The CNPE published, in the Federal Government Official Gazette on May 3, 2017, CNPE Resolution 5/2017, which establishes guidelines for changing the methodology of calculation of the “Petroleum Reference Price” by the National Petroleum Agency ("ANP"). It proposes that it should consider, not only physio-chemical characteristics, but also rules regarding intermittent periods, transitions and periods of shortage, to enhance regulatory stability and reduce uncertainties regarding investments required for the development of oil production in the country.
Decree No. 9,042/2017 amends chapter IV of Decree No. 2,705/1998, which provides for the petroleum reference price.
According to the amendments, the calculation methodology of the monthly petroleum reference price in Reais per cubic meter (R$/m³) in the standard condition of measurement shall be established by the ANP as from January 1, 2018.
The petroleum reference price will be fixed based on the average monthly value of a standard basket comprising up to four similar types of petroleum quoted in the international market.
The types of petroleum that will be used for measurement must be notified by the concessionaire, at least 20 days before the start of production of each field, from among types of petroleum prevalent in the international market which have similar physio-chemical characteristics and a price-competitiveness equivalent to those to be produced.
The ANP will have a period of ten days, from the date of receipt of the above mentioned information, to approve the types of petroleum notified by the concessionaire as comprising the standard basket, or propose their replacement by other types which it considers to be more representative of the market value of the petroleum to be produced.
A consolidation of the reference price of the petroleum extracted from each field in the previous month will be issued by the ANP, incorporating updates in the international prices of the petroleum types which make up each respective standard basket, and the resulting revisions due to the types of petroleum originally selected now proving to be unrepresentative.