According to the Minister, the review of the surplus auction agreement with Petrobras by the National Energy Policy Council (CNPE) will allow the auctioning of onerous disposal blocks, which have low exploratory risk and “great potential [for oil discovery and production] to attract investments and companies to the country.” The agreement foresees the payment of about US$ 9 billion by the government to Petrobras for the surplus reserves, on a bid scheduled at the end of October.

This effort, said the Minister, belongs to a set of changes in oil and gas sector, with a multiannual bid rounds calendar and adjustments in the legal framework to the opening of the natural gas market. “We are searching for a better process management and the regulatory and legal stability to ensure competitiveness and interest of companies from around the world”, said the Minister of Mines and Energy.

One of the main points, he highlighted, is to work for the approval in Congress, of the “Natural Gas New Market” project, which IBP played an important role in its conception.

The IBP president, José Firmo, said that “the gas is, undoubtedly, the alternative that Brazil has to stand out in the global process of energy transition”, generating investments, jobs, income and allowing “the Brazilian industry revolution” by means of an input at abundant  and competitive cost. The executive mentioned the USA example, where the increased gas supply promoted a “reindustrialization” of the country.

Firmo also highlighted that the Brazilian oil and gas sector will be responsible for 60% of industrial investments between 2017 and 2020 and might generates, alone, about R$ 93 billion of tax collection per year – only with the oil and gas exploration and production segment, without considering the other links in the chain.

PRICE POLICY AND DOWNSTREAM OPENING

Aligned with Minister Bento Albuquerque, the IBP president defended “an open and free price environment” for the proper market functioning, although it emphasizes the complexity of the subject. “We will only find a solution with an opening in refining, which allows free price competition in the domestic market with multiple agents, such as we already achieved in the exploration and production segment.”

Rio de Janeiro, September 26 – Petrobras’ general contract manager Daniel Pedroso said on Wednesday at Rio Oil & Gas that the partnership established 18 years ago for developing the BM-S block -11, in the Santos Basin, where the Lula field is located, was key for the development of what currently represents the largest production in ultra-deep waters in the world.

“We had an area that was considered as high risk, with a doubtful seismic, infeasible cost of development. The three companies met and risk reduction prevailed back then. The partnership has been the focus of the company, which is prioritizing risk reduction”, explained Petrobras’ executive.

The block was sold in ANP’s Round 2, and the winning consortium gathered Petrobras (65%), BG (25%) and Petrogal (10%). Currently, it includes Shell, after the purchase of BG by the Anglo Dutch operator. In all, the Lula field has 133 wells that produce 829 thousand barrels per day.

“This consortium reaches the production level of a country like Colombia, and we have not yet finished development. We have already reached 1 billion barrels. We expect to reach 1 million barrels per day. We have at least two more decades of a successful story to tell”, said Pedroso.

The Lula field also has part of the ​​Iara area, where the well was drilled with a world record water depth, 580 meters, in consortium with France’s Total. During a speech at Rio Oil & Gas, Arnaud Breuillac, president of E&P at Total, spoke about the relevance of the Brazilian subsalt to the company’s portfolio. Total became the first operator in the region this year upon the acquisition of the Lapa field.

“We expect to significantly increase the daily production of oil equivalent in Total’s assets in the Brazilian subsalt by 2022. We believe that ultra-deep exploration, whether in Brazil or other locations around the world, is extremely competitive”, said Breuillac.

Onshore Development

Besides the subsalt, Rio Oil & Gas has opened room for discussions on the development of onshore basins. In a discussion at the Onshore Forum, the oil & gas secretary of the Ministry of Mines & Energy, João Vicente, drew attention to the potential and need for the development of mature fields in Brazil.

“The country has a huge potential and cannot fail to develop these assets or at least discuss whether to develop them. A key point for the development of the industry is Petrobras’ divestment program. Another point is the permanent offer, which is a unique opportunity for new players with a risk appetite and who can allocate capital for risky opportunities”, he said.

ANP’s director Dirceu Amorelli pointed out that ANP’s actions are focused on adjusting the regulation of each environment and on revitalizing the declining activities of the fields.

Refining

In the last couple of years, the Brazilian oil industry has once again drawn attention and attracted investments, which has prompted the need to discuss possibilities to develop the refining area. Besides, this segment has great potential here, as highlighted by Arlindo Moreira Filho, Petrobras’ general manager of restructuring programs for natural gas businesses, during the special session “An assessment of opportunities in Brazil’s refining area”.

