Gas Plus Program

On March 13, 2008, the Secretariat of Energy issued Resolution No 24/2008, which created an incentive program for the natural gas production called "Gas Plus" (the “Program”).

The Program aims to improve the categorization of new volumes to be incorporated to the system compared to those included in the Agreement with Natural Gas Producers 2007 – 2011 (the “Agreement”). The natural gas produced under the Program shall not be deemed as part of the volumes of the Agreement, and its price shall not be subject to the price constraints established therein.

The Program is in line with other measures adopted by the National Government seeking to expand energy supply, such as the Energy Plus and Energy Delivery (distributed generation) Programs in the electricity market.

The natural gas sold under the Program can only be destined to the domestic market and may be sold directly to consumers included in Resolution No 752/2005 of the Secretariat of Energy as amended (unbundling).

The natural gas production shall be authorized as “plus” by the Secretariat of Energy ad referendum of the Ministry of Federal Planning, Public Investment and Services, upon compliance of the following requirements:

1.    Conditions of the producer:

a)    The producer must have signed the Agreement and complied with the natural gas deliveries that it undertook therein.

b)     In the event of a transfer of a filed in which gas qualified as “GAS PLUS” is produced, to continue qualifying as “GAS PLUS” the transferee who acquires the field must comply with the conditions described in point a) above.

c)     The producer can be a concessionaire or a producer associated to a concessionaire, with rights over the natural gas production.

2.    Conditions of the natural gas: It must be natural gas produced in:

a)     an Exploitation Concession granted as a consequence of a discovery informed after the Program was established; or

b)     an Exploitation Concession granted before the Program was established, in the following cases:

(i)     development of fields categorized as Tight Gas (reservoirs with soils where the commercial production is only possible through the use of advanced technologies); or

(ii)    concessions that due to the depletion of the existing reservoirs at that time, had neither delivered natural gas for marketing, nor utilized gas produced in that field for power generation “in wellhead” for its marketing as from January 1, 2004 to the date the Program had come into force; or

(iii)    development of "New Fields", showing positive results after the Program was established, with original static pressures of the reservoir and that, as a consequence, had not had any commercial production up to date.