve agreements concerning the unitization of production that may be required in this area.
In anticipation of a rapid congressional approval of this proposal,
Petrobras will use the proceeds from this capitalization for the payment for the transfer of said areas and to finance Petrobras' investments under its business plan.
Petrobras reinforces its commitment to sustainable development in Brazil, maintenance of its national oil self-sufficiency and equal treatment of all of its shareholders.
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