“Brazil is the seventh largest consumer of oil derivatives in the world and the growth trend should continue, unlike what happens in mature markets. To attract new investments in this area, however, some efforts are required, such as ensuring regulatory and fiscal stability, combating fraud and aligning the biofuel and fossil fuel chains”, he said.

Regarding the pricing policy of derivatives, Décio Oddone, director general of ANP, was emphatic about the need for greater transparency. “Today, there is no transparency in how prices are calculated. Prices must reflect the international market and operating costs in Brazil in order to attract investment and generate competition”, he explained. “Only an open, dynamic and competitive market with a diversity of players will allow the increase of domestic production and reduce our dependence on imports”, he added.

Attraction and retention of talents

The future of the oil & gas industry, the need for modernity in the Human Resources areas of companies and the reduction of young people’s interest in operating in this industry was also a subject of discussion on Wednesday at Rio Oil & Gas.

Tatiana Mey, a MIT student, presented an international overview of the scenario, and told a little about her experience abroad, making a comparison with Brazil. “Young people in Brazil believe that this is an old-fashioned, outdated industry – they are short-sighted. They really want to create and work in a company that gives leadership opportunities, that truly believes in meritocracy. ”

According to the student, it is possible to observe that American oil & gas companies are changing their way of communicating. Tatiana observed that the Brazilian industry is beginning to modernize and cited the “Beyond the Surface” campaign, signed by the IBP, in addition to the initiative to promote Oil & Gas Techweek.

Rio Oil & Gas’s complete schedule can be accessed through the www.riooilgas.com.br portal or in the App, available for download on Google Play or the App Store.

The Brazilian Petroleum, Gas and Biofuels Institute (IBP), in partnership with OGE – Oil. Gas. Energy. -, headed the second edition of Oil & Gas Regulation International Benchmark Forum. The event gathered agents from traditional oil and gas producing countries – aiming to promote network about governance in the environmental licensing process, low carbon economy trends and regulatory challenges to broaden the natural gas market.

According to Luiz Costamilan, IBP Natural Gas Executive Secretary, Brazil is becoming the offshore worldwide capital and everyone is observing the Brazilian oil and gas sector. Even recent industry changes have created many opportunities, yet some challenges remain.

“Unfortunately the environmental framework challenges are the same from last year, when we discuss the topic at the first edition of the forum; at this second edition we are focusing on the balance between environmental preservation and the oil and gas industry development. Brazil has considerable natural gas volume, considered as a platform in the process of the low carbon economy transition”, explained Claudia Rabello, OGE – Oil. Gas. Energy. – CEO.

The exchange between specialists approached regulatory aspects from each country and its effects on investments security. “Unfortunately, it’s not possible just copy and paste the oil and gas industry best practices, because Brazil has its own peculiarities – as all the countries. We need to embody and “tropicalize” these practices to our reality. This is our homework”, affirmed José Gutman, ANP executive secretary in the Forum opening.

Energy transition

In the first panel, Gunnar SjØgren, Norwegian Petroleum Directorate (NPD) director, reviled actions and investments that Norway is doing to migrate to a low carbon economy. Presently, 99% of all energy generation in the Nordic country comes from hydroelectric power, considered low-cost, clean, flexible and trustworthy.

“Norway is also waging in wind power from the construction of the largest land-based wind power plant of Europe. Our belief is that the six wind farms produce 1.000 GWh by 2020. The foreseen investment on this energy sector is € 1,6 billion “, said Gunnar.

Other important aspect is the type of transport used by Norwegians – 25% of all cars are electric and the percentage has been quickly rising. “On June, we listed that 50% of new cars used on the streets are rechargeable”, added.

In Canada, the federal government defines guidelines that provinces should follow. In 2015, the total of greenhouse gas emissions in the country was 772 megatonnes (Mt) of carbon dioxide equivalent (CO2 eq). The Paris climate agreement commits the country to reducing that total to 517 megatonnes by 2030, as explained Corey Froese, International Center of Regulatory Excellence (ICORE) / Alberta Energy Regulator (AER) director.

“The country is committed with the Pan-Canadian Framework on Clean Growth and Climate Change, which englobes clean technology, innovation, job creation, approach to pricing carbon, and specific mitigation opportunities.

