The regulatory framework governing any given country’s exploration and production can make all the difference between a boom or bust oil and gas sector, especially in the low-price conditions of recent years, regardless of what riches are available beneath the earth.
That’s why communication and cooperation between producers and policymakers is so important, and that’s why the offerings at the upcoming AAPG/SEG International Conference and Exhibition (ICE) in Cancun, Mexico should be of such vital interest to geologists.
“It is very important for explorers to have a two-way dialogue with regulatory agencies to jointly understand what makes projects viable, especially in frontier areas and in a low oil price environment,” said Victor Vega, ICE general vice-chair and AAPG Latin America and Caribbean Region president. “It is also interesting to bring regulatory agencies, national oil companies and private companies together to understand the challenges and opportunities in the region and not just from a technical perspective but also from a business point of view.”
Along with the high quality technical program available at ICE, there will also be a series of special sessions offering insight into business, political and administrative factors affecting geoscientists and industry.
One such session is the Regulators Forum, “Regulatory Challenges for Unconventional and Deepwater Exploration and Production Activities,” to be held Sept. 6, just prior to the ICE Opening Ceremony.
The Forum will feature regulatory agency leaders from Mexico, Colombia, Brazil and the United States, who will describe how their agencies’ regulatory frameworks are designed to promote sustainable and efficient exploration and production activities.
Panelists will discuss regulatory challenges associated with the development of unconventional resources and offshore fields and examine how lessons learned in the United States and Canada can apply to activities in Latin America and the Caribbean.
Vega organized AAPG’s first Regulators Forum while serving as general chair of ICE in Cartagena, Colombia in 2013.
“The feedback we received from the Forum was very positive because people had the opportunity to ask questions and interact with regulatory agencies and highlight some of the challenges and potential solutions,” he said. “For the regulatory agencies, it was also an opportunity to interact with other countries to gather key learnings and to share experiences.”
Vega will co-chair the Regulators Forum with Hector de Santa Ana, manager of exploration and production at the Uruguay’s National Combustible, Alcohol and Portland Administration (ANCAP).
Diverse Perspectives
De Santa Ana has the unique perspective of working as a regulator and an operator simultaneously. ANCAP is a regulatory agency inside Uruguay, supervising offshore exploration activities and promoting new opportunities in the country’s frontier basins.
Outside Uruguay, the agency is known through its subsidiary Petrouruguay, an oil company working with partners to produce gas and condensates in the Neuquén Basin in Argentina and developing a mature fields production project in Venezuela’s Orinoco Belt.
A 37-year veteran of ANCAP, de Santa Ana said he has seen regulatory agencies’ roles change over time.
“I think that today’s role of the regulatory agencies in our region is very different than 10 years ago,” he said. “Fundamentally, their most important is to generate synergy with oil companies, to promote opportunities and to provide knowledge of resources and tools available in their countries.”
He added that today’s regulatory agencies are accustomed to facing both difficult and favorable circumstances.
“One of the biggest challenges for regulatory agencies is to adjust their performance and way of thinking to current industry times without losing their sovereignty,” he said. “The biggest opportunities are associated with underexplored and frontier basins, as well as fair contract terms and attractive conditions across Latin America and the Caribbean.”
Expectations for the Forum
De Santa Ana said the ICE Regulators Forum will give representatives from operators and service companies the chance to connect with the leaders of the regions’ regulatory agencies and to learn first-hand about opportunities and challenges in the countries they represent.
He noted that international operators coming to work in Latin America should be aware of the geological risks associated with the different basins, as well as the logistical, operational and legal challenges of the region.
“They also should know the cultural characteristics of our countries,” he said.
He expects the Forum to benefit regulatory agencies as well.
“Basically this Forum will help regulatory agencies by sharing ideas, common experiences and comparing realities,” he said. “This will encourage regulatory agencies to emulate good practices and adopt new strategies.”
Further Discussions
Forum participants will meet with other agencies at a private regulatory agency meeting held in Cancun the day before ICE. De Santa Ana will facilitate the meeting, which will allow industry players from the region to speak freely and to share best practices and lessons learned.
“The purpose of the Regional Regulatory Agency Meeting is to discuss regional challenges, opportunities and best practices and to strengthen partnerships that will enable our respective agencies to operate more efficiently and effectively,” he said. “We hope they go home with new ideas, a common vision and a network of contacts between agencies that enable us to strengthen our bonds.”
Strategies for Success
De Santa Ana said he hopes both the forum and the meeting will help participants to promote a common vision of the future, to integrate ideas and to share strategies for being competitive during difficult times.
“I hope to learn a lot,” he said. “You learn more in a day of crisis than in 10 years of economic bonanza.”
Confirmed speakers at the ICE Regulators Forum include:
- Juan Carlos Zepeda, President Commissioner, National Hydrocarbons Commission (CNH), Mexico
- Orlando Velandia, President, National Hydrocarbon Agency (ANH), Colombia
- Magda Chambriard, General Director, National Petroleum Agency (ANP), Brazil
- Michael Celata, Bureau of Ocean Energy Management (BOEM), United States
For information about the Forum and about ICE, visit ICE.AAPG.org.