2. ANP
what
is the
THE OBJECTIVES OF THE ANP ARE THE FOLLOWING:
TO REGULATE
To establish the regulations (resolutions, normative instructions) for the
operation of the industries and the trade of oil, natural gas and biofuels.
TO CONTRACT
To grant permits for activities performed by the regulated industries; to
promote bidding rounds and to execute contracts on behalf of the Federal
Government with concessionaires for the exploration, development and
production activities.
TO INSPECT
To enforce the standards on the activities performed by regulated
industries, directly or by means of agreements with other public entities.
The Brazilian National Agency
of Petroleum, Natural Gas
and Biofuels is the regulating
organization for the activities within
the oil, natural gas and biofuels industry
in Brazil. The federal agency, which
reports to the Ministry of Mines and Energy,
runs the national policy for the sector,
focusing on the assurance of fuel supply
and the interests of consumers.
A COMMITMENT TO THE ENVIRONMENT
The ANP constantly focus on the protection of the environment. The Agency works in
partnership with the Ministry of the Environment, with the Brazilian Navy Command,
with the academia and state agencies, in order to ensure that environmental issues
are taken into account in the regulated agents’ decisions. In order to select the
areas to be included in the bidding rounds, the ANP observes the environmental
restrictions recommended by the IBAMA (Brazilian Institute of Environment and
Renewable Natural Resources) and the states’ environmental agencies.
The Agency participates in the Brazilian Motor Vehicles Air Pollution Control
Program (Proconve), by issuing local standards and terms for the adoption of less
polluting diesel types by the Brazilian fleet of buses and trucks. It is also a member
of the governmental working group established by the Ministry of the Environment
that prepared two editions of the Brazilian inventory of emissions for trucks, light
and heavy vehicles and motorcycles.
A REFERENCE CENTER FOR INFORMATION ON THE SECTOR
The ANP is a reference center for data and information on the oil & gas industry:
it keeps the Exploration and Production´s Database (BDEP); it promotes studies on
petroleum potential and the development of the sector; it receives and discloses reports
on findings; it discloses the official statistics on reserves, refining and production of oil,
gas and biofuels in Brazil. It also constantly carries out and discloses surveys on the
quality of fuels and lubricants and the pricing behavior of these products. It consolidates
and discloses information on the regulated markets and regarding the investments in
research, innovation and training oriented to the regulated industries.

3. The ANP is run by a board of directors consisting of a director general and four
directors, to serve four non-matching years of office. All decisions of the board are
published on the ANP website. The Agency also carries out public hearings before
taking any decision on rules that may affect any right. ANP’s staff comprises about
800 civil servants - most of them were approved in three competitive examinations
held in 2004, 2008 and 2013. Nearly half of them are experts in geology, geophysics
HOW THE
AGENCY
WORKS
or oil & natural gas regulation. Almost all civil servants have a bachelor’s degree
and over 50% have doctoral or master’s degree, or have attended specialization
courses. With a view to directly running the regional operations, the Agency has
offices in the cities of Brasília, Rio de Janeiro, São Paulo, Salvador, Manaus, Belo
Horizonte and Porto Alegre, in addition to outstations in the cities of São Luís, Recife
and Belém.

