February 21, 2020,
The ANP Board approved yesterday (2/20) the first reduction in the royalty rate on the incremental production of a mature field, as provided for in ANP Resolution No. 749/2018. The incentive was granted to Campo de Polvo, in the Campos Basin, operated by the company PetroRio, within the scope of the approval of the revision of the development plan (PD).
The rate will be reduced from 10% to 5% on the incremental production of the field, that is, on the volume of production that exceeds the reference curve due to new investments by the operator. The reference curve is the natural decline curve of the field, in case there were no new investments.
In the case of the Polvo Field, investments made in the well drilling campaign in 2018 resulted in an approximate 30% increase in oil production. In addition, the end of production, which was scheduled for December 2020, has been extended to 2030, resulting in another 10 years of production.
According to ANP calculations, with the extension of the field’s useful life, a total royalty collection of approximately R $ 300 million is estimated by 2030.
The measure aims to encourage investments in mature fields, in line with the guidelines of the Reate (Program for the Revitalization of the Exploration and Production of Oil and Natural Gas in Land Areas) to increase competitiveness, simplify, reduce bureaucracy and maximize the useful life and the field recovery factor.
It is also in line with CNPE Resolution No. 17/2017, which defines as a public policy for the sector the maximization of resources in situ of the reservoirs, the review of development plans and the reduction of the royalty rate on incremental production when the extension of the useful life of the fields and the economic benefit for the Union.