Have there been any significant recent changes in government policy and regulation in relation to the oil and gas industry?

Oil & Gas

Brazil Small Flag Brazil

Gas to Grow Program

The MME launched a programme, known as Gás para Crescer (Gas to Grow), with the purpose of analysing and preparing measures to foster competition in the gas market, as well as to improve the open access rules to permit third-party access to core infrastructure, such as natural gas processing units and LNG terminals.

As a result of the Gas to Grow Programme, a Bill of Law with the intention to amend the Gas Law was presented to Congress, which, due to the impossibility to reach a political consensus, was substituted by Presidential Decree No. 9,616/2018. Amongst other initiatives, the Decree provides for (i) the creation of a natural gas transport System; (ii) the adoption of transport tariff based on the “entry/exit model”; (iii) the expansion of third-party access to infrastructure; and (iv) the harmonization of piped gas distribution state regulations.
Currently, different public agencies are working towards the review of several aspects concerning the unbundling of the market, new regulations for gas transportation, transparency, and the promotion of a competitive market.

On July 24, 2019, Decree No. 9,934 created a committee for monitoring the opening of the natural gas market.

The Onerous Assignment Auction

On April 17, 2019, the CNPE published the Resolution No. 6/2019, authorizing the ANP to hold the “Onerous Assignment Surplus Round” (Bidding Round), since technical assessments indicate volumes over five billion (5,000,000,000) boe (Surplus Production). In this Round, the development areas of Atapu, Buzios, Itapu, and Sepia, all located in the Santos Basin, will be offered to the market.

CNPE Resolution No. 6/2019 also approved the technical and economic guidelines applicable to the Bidding Round under the production sharing regime, amongst others:

    Brent Price of US$ 76.18;

    Average daily production of twelve thousand (12,000) barrels of oil per active producing well;

    Federal Government Profit Oil: I - in the Atapu area, 26.23%; II - in the Buzios area, 23.24%; III - in the Itapu area, 18.15%; and IV - in the Sepia area, 27.88%;

    Judgment Criterion: The highest rate of Profit Oil to the Federal Government;

    Signature Bonus: I - in the Atapu area, thirteen billion, seven hundred forty-two million reais (R$ 13,742,000,000.00); II - in the Buzios area, sixty-eight billion, one hundred and ninety-four million reais (R$ 68,194,000,000.00); III - in the Itapu area, one billion, seven hundred sixty-six million reais (R$ 1,766,000,000.00); and IV - in the Sepia area, twenty two billion, eight hundred and fifty nine million reais (R$ 22,859,000,000.00);

    Royalties: at a rate of 15% on the total volume of oil and natural gas production;

    Minimum Local Content: Buzios, Itapu, and Sepia: Development/Production Phase: 25% for well construction; 40% for the collection and disposal system; and 25% for the stationary production unit; as for the Atapu, it must meet the conditions under the Concession Contract of the adjacent area, called Oeste de Atapu, which means: 35% in the exploration phase; and 30% in the Development/Production phase;

    Payment of Financial Compensation to Petrobras: as a condition to signing the Production Sharing Agreement, the winner(s) of the Bidding Round shall compensate Petrobras for the investments made in the areas to the extent of its participation in the deposit; and

    Recovery as Cost in Oil: the amounts paid to Petrobras by the Contracted Party on the production sharing regime are recoverable as Cost Oil (as per CNPE Resolution No. 13/2019).

MME Ordinance No. 213/2019 set forth the guidelines for calculating the compensation due to Petrobras for investments made in the Buzios, Atapu, Itapu, and Sepia fields.
The final offers shall be presented up to November 6th, 2019.

ANP Permanent Offer

The Permanent Offer consists of continuous offers of fields and blocks returned to the ANP (or in the process of being relinquished), and of blocks not acquired in previous bids.
ANP is currently holding the First Cycle of Permanent Offer. In this First Cycle, 273 blocks are being offered, out of the 600 available for the Permanent Offer, as well as 14 areas with marginal accumulations. A public session was held on September 2019, and the concession contracts are expected to be signed by February 2020.

Croatia Small Flag Croatia

Recent regulatory developments in the natural gas industry and market relate primarily to the development of the LNG terminal project.

While the state and its competent authorities have shown perseverance and determination to finish the project of LNG terminal, first round in the open season proceedings resulted with negative economic test. As a consequence thereof, the planned capacity of the FSRU ship has been decreased to correspond to the market situation in Croatia and the region.

