Tuesday, 29th June 2010 by Amy Stillman

As oil continues to gush into the Gulf of Mexico, some of Brazil′s top oil & gas lawyers expect their country′s energy regulator, ANP, to impose new safety regulations on oil companies operating in the country.

Oil regulations could get tougher in Brazil

Pinheiro Neto Advogados partner Marcelo de Moura believes that environmental and safety regulations will be affected by the BP disaster because the ANP "will want to appear to be responding" to the huge environmental crisis.

However, he is less confident in the ANP′s ability to respond effectively: "I don′t think that ANP knows what they need to do, and if [the changes] are effective or not remains to be seen."

Last week the director of the ANP, Magda Chambriard, was invited for talks with BP in Houston to investigate the Deep Horizon oil spill.

"The problem is that we are in limbo now," says Machado, Meyer, Sendacz e Opice Advogados partner Jose Virgilio Lopes Enei. "ANP knows that it has to look into environmental issues more carefully; it′s expected to do so because you can imagine that if a similar accident happened in Brazil it would be a nightmare politically."

Vieira, Rezende, Barbosa e Guerreiro Advogados partner Daniela Ribeiro Davila says ANP will revise its technical requirements, mainly because the pre-salt exploration is much deeper than it is in the Gulf, so the results of a similar accident would be even more difficult to control in the pre-salt area.

Brazil is looking to expand its deep-sea activities since its discovery of huge pre-salt reserves off the states of Espírito Santo, Rio de Janeiro and São Paulo. Up to 72 per cent of the reserves have yet to be allocated.

Lawyers expect to see an uptick in investment as more oil companies turn to Brazil as an alternative to the Gulf – which is facing a moratorium on drilling. They are also seeing a boost in available rigs for the country′s deep-water oil exploration programme.

"Investors that usually invest in the Gulf are choosing to invest in Brazil because safety regulations will get stricter in the Gulf, and no one knows when companies will be able to drill there again," says Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados partner Giovani Loss.

"Everyone is moving operations to Brazil because of the opportunities of the pre-salt area," says Schmidt, Valois, Miranda, Ferreira & Agel Advogados partner Paulo Valois Pires. "But everyone is also aware of the environmental risk," he adds, a factor which has become all the more pertinent following the crisis in the Gulf.

A review of ANP′s regulations started shortly after the BP disaster according to Veirano Advogados partner Luis Fernando Pacheco, who points out that any changes to the system will be small since the regulation regime is still fairly new, having been launched in 2007.

Ribeiro sees this as a positive improvement: "Historically, with previous disasters we have seen a change in regulation. In the case of the Exxon Valdez [the in 1989 oil spill in Alaska which was the largest spill in US waters before the Deepwater Horizon explosion] all the old tankers were transformed into FPSOs [floating production, storage and offloading units], so I think the tendency is to improve the industry - people come up with new solutions."

"I anticipate additional cost, particularly for Petrobras because it will be the operator, and Petrobras will pass this risk on to big service providers and exploration companies such as Halliburton," she continues.

"I think this [the BP spill] will impact the whole industry," she adds. "Even fabricators of BOPs [blow out prevention devices] will be affected, and companies will ask for extra warranties, because this accident will establish a new paradigm."

(Latin Lawyer 29.06.2010)

(Notícia na Íntegra)