The ANP published today (12/3), on its portal, a guide to assist regulated agents in relation to the local content criteria to be adopted in the agreement and in the commitment to individualize production and in the annexation of areas in exploration contracts and production (E&P) of oil and natural gas. The guide also deals with the cases of amendment of current contracts, with a focus on the drafting of clauses of the respective instruments and with the presentation of different possibilities according to the E&P contracts involved.

The material supports the understanding and application of ANP Resolution No. 833/2020, which regulates the theme. The norm has as its central point the use of the criterion of election of local content clause of one of the contracts that govern the areas that are the object of individualization of production or annexation of areas, extending its effects to every stage of production development, starting from declaration of commerciality.

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Read ANP Resolution 833/2020 in its entirety, click here!

The individualization of production is a procedure that aims at dividing the result of production and the rational use of oil and / or natural gas, when a deposit extends beyond the block granted or contracted under the production sharing regime. If all blocks covered by the deposit belong to the same company or consortium, the commitment to individualize production (CIP) is given; and if they are from different companies or one is not hired (belonging to the Union), the production individualization agreement (AIP) occurs.

The annexation of areas, on the other hand, consists of the incorporation of a certain commercial discovery into a producing or potentially producing field, expanding its limits with a view to the joint exploitation of oil resources. In this case, both must also belong to the same company or consortium and be required by the operator. It is a solution for cases of dependent reservoirs that need to be incorporated into others to become commercially viable.

ANP Resolution 833/2020, in force since 12/1/2020, simplifies procedures, reduces regulatory costs for regulated agents and administrative costs for ANP, increases legal certainty and reinforces the attractiveness of E&P contracts in Brazil.