The Gas Market Act provides that the function of the wholesale gas market supplier - supplier of the public service gas suppliers, would be abolished after 31 March 2021. Also, as of that date the public service gas supply would be performed by public service suppliers selected on public tenders. It is expected that the new framework will contribute to the opening of market for household supply. However, it remains to be seen if such deregulation will be postponed again.

Greece Small Flag Greece

Τhe fundamental legal framework for Hydrocarbons has been set in Greece by Law 2289/1995 as amended by Law 4001/2011 which have not yet been further amended by a new law.

Italy Small Flag Italy

The main changes refer to environmental regulation and safety regulation.

The so-called Environmental Code (Legislative Decree no. 152/2006) implemented the EU Directive 2010/75 (the Industrial Emissions Directive or IED) which is the main EU instrument regulating pollutant emissions from industrial installations.

The relevant provisions aim to achieve a high level of protection of human health and the environment taken as a whole by reducing harmful industrial emissions, in particular through better application of the so called Best Available Techniques (BAT). The oil and gas industries are thus required to operate in accordance with the AIA permits (Autorizzazione Integrata Ambientale) granted by the Ministry of Environment, after verification of compliance with the BAT.

With respect to safety regulation, Legislative Decree no. 105 of 26 June 2015 implemented EU Directive 2012/18/EU (or Seveso III Directive) on the control of major-accident hazards involving dangerous substances. This regulation aims at controlling major chemical accident hazards and establishes minimum quantity thresholds for reporting and safety permits. There are two lists: one names individual substances, and another designates hazard categories for those substances. The oil and gas industry is required to operate having documents based on hazard and quantity; these documents are Notification, Major Accident Prevention Policy (MAPP), and Seveso Safety Report.

Mexico Small Flag Mexico

Although the constitutional framework has not been modified since 2013 and therefore, private investment in oil and gas activities is fully allowed, the recently elected government has certainly expressed it has a new vision of what should the government do to increase oil production in Mexico and decrease import of oil products.

Federal government now intends to strengthen PEMEX role in activities such as exploration, production and refining of crude oil.

Federal government has taken, among other actions, the following:

a. Suspension of tenders to award exploration and extraction of hydrocarbons contracts which were called by CNH.
b. Suspension of farm out tenders to choose a partner for PEMEX to exploit, jointly with such partner, certain areas that were allocated to PEMEX.
c. Suspension of electric auctions called by CENACE.
d. Revision of PPA contracts awarded under the first, second and third long-term electric auctions.
e. Suspension of open seasons called by PEMEX logistics to award storage capacity.
f. Suspension of certain energy projects.
g. Inclusion of new requirements by SENER to obtain import and export permits for oil products, such as gasolines, diesel, jet-fuel and aircraft gasoline.
h. Inclusion of additional requirements as to obtain permits from CRE for downstream permits.

Additionally, federal government has issued and announced new refining programs.

These programs aim to: (i) increase PEMEX investments in oil activities in approximately $75.00 billion pesos during 2019 (approximately USD $3.7 billion); (ii) construction of a new oil refinery in Dos Bocas, Tabasco State; (iii) aim to be self-sufficient in three years in connection with the oil products (mainly gasolines and diesel) that Mexico requires since as of this date Mexico, as per official government information, imports 75% of the gasolines and diesel it requires and only produces 25%; (iv) lower the costs of gasolines and diesel.

Furthermore, the Energy Ministry has announced the following plans related to the National Refining Plan: (i) rehabilitation of the six existing refineries as to reach, by 2020, a production of 600 thousand barrels of gasolines per day; (ii) Construction of the new refinery in Dos Bocas, Tabasco which is expected to have a capacity for processing 340 thousand barrels daily.

As mentioned, although no constitutional amendments have been made, federal government would seem to prefer to carry out oil and gas activities though the State-Owned Productive Company PEMEX and award service agreements to private companies to develop and carry out specific works and services under PEMEX supervision, rather than awarding contracts.

Certainly, the energy public policy to be implemented by this government will be important as to determine the viability of new projects and investment opportunities, nevertheless, the recent elected government has been in office for a short term and most of these policies are still under revision as of this date.