4. Para saber mais sobre as regras para exploração e produção de petróleo e gás acesse www.anp.gov.br/?pg=57842.
Oil & Natural
Gas E&P
The role of ANP in the oil & natural gas sector
begins by promoting geological and geophysical
studies in order to outline areas with production
potential. The Agency also stores and organizes
geological, geochemical and geophysical data
on the Brazilian sedimentary basins, the analysis
of which indicates the potential for petroleum
in such areas.
The ANP supports the Brazilian National Energy
Policy Council (CNPE) in decisions on the areas
to be offered for concession or production sharing
in the bidding rounds.
For the bidding of areas, the ANP prepares the tender
protocols, promotes public sessions and prepares
the drafts contracts - either for concession or for
production sharing. In the case of concessions,
the Agency executes the contracts on behalf of
the Federal Government. It is also the Agency’s
responsibility to measure the production in the oil
and natural gas fields - an activity that substantiates
the distribution of the governmental takes.
Governmental Takes
Based on the results of the measurement of oil and natural gas, the ANP calculates
the values of the governmental and third parties’ takes that, in addition to the Brazilian
taxes in force, the oil companies have the contractual obligation to pay to the Federal
Government.
The following are governmental takes: signature bonuses, royalties, special take (which
levy on large production fields under concession contracts) and payment for area
occupation or retention.
Municipalities, States of the Federation, the Federal Government and landowners who
benefit from the governmental takes receive the amounts directly from the Brazilian
National Treasury, as a financial compensation for the extraction of natural resources.
Information on the amounts of the royalties and special takes can be found at
www.anp.gov.br/participacoesgovernamentais.
THE ANP from well to wheel
MIXED FRAMEWORK FOR THE REGULATION OF THE E&P SECTOR
A mixed regulatory framework has been in force for the oil & natural gas exploration
and production (E&P) since 2010. For 98% of the total Brazilian sedimentary basins
area the concession regime established by Law 9478 of 8.6.1997 is applicable.
In 2010, Law 12351 of December 22 established the production sharing regime
for the areas not yet granted of the pre-salt polygon and other strategic areas.
The law also established the Social Fund, which allocates portions of revenues
derived from production sharing contracts for programs in the areas of education,
culture, sports, public health, science and technology, and environment, as well as
programs to mitigate the effects of climate changes.
Regardless of the contract type, the ANP is solely responsible for authorizing,
monitoring and controlling, in addition to measuring the production in any area of
the Brazilian territory where oil & natural gas prospecting or extraction activities
are being performed. In any of the regimes, the hired companies pay royalties.
To learn more on the oil & natural gas E&P rules, visit www.anp.gov.br/regime.

5. Natural Gas
The Brazilian Constitution establishes
that the transportation of natural
gas via pipeline is a monopoly
of the Federal Government; however,
the states are entitled to the exploration
of the piped gas distribution services
in their territories.
Since its establishment and within
its legal scope, the ANP works to
promote the expansion of the gas
pipeline network. In 2009, the Gas
Law (Law 11909 / 2009) assigned
the Agency with the duty to authorize
the commercialization of natural gas,
to promote bidding rounds and to
execute concession contracts for
pipelines; to establish (in case of
concessions) or approve (in case
of permits) natural gas transportation
rates and inspect the permits and their
resulting contracts.
The Agency also regulates and
inspects the warehousing of natural
gas, oversees the transportation of
the product in the network and
coordinates it in contingency situations.
Refining,
Transportation and Storage
The ANP’s duties also include the authorization of companies to build, operate and expand
refineries, natural gas processing plants, as well as storage and transportation plants for
oil and its products. The Agency must also inspect all those activities.
The following also require authorization from the ANP - and are inspected by the Agency:
the import and export of oil, diesel, biodiesel and ethanol, the production and warehousing
of biodiesel and ethanol as well as the distribution of compressed natural gas and liquefied
natural gas (LNG).
The ANP is responsible for ensuring
that the regulated companies put in place
demonstrably effective procedures and
techniques for operational safety, energy
efficiency, and protection of the human
health and of the environment.
The ANP approves and oversees onshore
and offshore oil & gas exploration
and production facilities (production
platforms, rigs, collecting stations and
onshore wells). Moreover, equipment
and procedures for handling, storage,
gas processing and transportation of oil
and natural gas require authorization and
are subject to inspection by the Agency.
The regulatory framework for the
Brazilian offshore operational safety
(see ANP Resolution No. 43/2007),
which is regarded as one of the most
modern in the world, is based on a
comprehensive study on the policies
adopted in countries such as the
United States, Canada, Norway,
the United Kingdom and Australia,
and on lessons learned from previous
incidents.
The rules for operational safety work
as a guide to hazard identification and
risk assessment of each facility.
The Agency is a member of the
International Regulators’ Forum (IRF),
in which operational safety issues
are discussed and addressed.
Stimulus
to the Domestic Industry
The ANP stimulates the growth and consolidation of the domestic industry of materials,
equipment, systems and services for the oil & natural gas sector. Since 2003, the ANP
has required that the concessionaires of areas for oil & gas exploration undertook to
purchase a given percentage of goods and services from domestic suppliers. That is
the local content, which has become one of the assessment criteria for the bidders in
the rounds for concession since 2005. The ANP also oversees the compliance with
such commitments.
Inspection
of Operational
Safety

