ANP ESTABLISHES CRITERIA AND PROCEDURES FOR THE PRESENTATION OF FINANCIAL GUARANTEES FOR DECOMMISSIONING

The National Agency of Petroleum, Natural Gas and Biofuels – ANP published today, September 29, 2021, ANP Resolution No. 854, of September 27, 2021, which regulates the procedures for the presentation of financial guarantees and term to ensure the resources for the decommissioning of production facilities in oil and natural gas fields.

The presentation of financial guarantees for the decommissioning of facilities was already provided for in the exploration and production contracts, however, the Resolution provides predictability with regards to the moment of presentation of the financial guarantee and legal certainty regarding the criteria for its acceptance and execution by ANP.

The need for regulation of decommissioning guarantees (or abandonment and deactivation, as it was previously known) gained relevance from Petrobras’ privatization plan and was pointed out by the market to ANP since 2018. Since then, the matter has been debated by the Agency and is a result from a public hearing held in 2020.

Among the modalities of financial guarantees accepted by ANP, according to the new Resolution, there are: (i) letter of credit; (ii) insurance guarantee; (iii) pledge of oil and natural gas; (iv) corporate guarantee; and (v) provisioning fund.

ANP may also admit that the contractor itself ensures the financial resources to comply with the decommissioning obligation, by signing a term with extrajudicial executive title attribute, provided that the criteria established by the Resolution are met.

The Resolution determines that the operator must present a financial guarantee or term that ensures the decommissioning within 180 days from the date of start of field production, which shall be valid throughout the term of the contract, as well as establishes the criteria for its renewal and update of the amount to be guaranteed annually.
 
The requirements for the presentation of a financial guarantee or term by the assignees of the exploration and production contracts are also covered by the new Resolution, as a requirement for the approval of the assignment of the contracts.
 
Particular attention should be given to the annexes to the Resolution, which deals with the Progressive Contribution Model – MAP and provides models to be followed for each modality of financial guarantee.
 
Finally, the Resolution shall be effective on November 1, 2021.

The entire content of the Resolution under analysis can be accessed through the website of the Federal Official Gazette

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