Corruption, embezzlement, fraud, these are all characteristics which exist everywhere.  It is regrettably the way human nature functions, whether we like it or not.  What successful economies do is keep it to a minimum.  No one has ever eliminated any of that stuff.

Alan Greenspan

BACKGROUND

No one knows when a government official was first bribed, but as far back as 1754 B.C. the Code of Hammurabi prohibited the practice.  As for the U.S., the first Congress passed the Federal Crimes Act which prohibited some forms of Bribery.  Traditionally bribery laws around the globe looked inward – at the subordination of domestic officials.  Virtually no attention was paid to another form of bribery – the citizens of one country bribing the officials of another to obtain business or other improper benefit.  Indeed, such practice was not only ignored, but often condoned by granting tax deductions for such payments.

Fast forward to 1977, when the U.S. Congress, in the wake of embarrassing revelations during the Watergate hearings, enacted the Foreign Corrupt Practices Act (“FCPA”).  In essence, the FCPA prohibits U.S. Persons from corruptly giving or promising anything of value to foreign governmental officials (broadly defined) in order to obtain business or other unfair advantage.  It casts a wider enforcement net by requiring covered Persons to keep accurate books and records and reliable auditing systems.  At first, there was a great wailing and gnashing of teeth by U.S. companies who claimed the FCPA would place them at a great disadvantage against less scrupulous foreign competitors.  Over time, however, many such critics learned to live with its provisions and even laud its purpose and cite its benefits.

For decades, the U.S. fought its anti-corruption and bribery (“ABC”) crusade alone.  Through pressure from the U.S., the OECD adopted the Anti-Bribery Convention in 1999 (“OECD Convention”), which requires member states to enact laws prohibiting bribery of foreign officials by their nationals (“ABC Laws”).  The Convention spawned ABC Laws, most notably the U.K. Bribery Law.  This Law goes beyond the FCPA by (i) prohibiting private bribery; (ii) extending vicarious liability, and (iii) specifically prohibiting “facilitating payments”.  Not to be outshined, many non-OECD countries significantly revamped their domestic corruption laws.[1]


Continue Reading The ABCs of Anti-Corruption and Bribery Law: What Preceded Brazil’s “Operation Car Wash” and What Comes Next?

On December 21, 2020, the National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) published (i) Resolution No. 835/2020, which extends the effective term of certain ANP resolutions with measures related to the public health emergency situation caused by COVID-19 (“Resolution No. 835”), and (ii) Resolution No. 836/2020, which defines the procedures to be followed by entities regulated by the ANP that perform oil and natural gas exploration and production activities, also in consideration of the COVID-19 situation (“Resolution No. 836”).


Continue Reading Brazil’s National Agency of Petroleum Publishes Resolutions Maintaining Measures Related to COVID-19

In a speech on 24 November 1992, marking her Ruby Jubilee on the throne, Queen Elizabeth II said, “1992 is not a year on which I shall look back with undiluted pleasure. In the words of one of my more sympathetic correspondents, it has turned out to be an annus horribilis.”

Annus horribilis. This is a moniker that oil and gas insiders might well apply to 2020 given the disastrous effects on the industry from Covid-19 pandemic (“Pandemic”) and its accompanying recession which brought a precipitous fall in demand and price. Indeed, in May the price of crude oil briefly went negative for the first time in history. This was followed by massive layoffs across the board and sharply curbed investments in planned and ongoing projects. Several major oil companies announced profound changes in their long-range focus from hydrocarbons to greener energy.

Brazil’s oil and gas industry was by no means immune from Covid-19´s fallout. In a June 29 communique, the Brazilian Petroleum Institute (“IBP”) predicted that the negative effects of the pandemic would last through the end of 2021. In addition, the pandemic returned Brazil to recession after three years of modest recovery. Despite this adversity, the Brazilian oil and gas sector, led by a proactive National Petroleum Agency (“ANP”), managed to largely maintain focus on long-term industry goals, benefiting from certain short-term regulatory relief discussed below.


Continue Reading When the Going Gets Tough the Tough get Going: Brazil Oil & Gas Thrives Despite the Pandemic

On November 27, 2020, Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) published the draft tender protocol (“Draft Tender Protocol”) for the 17th Concession Bid Round (“17th Concession Bid Round”) for exploratory blocks, establishing the procedures and rules for participation in the bid, as well as the concession contract draft, the preliminary schedule

On November 10th, 2020, the Brazilian Economy Minister, Mr. Paulo Guedes, affirmed that Centrais Elétricas Brasileiras S.A. – Eletrobras will be privatized by December 2021. Eletrobras, a mixed-capital company controlled by the Federal Government, is the largest power company in Latin America and, in Brazil, is responsible for 30% of the power generation

On September 1st, 2020, the Brazilian House of Representatives approved the text of the New Gas Law after 7 years of debates among government, institutions, market players and society. To understand the relevance of this expected change in law and its potential impacts on the Brazilian gas scenario in the next few years, it is important to take a quick look at the background that has brought Brazil to this point.

The current Gas Law (Federal Law No. 11,909) was enacted in 2009, but was not sufficient to encourage a more competitive market opening process – mainly due to the fact that Petrobras continued to exercise its dominant position in the entire gas value chain. The first amendment to the current Gas Law was proposed in 2013 by means of the Bill of Law No. 6,407, and its review gained strong support in 2016, when the Brazilian Federal Government launched the Gas for Growth Initiative.

The Gas for Growth Initiative aimed to reform the Brazilian gas regulatory framework to promote the gas market opening process as Petrobras had decided to divest its gas midstream assets. In 2019, after presidential elections, the Brazilian Government put together the New Gas Market Program, which continued with the same goals and principles of the former Gas for Growth Initiative, to create a competitive and unbundled gas market in Brazil.

Read our presentation on the Brazilian New Gas Market.


Continue Reading Natural Gas in Brazil: A New Regulatory Framework to Promote a More Competitive Market