On July 1, 2020, the National Council of Energy Policy ("CNPE") published Resolution No. 04/2020, which provides for the royalty reduction and stimulus to small or medium-sized companies in the oil and natural gas exploration, development and production activities ("Resolution").
In support of the National Energy Policy, the Resolution establishes that the National Agency of Petroleum, Natural Gas and Biofuels ("ANP") assess the application of measures for a royalty reduction of up to 5%, pursuant to article 47, paragraph 1, of Law No. 9,478/1997 (“Petroleum Law”) for fields awarded to companies classified as small or medium-sized in accordance with ANP criteria.
The Resolution recommends that the ANP continue studying, and eventually implementing, incentives for exploration, development and production (i) by small or medium-sized companies and (ii) in relation to hydrocarbon accumulations or fields with marginal economics.
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