Oil Companies Will Have to Pay Up to 1% to Landowners Where Oil and Natural Gas Exploration Activities Are Conducted

Written by Flavia Marinho

Published on 25/08/2022 at 15:10

Campo terrestre de exploração de petróleo e gás natural – Imagem UOL

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ANP Approves Resolution Determining Payment of Up to 1% to Landowners Where Oil and Natural Gas Exploration Activities Are Carried Out

The ANP Board informed this afternoon (08/25) that it approved the resolution addressing the revision of ANP Ordinance No. 143/1998, which regulates the procedures related to the verification and payment to landowners regarding oil and natural gas exploration and production activities conducted by oil companies.

According to ANP, the payment to landowners is a financial compensation owed by the companies engaged in oil and natural gas exploration and production to the landowners of the areas where these activities are conducted. This payment is made monthly.

The Agency informs that, with the new resolution, the current standard rate of 1% on gross production revenue will be flexible, varying between 0.5% and 1%. This change will only take effect for new bidding processes, not affecting currently producing fields and existing landowners.

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Law No. 9,478/1997 determined that the payment to landowners will occur at a variable percentage between 0.5% and 1% of oil and natural gas production.

Oil Companies Will Have to Pay Between 0.5% and 1% of the Production of Oil and Natural Gas to Landowners

The ANP Ordinance No. 143/1998 regulated the procedures related to the calculation and payment of this participation owed to third parties, and determined, as a general rule, the application of the 1% rate for payment to landowners, allowing as an exception the rate of 0.5% for the cases: (1) marginal fields; and (2) field-school projects.

Since 2020, ANP has started studies on possible changes to these rules, conducting a Regulatory Impact Analysis (RIA) aimed at identifying the regulatory problem, the affected economic agents, legal foundation, objectives to be achieved, and identifying and evaluating regulatory alternatives.

As a result of the RIA, it was verified the relevance of reviewing ANP Ordinance No. 143/1998, in order to flexibilize the definition of the rate of payment due to landowners according to Law 9,478/1997 and standardize currently omitted points. The draft resolution also underwent a 45-day public consultation and public hearing.

ANP stated in the announcement that specific improvements were also made to the regulation to provide greater legal certainty for concessionaires and landowners.

“The resolution will take effect after its publication in the Official Gazette of the Union,” concluded ANP.

Oil Companies Will Have to Pay Up to 1% to Landowners Where Oil and Natural Gas Exploration Activities Are Conducted

ANP Approves Resolution Determining Payment of Up to 1% to Landowners Where Oil and Natural Gas Exploration Activities Are Carried Out

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Oil Companies Will Have to Pay Between 0.5% and 1% of the Production of Oil and Natural Gas to Landowners

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Oil Companies Will Have to Pay Up to 1% to Landowners Where Oil and Natural Gas Exploration Activities Are Conducted

ANP Approves Resolution Determining Payment of Up to 1% to Landowners Where Oil and Natural Gas Exploration Activities Are Carried Out

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Oil Companies Will Have to Pay Between 0.5% and 1% of the Production of Oil and Natural Gas to Landowners

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