Décio Oddone is Director General of the National Petroleum, Natural Gas and Biofuels Agency. Mr. Oddone has over three decades of experience in the sector having previously held roles at Petrobras (CEO of Petrobras Bolivia; CEO of the South Cone), Braskem (Vice-President) and Prumo (Head of Oil & Gas Projects).
Leaders League. What are your main objectives as Director General of the National Agency of Petroleum, Gas and Biofuels (ANP)?
Décio Oddone. One of my main objectives is improving ANP’s regulatory framework by making it increasingly modern, agile and efficient which would allow for more open, diversified and competitive markets. Additional objectives include simplifying norms, attracting greater levels of investment and promoting dialogue between civil society and the various sectors which the agency regulates.
What were the most important regulatory developments to occur in the Brazilian oil and gas sector in 2018?
Permanent offer rules began in 2018 which consists of the continuous offering of fields and blocks already relinquished or in the process of being returned to ANP. The permanent offer of assets should significantly contribute to the revitalization of terrestrial activity and to the development of small and medium sector-related companies.
Institutional transparency has increased through the disclosure of fuel price composition and the implementation of the ‘Infopreço’ system, through which resellers may disclose real-time market prices at petrol stations.
Notably, the waiver exempting companies from minimum local content regulations and the possibility of signing contracts with new local content rules were also regulated this year. Finally, ANP is teaming up with the Administrative Council for Economic Defense (CADE) to study economic measures which could improve fuel market policies.
What were the main trends in Brazil’s oil and gas market in 2018?
Transformations which began in 2017 are being strengthened to create a more open and competitive market. The auctions calendar, which aims to provide greater predictability to the assets on offer is being fulfilled and has shown positive results. For example, the 15th Bidding Rounds, held on March 29th, raised over R$8 billion in signing bonuses, a record amount for a single round in the concession regime.
We recently published the edict and contract models for the 5th Production Sharing Bidding Rounds, which will be held on September 28th and has areas such as Saturn, Titan, Pau Brasil and Sudoeste de Tartaruga Verde on offer, all located in the Santos and Campos basins.
Production in the Brazilian pre-salt layer has consistently increased and already accounts for over 50% of Brazil’s oil and gas output. This region currently has one of the greatest reserve potentials on the planet.
How has ANP sought to stimulate the development of the Brazilian O&G market?
Major regulatory improvements have been implemented such as the creation of an auctions calendar, permanent offer rules, the minimum content waiver as well as other investment-friendly measures which have stimulated the sector’s recovery. We are now designing incentives to increase the recovery rate of mature fields.
The Bidding Rounds calendar has notably contributed to sector recovery and attracted major investments to Brazil. Auctions are planned until 2021: the 6th Round of Production Sharing, containing fields within the Pre-Salt Polygon, and the 16th, 17th and 18th Rounds of block auctions, under the concession regime.
What are ANP’s expectations for 2019?
Based on recent auctions, the bidding rounds scheduled until 2021 and new permanent offer rules, the number of hired fields in Brazil as well as the country’s oil and gas reserves should significantly increase. In terms of development and production, we estimate an investment potential of R$845 billion from 2017 to 2027 when existing contracts are added to those which will be signed until 2019.