Furthermore, incentives and governmental policies are guiding the energy transition in UK – even the solutions are conducted by the market. According to Peter Cameron, Energy Markets Global Limited director, the UK emissions fell 6% in 2016. That result was achieved after improvements in energy efficiency meant a reduction of 2% in overall energy consumption. Besides that, three big coal plants were shut down in 2016, reducing the proportion in UK from 2,7 billion tons in 2015 to 22.000 tons on the later year.

Environmental framework

On Norway, to operate in the country and participate in bidding rounds, the companies must be qualified as an operator by national authorities, describing its technical capabilities, financial and environmental, as well as offshore exploration and production experiences. Being qualified to operate, the companies don’t need environmental licenses, and are authorized to begin the activities just after sing the concession contract.

“The actual legislation establishes strict requirements related to each company responsibility: risks identification and reduction, and report ability.  The management of major-accident hazards is prerequisite for oil operations in the country”, explained Gunnar.

The environmental rules for each area to be explored are predefined by Norwegian authorities and must be fully accomplished by the companies, there’s no surprise. “There is negotiation only in technical programs. The operators need to notify the government agencies how will reach the established conditions – unlike some countries where the authorities point out what companies should do”, stated.

On Canada, the government also determines only the expected environmental results. The environmental requirements or restrictions are defined based on the nature of the risk.

On the United Kingdom, as the government is in charge of legislation, the environmental requirements are established by industry associations. The operational security system is based on KPIs (Key Performance Indicators).

A governmental agent is in charge of this inspection and has authority to inspect. Because it is a very extensive region, the number of required licenses to operate depends on each location. While England and Wales demand only one, issued by the environmental agency or equivalent local authority, Scotland requires two licenses and Northern Ireland, three.

Natural gas Market

This panel debated topics as regulation of third-party access to transport facilities, market diversity need, market price mechanisms and transport infrastructure.

Thus, gas regulatory reform, on hold at Congress, is essential. The General Coordinator for Processing, Infrastructure and Logistics for the Ministry of Mines and Energy, Aldo Barroso, expects that the gas bill replacement should be approved by August.

The 2nd Oil & Gas Regulation International Benchmark Forum was sponsored by Petrobras, Shell, Mattos Filho, and Faveret Lampert, supported by the Chamber of Commerce Brazil-Canada (CCBC), Consulate General of Norway, Consulate General of Canada, British Consulate General and Brasil Energia magazine.

The increasing migratory flow of professionals and people was the main topic discussed during the release of the Guide to Good Practices of the New Migration Law that happened on June 28, at the IBP headquarters. In partnership with EMDOC, the Brazilian UN Global Compact Network and the Brazil-Germany Chamber of Commerce, the event gathered government agents and oil and gas sector representatives s, as well IBP associated members and institutional partners guests, to discuss opportunities in the new Brazilian Migration Law and the corporate risks.

According to Pedro Alem, IBP Industry Policy Executive Manager, the guide’s release “it’s a first reference for everyone to promptly and effectively adequate to the new rules”. In a context of concepts and principle changing, the new Brazilian Migration Law presents a balanced perspective on the role of all those involved, highlighting technical assistance, technological and scientific activities, recognized as beneficial to society.

In this collaborated scenario between government and private institutions to elaborate the migration law, the company’s active participation is important and, conforming to João Marques, President of EMDOC, “the private institutions need to cooperate and deliver business proposals, inspiring clients to bring their causes aiming innovate even more the migration law”.

The mobility process, the challenges and opportunities delivered by, as well in a social and economic view, indicates the meaning of the dialogue between government, society and private sector to find valuation mechanisms that allows companies hire even refugees, with adequate compliance and regulations process, minimalizing risks of penalties and possible damages to the company’s image.

The release comes to supplement actions already practiced by the Global Compact Network with the Guide to Good Practices in Anti-corruption Compliance in the International Labor Market, released last year.

The event had the presence of Pedro Alem, IBP Industry Policy Executive Manager; João Marques, President of EMDOC; Paulo Sergio Almeida, officer for the Means of Life Unity – UN High Commissariat for Refugees (ACNUR Brasil); Carlo Pereira, Brazilian Global Compact Network (UN) Executive Secretary, Daniel Catelan, BHGE Employment Tax Lead North and Latin America; Ivon Jorge da Silva, Ministry of Justice coordinator for Refugee Issues of the Refugee Nacional Committee – General Coordination;  Paulo Gustavo Iansen Sant’Ana, Head of the Immigration Division of the Ministry of State and Foreign Affairs; Luiz Alberto Matos dos Santos, Coordinator of Support to the National Immigration Council of the Ministry of Labor and Employment.