1. General Structure of Petroleum Ownership and Regulation
1.1 System of Petroleum Ownership
The Brazilian Constitution of 1988 provides that the Federal Government has ownership over the petroleum and mineral resources located in the subsoil, in the continental shelf and in the exclusive economic zone (ZEE) [Arts. 20 and 176]. Also, pursuant to the Brazilian Constitution, oil and natural gas exploration and production activities, refining, the importation and exportation of by-products, maritime transportation of crude oil or by-products and pipeline transportation of petroleum and natural gas are activities under the monopoly of the Federal Government [Art. 177].
However, the Federal Government can contract with stateowned or private entities to conduct the petroleum activities referred to above, subject to certain conditions set forth in the applicable laws.
The economic reforms in the early 1990s brought about an exception to the Federal Government monopoly over petroleum activities. After several years of monopoly over petroleum activities (exclusive to Petróleo
Thus, aiming to provide legal mechanisms to attract both domestic and international private capital to
In this context, Law No. 9,478/97 (the Petroleum Law) was enacted and, among other provisions, implemented the concession regime for the award of E&P rights by the Federal Government in
In addition, in the face of massive investments that
1.2 Regulatory Bodies
Petroleum activities are regulated by the following main governmental bodies:
- the
Ministry of Mines and Energy - Ministério de Minas e Energia; - the
National Council of Energy Policy - Conselho Nacional de Política Energética; and - the
National Agency of Petroleum , Natural Gas and Biofuels - Agęncia Nacional do Petróleo, Gás Natural e Biocombustíveis.
The MME promotes and supervises the implementation of public policies in the following sectors:
- geology, mineral and energy resources;
- hydraulic energy;
- mining and metallurgy; and
- oil, fuel and electricity, including nuclear energy.
The CNPE is a consulting body and assists the President of
The attributions of the CNPE have been amplified under recent regulations. One of the main changes in this regard was brought by the Pre-Salt Law, which provides that the CNPE is entitled to define the blocks to be offered in bid rounds for the exploration and production of oil and natural gas.
The ANP was created by the Petroleum Law and has the authority to regulate, intervene and oversee petroleum activities, including the creation of infra-legal rules (eg, the ANP resolutions), the institution of administrative proceedings and the application of the relevant penalties, the issuance of authorisations to companies that carry out the relevant regulated activities, and the promotion and disclosure of geological and geophysical studies related to petroleum activities, including official statistics on the national reservoirs and production.
The ANP is also authorised to promote and organise bid rounds for the award of E&P rights, and to execute concession contracts on behalf of the Federal Government. It must be pointed out that the attribution to execute production sharing contracts was granted to the MME, as a representative of the Federal Government, in accordance with the Pre-Salt Law. The ANP executes the sharing contracts as the regulatory body responsible for supervising petroleum activities.
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