Brazil relaxes oil and E&P rules to help crisis-hit operators

Brazil’s oil and gas regulator ANP authorized operators to postpone activities that were due to be finished this year amid the coronavirus pandemic and low oil prices.   

The watchdog relaxed exploration and production rules, extending deadlines for companies to present development plans, annual work programs, and monthly production data. It also allowed firms operating fields with low output to flare an extraordinary volume of 100,000m3/d of natural gas. According to ANP data, 24 blocks in Brazil were due to see their first exploration phase completed this year.

Operational routines such as the collection of oil and gas samples and inspections of measurement instruments were suspended. The regulator had already issued a plan to help Brazilian operators adopt infection-prevention plans and emergency procedures on platforms to avoid the spread of coronavirus among workers.    

Although some oil firms such as Petrobras and PetroRio have already delayed some exploratory and revitalization activities and reduced production, others continue with their investment plans unchanged. One example is local company Enauta, which released a statement on Wednesday saying that its 2020-21 capex plan of US$196mn will continue, including the drilling of an offshore well in the Sergipe-Alagoas basin by next year.   

However, the company is considering different oil price scenarios to define the next steps of its definitive production system in the Atlanta field, in the Santos basin, which is now producing through an anticipated production program.   

“With the combination of sharp declines and high volatility in the Brent price over the first quarter 2020 and the global impact of the COVID-19 pandemic, Enauta has implemented a series of actions to maintain liquidity and reduce costs and expenses,” it said.   

Incentivized retirement program  

Petrobras, meanwhile, launched a new incentivized retirement program as part of its cost reduction efforts. Together with its voluntary severance program, the company estimated savings of 7.6bn reais (US$1.4bn) by 2025, with another 3,800 employees signing up to the schemes.