ANP  forecasts R$ 26 billion in investments in the next five years as a result of decommissioning

Apr 27, 2020

ANP published  (April 27), Resolution nº 817/2020 dealing with the decommissioning (deactivation) of oil and natural gas exploration and production facilities, the procedure for returning areas to the ANP (with inclusion in the Permanent Offer) and the sale and reversal of assets. This is a milestone for the industry, as the modernization and simplification of procedures will provide opportunities for new business and more investments in the country.

With regard to decommissioning alone, the forecast is that the new standard will result in at least R$ 26 billion in investments in the next five years. The funds will be invested in contracting services for clearing and abandoning wells, removing equipment and recovering areas, among others.

The resolution may be applied to installations with decommissioning scheduled for the coming years and which, eventually, need to be deactivated early this year, due to the reduction in production due to the worldwide coronavirus pandemic.

Transition of operators

The resolution further defined that the ANP may place in the Permanent Offering the onshore fields in process of return that have approved decommissioning plans, up to 24 months before the date scheduled for the end of production, so that there is a transition of operators without production interruption.

This simplification of rules for transferring fields from one company to another will allow the extension of the useful life of the fields and the expansion of its recovery factor (percentage of the volume of oil and gas from a deposit that is effectively extracted), generating jobs, income and greater collection of taxes and government participation, such as royalties.

Predictability

Another innovation of the resolution is the early submission of documents and the publishing of decommissioning programs, giving greater predictability and enabling the market to plan the offer of associated services (for example, local shipyards to perform the dismantling of units), which will promote the opening new business markets.

Standardization of procedures

The resolution is the result of a joint effort between the ANP, Ibama and the Brazilian Navy, which unified their procedures – instead of delivering different documents to each agency, companies will now deliver a single Facilities Decommissioning Plan (PDI) . The single PDI will provide greater legal certainty, speed up the process, and include environmental aspects on a case-by-case basis.

Administrative simplification

The procedures were also unified within the ANP itself, bringing together in a single resolution the rules that were divided into three (ANP Resolutions nº 27/2006, 28/2006 and 25/2014).

Decommissioning activities for installations must be carried out in compliance with all relevant regulations. The new resolution stipulates a social responsibility and sustainability management system that adheres to the 17 United Nations Sustainable Development Goals.

The resolution went through a public consultation and hearing, during which about 370 contributions were received.

See the full resolution in the DOU: http://www.in.gov.br/web/dou/-/resolucao-n-817-de-24-de-abril-de-2020-254001378

Source: Editorial Office / ANP Agency

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