6. Research,
Development & Innovation
The contracts for oil & gas exploration and production include the RD&I Clause,
which requires from the signatory companies a commitment to invest in research,
development and innovation projects and programs. In the case of concession
contracts, the funds to be invested equal 1% of the gross revenue from the fields
with major production (those which pay special takes). At least 50% of the funds
out of this percentage must be invested in research institutions accredited by the ANP.
In turn, RD&I projects from the companies themselves or their affiliates in Brazil may
receive up to 50% of the total planned. Those same rules apply to the production sharing
contracts, except that the percentage of 1% is levied on total gross revenue. In the case
of onerous assignment contracts - such as the one existing between Petrobras and the
Pré-Sal Petróleo SA - the percentage is 0.5%, also levied on the total gross revenue; but,
in that case, the funds must be applied exclusively in accredited research institutions.
The ANP oversees the compliance with the RD&I Clause.
From 1998 to 2014, the funds intended for RD&I were generated by concession contracts
and totalized over BRL 9 billion.
Professional Training
Since 1999, the ANP has conducted its Human Resources Program - PRH-ANP - using funds
from royalties, as well as from the RD&I Clause (since 2013). By 2014, the total funds allocated
for the PRH-ANP exceeds BRL 356 million.
The funds enabled the granting of more than seven thousand scholarships at undergraduate,
masters’ and doctorate levels, in addition to funds to support academic activities.
About 90% of fellows graduated between 2006 and 2012 were employed by the professional
market of oil, natural gas and biofuels, or were absorbed by academic institutions.
Currently, the PRH-ANP covers 55 programs in 32 universities and higher education centers
in 16 Brazilian states.
Participation
of Small and Midsize
Companies
The ANP encourages the participation of small and midsize companies
in the oil-related activities. Since 2005, the Agency promotes bidding
rounds taking into account the inclusion of inactive areas with marginal
accumulations of oil and gas.
Although these areas are no longer attractive to large companies due
to smaller volumes of oil or gas produced, they may still be beneficial
to smaller companies, as they require less investment and they already
rely on good infrastructure. The reactivation of these areas has a positive
impact on the economy of the country’s less developed regions and results
in the generation of jobs and income for the population of the regions
involved and revenues for public investment.
AWARD FOR THE INNOVATIVE ENTREPRENEURS
With a view to acknowledging and encouraging the efforts of research institutions and
Brazilian companies that seek innovative solutions to the oil, natural gas and biofuels
industry, the ANP has created the ANP Technological Innovation Award. The award
focus on works carried out using the funds derived from the RD&I Clause and which
contribute to the increase of local content in goods and services related to oil activities.

7. The ANP’s mission is to ensure
the domestic supply and to protect
the interests of fuel consumers.
To do so, in the fuel and lubricants
distribution and sale areas, the Agency
prepares and publishes technical
resolutions and authorizations that
regulate the activity of thousands
of companies in different segments:
storage, distribution and retail
of automotive fuels (oil products,
ethanol, biodiesel), as well as solvents,
lubricants and liquefied petroleum gas
(LPG, bottled gas).
The Brazilian domestic supply scenario
is composed of more than 100,000
economic agents: the ANP regulates
the activities of about 300 distributors,
almost 40,000 service stations, more
than 55,000 LPG resellers of over 60
biodiesel producers, around 130 lubricant
producers, about 380 ethanol plants
and over 12,000 supply points.
The ANP also monitors the transportation
of the products commercialized by these
economic agents.
MARKET PRICING SURVEY
Fuel prices in Brazil have been unregulated since January 2002. Therefore, there
is no pricing schedule or control. In order to guide the consumer, the ANP follows,
by means of a weekly survey, the pricing behavior of regular gasoline, hydrated
ethanol fuel, non-additive diesel oil, compressed natural gas (CNG) and liquefied
petroleum gas (LPG), charged by distributors and service stations. The results of
the survey are published weekly at www.anp.gov.br/precos.
In case the ANP finds evidence of violation against the economic order, it informs
the entities of the Administrative Council for Economic Defense (CADE).
Distribution and sale
of fuels and lubricants
Fuel Quality
One of the ANP’s activities directly oriented towards protecting the consumers’ interest
is the specification of the physical and chemical characteristics of oil products, natural
gas, ethanol and the biodiesel-diesel blend. All fuel and lubricants commercialized in
Brazil must comply with these specifications.
In order to check the compliance with such specifications, the ANP established the
Fuel Quality Monitoring Program (PMQC) 16 years ago. Every month, more than
20,000 samples of gasoline, ethanol and diesel are collected in service stations. The
material is analyzed at ANP’s Center for Research and Technological Analysis (CPT,
located in Brasília), as well as 22 laboratories at universities and research institutions
hired by the Agency. The analyses reveal possible sources of non-compliance with the
technical specification.
The data are published on a monthly basis at www.anp.gov.br/boletinsqualidade.
Since 2013, the ANP has led task force
operations in several service stations
nationwide. In addition to the entities
mentioned above, the task forces may
bring together, in one single operation,
the Inmetro (Brazilian National Institute
of Metrology, Standardization and
Industrial Quality) and its State Institute
of Weights and Measures (IPEM),
the regional Consumer Protection
Agencies (Procons), Assigned Services
Protection Offices and other citizen rights
protection entities.
Supply inspection also covers production,
import, export, refining, processing,
treating, processing, transportation,
transfer, storage, warehousing,
distribution and sale of oil, natural
gas and their products.
Intelligent
Inspection
of the Supply
The results of quality monitoring,
as well as data from weekly fuel
prices surveys and the reports
received from public entities,
consumers and economic agents
are analyzed and taken into account
in the ANP inspection action plan.
With a view to enlarging the inspection
scope, the Agency keeps cooperation
agreements with Federal Police,
Prosecutors’ Offices from states,
the Federal District and Territories,
Fire Departments, state departments
of Finance and state capitals’ local
governments.