Morocco Small Flag Morocco

A draft law no. 94-17 related to downstream natural gas sector prepared by the Ministry of Energy has been drafted in the context of the national plan for the development of natural gas which was developed through the roadmap that was launched on December 16, 2014 and notably aims at the realization of the Moroccan "Gas to Power Project" for which a tender process is expected to be launched by the end of 2019 / beginning of 2020.

The purpose of this draft law is to support the implementation of this project and organize the control of the different activities in regulating the purchase, import, infrastructure building and operations, storage, transport and distribution of natural gas (excluding the natural gas fuel "Gaz naturel Carburant") together with the construction and operation of gas installations.

Mozambique Small Flag Mozambique

No. The main legislation regulating the oil and gas was approved in 2014 and 2015.

Nigeria Small Flag Nigeria

Regulatory advancement in the Petroleum Industry of Nigeria has remained stagnant. This is evidenced by the fact that the Petroleum Industry Bill (PIB), an omnibus law meant to regulate the entire sphere of the oil and gas industry by consolidating and repealing all extant petroleum legislation, struggled to see the light of the day despite its initial proposal before the National Assembly in 2008.

PIB was eventually fragmented into four Bills: Petroleum Industry Governance Bill (Governance Bill), Petroleum Industry Fiscal Bill (Fiscal Bill), Petroleum Host Community Bill (Host Community Bill) and Petroleum Industry Administration Bill (Administration Bill). Each bill seeks to address a key aspect of the challenges faced in the Nigerian Oil and Gas Industry. The Governance Bill is intended to outline a strategy for the creation of commercially viable petroleum entities, through the creation of efficient governing institutions with clear and distinct roles. The Fiscal Bill proposes the new fiscal package for the oil and gas industry with an exhaustive royalty regime, new tax arrangements and incentives for petroleum processing. The Host Community Bill is intended to enable host communities’ benefit directly from the operations taking place in their communities and the Administration Bill seeks to address the new licensing and regulatory arrangements across the value chain in the oil and gas sector.

On 25 May 2017, the Senate of the National Assembly passed the Governance Bill. However, for the Governance Bill to effectively become Law, it needs to be passed by the House of Representatives and assented to by the President as enshrined in Section 58(3) & (4) of the Constitution of the Federal Republic of Nigeria (1999 as amended). The Constitutional provisions are also applicable to other fragments of the PIB pending before the National Assembly.

Bulgaria Small Flag Bulgaria

The most significant and recent change in the governance policy in relation to the gas market in Bulgaria is the almost completed creation and launch of a gas exchange market. The necessary legal and regulatory provisions have been introduced in the second half of 2019. A newly incorporated company, Gas Hub Balkan EAD, has been established by Bulgartransgaz to operate the future exchange market. Certain initial legal measures for liquidity of the market have been introduced in the Energy Act. Upon launch of the gas exchange platform, it is expected that its market rules, traded products, organisational structure, and liquidity measures will be further developed including using best foreign practices.

In the last years the Ministry of Energy has been developing in a collaboration with the mining industry and academics major improvements in the legal framework governing upstream oil and gas operations and mining activities in general. So far, published draft legislative amendments do not significantly change the regulatory environment for oil and gas exploration and exploitation. The terms and procedures for the licence tenders and competitive procedures are scrutinised and developed in more detail. Some more favourable provisions to investors are also proposed. However, a major change contemplated may affect the royalties regulations.

In this context, in July 2019 the Government approved the launch of a new tender for the deep offshore exploration block Han Tervel (ex Teres Block), located in the furthest South-East section of the Bulgarian exclusive economic zone. The block neighbours the two other major blocks operated by Shell and Total. The official start of the competitive procedure is pending publication of the notice in the Official Journal of the EU.

A new law regulating the trading in fuels (petroleum and petroleum products) has been introduced in 2019. According to it, retail through petrol stations, wholesale, transport and storage of fuels, as well trade with LPG are activities subject to a special licensing regime. Due to certain imperfections in the law, its final enforcement has been deferred several times. Currently, the obliged active economic operators must apply for their licences by 26 January 2020.

Indonesia Small Flag Indonesia

In January 2019, the Government issued GR 1/2019, which requires foreign exchange proceeds deriving from the export of natural resources, including oil and gas, to be placed in the Indonesian financial system through a special account in an Indonesian foreign exchange bank no later than the end of the third month after the Registration of Export Declaration (Pemberitahuan Ekspor Barang). The funds in the special account can only be utilized by the PSC Contractor for certain payments, such as customs, loans, imports, profits/dividends and other purposes permitted by the Indonesian Investment Law. Please see our response to Question No. 10.

