Argentina has established a long-term state policy for energy development, which encourages the use of non-fossil fuels suitable for environmental protection and economic sustainability. In pursuance of this goal, the Ministry of Energy and Mining launched a set of tender proceedings for the procurement of electrical energy from renewable sources. Following the success of Rounds 1 and 1.5, Round 2 was recently published with the aim of adding 1,200 megawatts of renewable energy to the interface system.
In order to unify various national regulations, the National Congress is analysing the Bill for the Promotion of Distributed Energy Generation from Renewable Sources. The bill's main aims are to unify inconsistent provincial laws in order to reduce local bureaucratic red tape, combine technical and security standards, simplify permit requirements and reduce lengthy review procedures in order to ensure timely installation and avoid added costs.
The national and provincial governments recently signed the Federal Energy Agreement. The agreement aims to develop and foster the implementation of energy policies at the provincial and federal level. The cooperation of the national and provincial governments is key to a long-term energy policy. The regulatory framework introduced for the different jurisdictions will ensure quality of service and help to develop the national energy network.
The government has amended the Renewable Energy Act and issued a regulatory decree, which includes new promotional schemes to foster investment in renewable energy projects and reduce Argentina's dependency on fossil fuels. This update examines the decree, the benefits granted by the federal government in that regard and the terms and conditions of the first renewable energy project contest due to be launched by the Ministry of Energy.
The recently elected government hopes to tackle the energy deficit and reduce the impact of subsidies on the public budget. In that regard, the Energy and Mining Ministry aims to suspend the government's utility bill subsidy system, include renewable energy in the energy matrix to reduce dependence on hydrocarbons, develop nuclear energy and increase domestic production of hydrocarbons through foreign investment.
The new government recently presented its government programme, which sets out its framework and indicates the legislative projects that it intends to implement over the coming five years. As part of the programme, the government hopes to have 100% of the national electricity supply come from renewable sources by 2030. However, as there are no details on how this goal will be achieved, it remains to be seen what changes the energy sector will face.
E-Control recently published a draft of the amendment of the Gas Market Model Ordinance 2017. The envisaged amendment – and especially the newly implemented capacity conversion service – resolves the capacity mismatch issue by compensating network users for the economic disadvantages that arise from having to buy double capacity due to the bundling regime at interconnection points.
After four months of negotiations, the Austrian National Council has finally reached an agreement on the amendment of the Green Electricity Act. The required two-thirds majority was reached by a last-minute agreement between the coalition parties and the Green Party. The aim of the new legislation is to increase the percentage of green electricity and expand renewable energy in Austria.
Following an Agency for the Cooperation of Energy Regulators decision which foresees a split of the Austrian-German electricity market, the Austrian National Regulatory Authority, E-Control and the Austrian transmission system operators have announced that they plan to exhaust all legal possibilities in order to appeal the decision.
Although the long-awaited proposal to amend the Green Electricity Act was recently published, those who expected it to expand renewable energy in Austria will be disappointed and must patiently await the envisaged expansive amendment to the act. That said, the amendment package has brought some hope for new investments.
The Brazilian National Agency of Petroleum, Natural Gas and Biofuels recently published Notice of Public Consultation and Public Hearing 20 in order to collect input regarding the new rule which will increase the flexibility of the local content rules provided for in concession contracts entered into between the seventh and 13th bidding round for onerous assignment, as well as the first production sharing bidding round of the exploration of oil and natural gas blocks.
The initial expectation from some market analysts with respect to the outcome of Brazil's 14th bidding round was conservative, with Brazil's political turmoil and the downturn in the oil and gas sector clearly inciting this uncertainty. However, it seems that the government's initiative to extend the special customs regime for the import of rigs, vessels and equipment until 2040, as well as its adjustment of the rules in relation to local content requirements, ensured the round's success.
A recent decision rendered by the Brasilia Federal Court of Appeals suspended one of the most anticipated Petrobras international tenders for the charter and operation of a floating production, storage and offloading unit in the Libra field, the largest oil field in the pre-salt region. The suspension will remain in effect until the Brazilian National Agency of Petroleum, Natural Gas and Biofuels rules on Petrobras's local content waiver request.
