Brazil’s National Agency of Petroleum Publishes Resolutions Maintaining Measures Related to COVID-19

On December 21, 2020, the National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) published (i) Resolution No. 835/2020, which extends the effective term of certain ANP resolutions with measures related to the public health emergency situation caused by COVID-19 (“Resolution No. 835”), and (ii) Resolution No. 836/2020, which defines the procedures to be followed by entities regulated by the ANP that perform oil and natural gas exploration and production activities, also in consideration of the COVID-19 situation (“Resolution No. 836”).

Resolution No. 835

 The ANP published in 2020 certain resolutions with measures and procedures to address the effects of the COVID-19 pandemic in relation to the Brazilian petroleum industry.  In view of their upcoming expiration, Resolution No. 835 extends the effectiveness of three resolutions, as detailed below:

• ANP Resolution No. 812/2020: Establishes the procedures to be adopted by entities regulated by the ANP that are involved in the national fuel supply sector. The expiration date of this resolution was extended from December 31, 2020, to  December 31, 2021. For additional information on this resolution, please refer to our previous Legal Update.
• ANP Resolution No. 822/2020: Provides for public hearings by means of video conferences. The expiration date of this resolution was extended from December 31, 2020, to  December 31, 2021.
• ANP Resolution No. 816/2020: Establishes the procedures to be adopted by entities regulated by the ANP involved in the exploration and production of oil and natural gas. The expiration date of this resolution was extended from December 31, 2020, to  March 31, 2021. For additional information on this resolution, please refer to our previous Legal Update.

Resolution No. 836

Resolution No. 836 establishes the deadlines and procedures to be followed by entities regulated by ANP involved in oil and natural gas exploration and production activities after the expiration of ANP Resolution No. 816/2020. In this sense, Resolution No. 836 becomes effective only on April 1, 2021.

According to ANP, Resolution No. 836 contemplates and re-organizes several mechanisms already provided under ANP Resolution No. 816/2020. For this purpose, Resolution No. 836 includes specific guidelines on (i) submission of documents, (ii) communication with ANP, and (iii) the deadline for submission of documents.

Submission of documents

Resolution No. 836 gives preference to the submission of documents and the presentation of petitions before the ANP through the Electronic Information System (“SEI/ANP”). This provision was already contemplated under ANP Resolution No. 816/2020, as amended by ANP Resolution No. 820/2020.

For purposes of ANP’s prior analysis, Resolution No. 836 allows the submission through digital means of documents that,  due to their nature, require a hardcopy to be valid or to guarantee the rights of their beneficiaries. In such cases, ANP’s final acceptance is subject to the submission of the hardcopy.

The documents required in hardcopy and exceptionally submitted through SEI during the effectiveness of Resolution No. 836 must be filed before ANP within 30 days counted from the expiration of Resolution No. 836. This mechanism will only apply to financial guarantees of minimum exploratory programs, if the contractual deadlines are met.

Resolution No. 836 establishes that documents exceptionally submitted through SEI, which require hardcopy as well as the signature of a public servant, shall be deemed signed or approved by ANP by means of a notice electronically signed by the competent individual. Such documents shall enter into force and become effective on the date the notice is signed.

Within 60 days after the expiration of Resolution No. 836, ANP shall coordinate, when applicable, the signature of the hardcopies and return them to the respective parties.

Resolution No. 836 also provides that ANP shall deem as an original document a document produced electronically and submitted and signed through SEI/ANP or signed using another type of electronic signature accepted by law, guaranteeing the origin of the document and its signatory.

Documents produced electronically and signed using the ICP-Brasil key system must be submitted by means of an institutional e-mail for the analysis of the signature, as well as filed through SEI to be included in the proceeding.

 Communication.

Resolution No. 836 provides that operators of oil and natural gas exploration and production contracts must report to the ANP:

• The suspected and confirmed COVID-19 cases, per exploration and production facility;
• The deaths due to COVID-19 of the workers at the exploration and production facilities;
• The impact on drilling and production activities;
• The impact on the safety of operations and the measures applied to contain the spread of COVID-19, which must be reported with the respective action plans to continue the performance of services;
• Any changes in the operational routines that may totally or partially compromise the national supply of oil and natural gas;
• The normal and reduced number of personnel on board (POB), when there is a change in the headcount to the minimum number of personnel necessary for safe operation; and
• The normal and reduced number of emergency response team members (EOR), when there is a change in  the headcount to the minimum number of personnel necessary for safe operation.

The information listed above must be submitted in accordance with the form available in the ANP’s website.

Deadlines.

Resolution 836 sets forth the following deadlines for the submission of the following documents:

• 60 days for the submission of local content reports with a submission date between March 1, 2020, and December 31, 2020;
• 60 days for the submission of quarterly expense reports with assessment period of expenses incurred from the first quarter of 2020 until December 31, 2020;
• 60 days for the submission of update of approved Operational Safety Document (DSO), which was adjusted during the effectiveness of ANP Resolution No. 816/2020 but was not submitted to the ANP due to the waiver provided under such resolution; and
• 60 days for the submission of quarterly certification reports submitted from local content certifiers to the ANP, with assessment period from the first quarter of 2020 through December 31, 2020.
• 120 days for the submission of all data related to the Notificação de Conjuntos Solidários de Barreira – NCSB for wells for the construction and production stages that has not been submitted due to the provisions of ANP Resolution No. 816/2020. The new NCSB data regarding the construction and production stages must be submitted within the deadlines provided under ANP Resolution No. 699/2017.
• 180 days for the submission of all documentation evidencing the remediation of operational non-conformities (pursuant to ANP Resolution No. 37/2015) which has not been submitted due to the provisions of ANP Resolution No. 816/2020. Otherwise, the documentation related to the evidence of remediation must follow the deadlines for submission to the ANP provided under ANP Resolution No. 37/2015.
• The analysis of the composition of the natural gas produced as of February 2021 must be submitted to ANP within the deadline provided under article 6 of ANP Resolution No. 40/2009.

Effectiveness.

Resolution 836 will remain effective until December 31, 2021, and it may be revoked in whole or in part by ANP if the conditions of public health emergency situation of international importance caused by COVID-19 change. In case of revocation, ANP shall grant, when necessary to guarantee legal certainty, a period for the reestablishment of obligations affected.

We will keep you posted on COVID-19 measures related to the Brazilian Petroleum Industry through Energy Forward.