In November 2018, Supreme Court decision No. 69 P/HUM/2018 granted a request by the Pertamina United Workers Union Federation (Federasi Serikat Pekerja Pertamina Bersatu or “FSPPB”) related to the sequence of options for the management of oil and gas working areas with an expiring PSC as provided in MEMR Regulation No. 23 of 2018. The Supreme Court ruled that if the MEMR regulation prioritized the extension of a PSC by the PSC Contractor over a takeover of the working area by Pertamina, it would be in violation of, among others, Article 33 of the Indonesian Constitution and therefore have no legally binding force to the extent that it could be interpreted as giving any particular order of priority.

MEMR Reg. 3/2019 was enacted in April 2019 to amend MEMR Reg. 23/2018 and changed several provisions regarding the management of a working area with an expiring PSC. Those changes included a provision that if the future management of an expiring PSC is granted to Pertamina, Pertamina can partner with a private entity other than the Contractor of the underlying PSC but must maintain at least 51% PI in the renewed PSC. Another change is the provision that if the new PSC Contractor of a renewed PSC and the PSC Contractor of the expiring PSC cannot agree on provisions regarding funding or activities needed to be carried out before the renewed PSC becomes effective, the MEMR may step in and stipulate policies regarding such matters.

In August 2019, the MEMR issued Regulation No. 7 of 2019 regarding the Management and Utilization of Oil and Gas Data (“MEMR Reg. 7/2019”), revoking the previous regulation on the same subject matter enacted in 2006. MEMR Reg. 7/2019 contains more detailed provisions regarding the management and oil and gas data, including with respect to the management of the oil and gas data of an expiring PSC, the exchange of oil and gas data with an offshore party, and the destruction of oil and gas data.

United Kingdom Small Flag United Kingdom

In June 2013, Sir Ian Wood was asked to lead an independent review to look at how economic recovery from the UKCS could be maximised. The Wood Review final report was published in February 2015. It emphasised the need for existing collaboration in the oil and gas sector to be extended across all areas, including production efficiency, rig sharing, more effective deployment of new technology, improved shut-down coordination, sharing access to key spares, and decommissioning. The UK Government, with support from industry, decided to implement the recommendations of the Wood Review, and amongst other things this led to the establishment of the OGA in 2015.

Turkey Small Flag Turkey

As a part of liberalisation and privatisation of oil and gas industry in Turkey Natural Gas Market Law and its secondary legislation was enacted in 2001 in order to liberalise and regulate natural gas market activities in Turkey. With regards to petroleum market activities, the TPA 6491 redefined the petroleum market with similar purposes and established a bipolar structure in which the upstream activities, i.e. the exploration and production of petroleum (including oil and gas), are governed by TPA while the downstream activities are governed by the Petroleum Market Act. In this context oil and gas activities are governed mainly by TPA, Petroleum Market Act and Natural Gas Market Law. Liberalisation and development of energy market in Turkey are ongoing processes which remain as the most cared policies of MENR. MENR attaches importance on improving domestic oil and gas capacity and storage in order to reduce the dependency on imported gas across the country.
With this respect, great number of projects both in oil and gas market are being carried out across the country. Turkish government has also taken crucial steps for supply diversity and security. LNG imports were made from 11 countries through 4 LNG terminals this year. These are steps in achieving Turkey’s long-standing ambition of becoming an energy trading hub in the region in the early future by developing the geo-strategic position of the country.

Another recent development was the launch of the Organized Wholesale Natural Gas Sales Market, Turkey’s natural gas spot trading platform, on September 1, 2018. The platform enables spot market transactions in natural gas, balancing transactions and reconciling of imbalances which is of great importance in line with country's ambition of becoming an energy trade centre in the region and will enable the country to have a strong and effective role in the pricing of natural gas. Turkey contributes to the region significantly by enabling natural gas trading activities to be performed in an equal and transparent manner.