President Michel Temer recently enacted Law 13.365/2016. The law makes the participation of Petrobras as the exclusive pre-salt operator optional, while setting out Petrobras's pre-emptive right. With the enactment of the new law, the Brazilian government is preparing to conduct the second production sharing round, which will offer four pre-salt areas, in the second half of 2017.
As of May 2016 Rio de Janeiro has begun to levy a new state environmental control and inspection tax on the control, monitoring and supervision of research, mining, exploration and production of oil and gas. All legal entities authorised to conduct such activities are subject to the tax.
Under the existing legal framework, the state owns all mineral resources in China and the allocation of mining rights is heavily regulated. However, the various courts have different understandings of the relevant laws and regulations and judgment criteria for mining right disputes vary from court to court. As such, the Supreme People's Court recently issued an interpretation on the application of law in hearing cases involving mining right disputes.
The Ministry of Land and Resources (MLR) recently announced the Mineral Rights Granting System Reform Programme, which aims to promote the competitive granting of all types of mineral right in China. The programme requires the competent authorities to implement tender, auction and listing methods to grant mineral rights and imposes strict restrictions on the granting of mineral rights via agreements. It also requires the MLR to delegate its mineral rights approval powers to lower-level departments.
The Communist Party Central Committee and the State Council recently issued the Opinions on Deepening the Reform of the Petroleum and Natural Gas Sector. While the market-oriented reform of the entire oil and gas industrial chain includes no surprises, the opinions reflect the government's strong intentions behind the reform and send a positive signal to investors. However, the reform will not be an overnight success and significant resistance will be encountered.
The State Council recently promulgated the Plan for Mineral Resources Ownership Benefit System Reform with a view to transforming China's fiscal regime for the grant of mineral resources rights in an upcoming reform of the oil and gas upstream sector. The plan's primary purpose is to streamline the tax and fees system in China's mineral resources sector.
New guidelines on the regime for the use of natural resources with compensation were recently introduced. The guidelines are the first major document issued by the government to establish a full-scale regulatory system for the use of different kinds of natural resource with compensation. They provide a fundamental policy basis for establishing the system and will have a significant impact on the legislation governing China's use of its natural resources.
The Krk liquefied natural gas terminal project changed course when the government decided to construct a floating terminal instead of the initially planned land-based terminal. The reason for this decision was to make the terminal operationally faster and reduce costs, since it was clear that the deadlines for making the land-based terminal operation were unattainable. Since the deadlines for building the terminal are short, LNG Croatia is simultaneously undertaking several activities in order to meet them.
As part of its goals, the Act on Amendments to the Gas Market Act sets out a new gas market model. Under the new gas model, on receiving a proposal from the ministry and following approval from the Gas Regulatory Agency, the government will set the maximum price for gas, according to which the wholesale supplier must sell gas to retail suppliers for households. It remains to be seen how this new gas market model will affect consumers, the economy and the overall gas market.
The relationship between INA (the national oil and gas company) and MOL (Hungarian Oil and Gas Plc) goes back to 2003, when INA was privatised through a public procurement process. However, the Croatian government and MOL are in two international disputes over INA. Following a recent decision, the prime minister announced that the government will initiate the process to buy-out MOL's shares in INA.
Recent initiatives in the Croatian energy sector include the construction of the largest solar-powered irrigation system in Europe, which is already proving to be an ideal solution to water management in agriculture. Further, the government recently announced its plan to increase the renewable energy sources incentive fee. As a countermeasure, the government lowered the value added tax rate for electricity supply from 25% to 13%.
Participating countries at the recent Dubrovnik forum signed the Statement on the Three Seas Initiative, with the aim of connecting the north-south gas corridor, reviving cooperation between Adriatic, Baltic and Black Sea countries and unifying the European energy market. One of the initiative's key projects is the liquefied natural gas terminal on Krk Island in Croatia, which will be the backbone of the new gas corridor to the Baltics.