Royalties

ANP will consult the company about an agreement on the production of oil and gas by SIX

T&B Petroleum/Press Office ANP
22/10/2021 20:18
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The ANP Board of Directors approved yesterday (10/21) the holding of a public consultation and hearing, to obtain contributions from economic agents and other interested parties on the draft agreement to close the dispute involving the payment of royalties related to the production of oil and gas from at Petrobras' Shale Industrialization Unit (SIX), located in São Mateus do Sul, Paraná.

 

Shale is a sedimentary rock, with organic matter content in the form of kerogen, which only by heating (pyrolysis) can be converted into oil and gas. Petrobras, the only company to use shale for energy purposes in Brazil, concentrates its operations in the deposit located in São Mateus do Sul, processed at SIX, which has been in operation since 1972.

 

This year, after numerous technical discussions with the ANP, Petrobras confirmed its interest in consensually ending the disputes related to the collection of royalties and the regulatory regime related to shale mining activities through the payment in installments of R$ 559 million (to be updated until the signing of the agreement) and the execution of a concession contract, with a royalty rate of 5%.

 

The closure of disputes involving the collection of royalties on the production of oil and gas from shale and the signing of the concession contract will have a great regional socioeconomic impact, both in relation to the distribution of royalty amounts to the beneficiaries, as well as in the continuity of productive activities . The SIX unit is included in the term of commitment entered into by Petrobras with the Administrative Council for Economic Defense (CADE) and is included in the refining asset divestment program. Through public consultation and hearing, with the participation of society, the ANP gives transparency to this important agreement.

 

The amount to be paid corresponds to the following installments: a) royalties at the rate of 10% on production from December 2002 to November 2012; b) royalties at an additional 5% rate on production for the period from December 2012 until the date of signing the agreement and c) legal charges for registration in Active Debt.

 

The public hearing on the agreement will be held in the city of São Mateus do Sul, with the possibility of participating online, and will also be broadcast on the ANP's YouTube channel.

 

The draft of the agreement and other information on the matter will be published at https://www.gov.br/anp/pt-br/assuntos/consultas-e-audiencias-publicas.

 

History of controversy 

Law No. 9,478/1997 (Petroleum Law) does not mention the oil shale mining activity and the production of oil and gas from shale. Thus, there was doubt whether the rules for calculating and paying royalties based on the production of oil and gas provided for in the law would also apply to products from the mining and processing of oil shale. In 2012, after extensive discussion in the public administration, a conclusive understanding was reached that the payment of royalties on the production of oil and gas from shale would also be appropriate. In 2013 and 2014, the ANP charged Petrobras for the payment of royalties, levied on the production of oil and gas from the shale mining since December 2002. For not agreeing with the decision of the ANP, Petrobras filed lawsuits, with the purpose of voiding or reforming these royalty charges. In 2018, the judiciary suspended the legal proceedings, to enable understandings at the administrative level, aiming at the consensual solution of the dispute.

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