the role of anp in promoting the technological development ... · promoting the technological...

The role of ANP in

promoting the technological

development of the Brazilian oil, gas and

biofuel industry

NATIONAL AGENCY for OIL, NATURAL GAS and BIOFUELS

Luciana Tavares S. Almeida

Specialist in RegulationApril, 2007

Rio de Janeiro

Law 9.478

Art. 8º - The purpose of ANP is to promote regulatory measures, contracting and monitoring economic activities inherent to the oil, gas and biofuels industries, being responsible for: (Wording of Law no. 11.097, 2005)

X - Fostering the research and development of new technologies for exploration, production, transport, refining and processing;

LAW ATTRIBUTION

R&D fostered by ANP

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The Concessionaire must pay for Government Participation, in addition to taxes and

financial compensations provided by Brazilian legislation.

Government Participation

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Concession Contracts for Exploration and Production of Oil and Gas (since 1998)

i) Signature Bonus;

ii) Royalties;

iii) Special Participation;

iv) Payment for Occupation or Retention of a given Area.

Special Participation

Companies that produce oil from fields which

have HIGH RENTABILITY OR OUTPUT have to

pay special participation

The Special Participation will be calculated quarterly

and will be levied on Net Production Revenue for

each individual field.

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24.1 - In case a field has to pay Special

Participation (SP) on any given trimester of the

year, the concessionaire will be required to

undertake commitments to research and

development (R&D) in the amount of 1% (one

percent) of the gross revenue from such field.

Investments in Research, Development and Innovation

Clause of R&D Investments

The invested values CAN BE deduced from the

calculation of the Special Participation (SP)

Administrative Rule ANP nº 10/1999

Administrative Rule ANP nº 58/2001

Investment Incentive

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ACCOMPLISHMENT OF THE EXPENDITURES

Collaboration with universities and/or

national R&D institutions accreditated at ANP

Up to 50%Company’s own R&D

facilities within Brazil and others organizations

Minimum of 50%

R&D investments

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R&D investments made in excess of the minimum in any year may be credited against

obligations in later years.

ANP RESOLUTION nº 34/05

Technical regulation nº 6/2005

The accreditation of R&D institutions at ANP

ANP RESOLUTION nº 33/05

Technical regulation nº 5/2005

Technical guidance on how to accomplish the required research and development investments and how to elaborate the expenditures report.

Resolutions and Regulations

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THOSE RESOLUTIONS HAVE COME INTO EFFECT IN 2005

Technological Department - CTC

CTCCT Petro

PRH R&D investments

Accreditation

Scholarships National R&D institutions

Pre -authorization

Controlling

CT Petro is a national program of science and technology for the oil sector

Objectives To stimulate

1. The innovation in the productive process;

2. The formation and qualification of human resources;

3. The development of technological projects.

CT Petro

CT Petro

When this number exceeds 5%, 25% of the exceeding part will be directed to CT Petro

Companies Universities

Product quality

Production

Productivity

Costs

Prices

The CT Petro Resources come from the Royalties

In Brazil, royalties range from 5% to 10% of gross production

CT Petro - Resources

Values transferred to CT Petro (€ million)

0

50

100

150

200

250

300

350

400

1997 1999 2001 2003 2005 2007

Year

€ M

illio

n2006

€ 344,2 millions

2007 – 79,7 ( Jan-Mar)

CTCCT petro

PRH R&D investments

Accreditation

Scholarships National R&D institutions

Pre -authorization

Controlling

Technological Department - CTC

To generate knowledge: create new technologies in

products and processes;

To create centers of excellence for the technological

development of the oil, gas and biofuel sector;

To promote technological development of the national

industry – supply chain;

To contribute to the formation of highly qualified

professionals.

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THE GOALS

Technological Projects and/or Programs

Basic and applied research;

Experimental development (including prototype

and pilot unit);

Suppliers Qualification - (including manufacture

pilot - project of industrial development).

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Requirements for the Expenditures

1% (one percent) of the gross revenues from fields that pay Special Participation (SP)

1998 – 2004 - € 436 millions

2005 – € 185 millions

2006 – € 224 millions

2007 – € 240 millions (estimated)

Investment obligations

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Pre-authorization

Investment Processes

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Technological services, projects and/or programs

of basic and applied research and/or experimental

development;

Construction and installation of prototypes and

pilot units.

No Pre-Authorization required –general rule

Accreditated National R&D Institutions

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Technological management of programs/projects;

Programs of human resources formation;

Laboratorial infrastructure;

Basic industrial technology;

Energy (biofuels).

Pre-Authorization

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Accreditated National R&D Institutions

PNQP– Human resources qualification

• Authorized investment: € 57 millions

222 authorized projects

• Investment: € 178 millions

• Laboratorial infrastructure (211 projects)

74,9%

Authorized Projects

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100

0,7

23,8

0,8

8,9

24,7

28,4

12,7

%

1,21Others

42,529Centers

Authorized

22,522Exploration

178222Total

1,13Management/Innovation

16,049Gas/Energy

44,062Supply

50,756Production

Cost(€ Million)

NºAreas

Projects / Area

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AGÊNCIA NACIONAL DO PETRÓLEO, GÁS NATURAL E BIOCOMBUSTÍVEIS

Av. Rio Branco, 65 – 13º andar – Centro

20090-040 – Rio de Janeiro – RJ – Brasil

Tel.: 2112-8383

e-mail: cst@anp.gov.brhttp://www.anp.gov.br

ltsantos@anp.gov.br

OBRIGADA!

Special participation is calculated on the basis of:

1. amounts produced

2. extraction location

3. number of years of production

i. Signature Bonus The bonuses were defined according to methodology defined within ANP jurisdiction.

ii. Royalties are 10% (ten percent) of gross production, which can be reduced by the ANP, down to 5% (five percent), taking into consideration the geological risks present, the production forecast and other relevant factors (such as production in remote areas, non-associated gas and heavy oil).

iii. The Special Participation

iv. Payments for occupation or retention of areas - depends on the sector, the exploratory phase and the exploratory period.

Government Participation

PROMINP

Is a program to maximize the participation of the Brazilian industry in a competitive and sustainable base in oil and gas projects in

Brazil and abroad.

PNQP is program of human resources qualification that is part of PROMINP.