8. The enactment of Law 11097 on
January 13, 2005, expanded the role
of the ANP and introduced the biodiesel
to the Brazilian energy matrix.
Since then, the Agency was renamed
Brazilian National Agency of Petroleum,
Natural Gas and Biofuels, undertaking
the duties of specifying and inspecting
the quality of biofuels and ensuring
market supply, in the interest of
consumers and the environment.
In 2011, Law 12490 of November 16
further expands the duties of the ANP
regarding biofuels: the Agency, which
already specified and inspected the
physical and chemical characteristics
of ethanol, began regulating also
the production market.
In addition to the preparation
of regulatory standards, the role
of the ANP regarding biofuels
comprises the authorization
and inspection of transportation,
transfer, storage, warehousing,
import, export, distribution, retail
and commercialization, as well
as the activities of production
plants. The ANP is also responsible
for compliance assessment
and certification of biofuels.
Biofuels
BIODIESEL BIDDING ROUNDS
Since 2005, the ANP has promoted the biodiesel bidding rounds, in which diesel oil
producers and importers acquire biodiesel to compose the diesel / biodiesel blend
on the current legal rate.
The bidding rounds, a system established by the Brazilian National Energy Policy
Council, are fundamental to ensure the availability of biodiesel in quantity sufficient
to compose the blend as set forth by the law. In the early years, the bidding rounds
stimulated the then arising biodiesel producing sector and, at the same time,
encouraged the introduction of new entrepreneurs in the activity.
The bidding round is mandatory for producers and importers with market share superior
to 1%. The biodiesel acquired is sold to distributors that blend it to the fossil diesel.
Glossary
In case of questions about terms used in this
publication, refer to the ANP Glossary on the
Agency’s website.
www.anp.gov.br/glossario
Legislation
Below are the main standards in the oil, natural
gas and biofuels sector:
• Constitution of the Federative Republic of Brazil,
article 177;
• Law 9478/1997, which regulates the Brazilian
national energy policy, the activities regarding
the state petroleum monopoly, and establishes
the Brazilian National Energy Policy Council
(CNPE) and the ANP;
• Decree 2455/1998, which implements the ANP;
• Decree 2705/1998, which establishes criteria to
calculate and collect royalties and special takes;
• Law 9847/1999, which regulates the inspection
of activities regarding the domestic fuel supply;
• Law 11097/2005, which introduced the biodiesel
to the Brazilian energy matrix;
• Law 11909/2009, which regulates the activities
regarding the transportation of natural
gas, as well as the treating, processing,
warehousing, liquefaction, regasification and
commercialization of the product;
• Law 12276/2010, which authorizes the Federal
Government to onerously assign to Petrobras
the right to perform research activities and
prospection of up to 5 billion barrels of oil
equivalent in pre-salt areas;
• Law 12304/2010, which established and defined
the duties of the state-owned company Pré-Sal
Petróleo S/A (PPSA);
• Law 12351/2010, which establishes the
production sharing regime for the areas not
yet granted of the pre-salt and other strategic
areas, establishes the Social Fund and amends
provisions of Law 9478/1997;
• Law 12490/2011, which included ethanol among
the products whose production, distribution and
commercialization are regulated by the ANP, like
the other fuels;
• CNPE Resolutions.
www.anp.gov.br/legislacao

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