Rules and Procedures of Export Quantity and Methods of Operation of Spot Pipeline Gas was published on the Official Gazzette dated 19 September 2019 and numbered 30893. With this regulation, it is aimed by EMRA to enable the market players to procure natural gas at a better price under short-term contracts by allocating a certain part of transmission capacity of cross-border natural gas pipelines. In this way, spot pipeline gas export licence holder companies may purchase gas subject to contracts executed on monthly or annual basis which will result in cheaper gas procurement to the national gas market. Licence holder companies may inform EMRA in relation to their capacity request subject to a certain fee. EMRA will conduct a competition on the electronic platform if there are requests exceeding the capacity. As a result of this regulation, price of natural gas is expected to drop in the short term and it is aimed to strengthen Turkey’s position in negotiating natural gas export contracts to be executed in the long term.

While Turkish Natural Gas Market legislation enables third parties to access to the network by carrying their natural gas via transmission networks although they are not the owners or the operators of the network, a tariff in relation thereto has not been published yet. Such tariff is expected to be published soon. Third parties’ access to the market would result in a more competitive market which contributes to long-standing ambitions of Turkey. In this vein, third party access to transmission network is regulated and rules of refusal to third party access to
network are determined in line with the respective EU Directives and regulations.

Israel Small Flag Israel

The most significant recent change in government regulation occurred on December 17, 2015 (and as amended on May 22, 2016), with the approval of the Framework in order to propel the halted development of Israel's offshore natural gas resources.

The Framework was primarily designed in response to the Israel government's adoption in June 2013 of the principal recommendations of an inter-ministerial committee, which included, a required minimum domestic supply of natural gas, regulatory approval of natural gas exports, a requirement that each leaseholder of a natural gas field connect the field to domestic supply lines and allocate a portion of reserves to the domestic market, and government involvement in planning allocation and construction of onshore and offshore infrastructures, as well as the June 2015 decision of the National Security Ministers Council decision to delay the expansion of the Tamar field and the development of the Leviathan, Karish, Tanin, and additional natural gas fields.

On May 22, 2016, following several weeks of negotiations, the government adopted resolution no. 1465 entitled "an amendment to the framework for the increase of the quantity of natural gas extracted from the Tamar natural gas field and expeditious development of the Leviathan, Karish and Tanin natural gas fields and other natural gas fields" ("Resolution 1465").

Resolution 1465 mainly consists of the adoption of an amendment, which is entitled "maintaining a regulatory environment which encourages investments" (the "Amended Regulatory Clause") as opposed to the prior title of "maintaining a stable regulatory environment". This shift of focus from a regime which is necessarily "stable" to a regime which strives to "encourage investments" is consistently reflected in the wording of the Amended Regulatory Clause. While the Amended Regulatory Clause still refers to a 10-year long regulatory climate in the natural gas sector which is intended to attract investments (as did the previous clause), it no longer guarantees nor does it mandate that the government will abstain from and oppose the enactment of any material changes in matters such as taxation, ownership of reservoirs and export legislation. Rather, the new language provides that the government will carefully consider future regulatory changes which relate to the "government take" from the leaseholders' profits and other matters dealt with in the Framework when such changes could have a material adverse effect (in the eyes of a reasonable investor) on the leaseholders.

The new clause further provides that, in the event of a material change of this kind, the government will undergo an evaluation process which will explore and form solutions in order to sustain the economic viability of the projects. Such evaluation process will take into account, inter alia, conformity with OECD and other worldwide standards, prior investments made to develop the projects (even if made during the pre-lease license period) and the existence of duly approved export agreements. The evaluation process is to take no longer than the earlier of (i) five months from the date when the change in question takes effect and (ii) 60 days from receipt by the government of all relevant materials for the evaluation process.

The Petroleum Commissioner's Guidelines regarding Section 76 of the Petroleum Law: Transfer and Charge of Petroleum Rights, were published on December 31, 2015. These Guidelines have not yet been passed by the Knesset into law yet the Commissioner relies on them when making decisions with respect to the issues delineated therein including the transfer of petroleum rights by a particular holder.

Norway Small Flag Norway


United States Small Flag United States

The U.S. does not have a national energy policy. Largely depending on the ownership of the land surface, oil and gas resources in the U.S. are owned and controlled by the federal and state governments and by private persons. There is non-uniform federal, state and local regulation of the industry in the areas of environment, safety, health and tax, as there is no single regulatory body with jurisdiction over all the oil and gas resources and their development in the U.S. Given this multijurisdictional regulatory body, it is difficult to pinpoint any one significant government policy in the U.S. affecting the entire industry, other than the support for a free market.

Updated: January 14, 2020