Offshore Oil & Gas Decommissioning - Brazil

The regulation of offshore oil and gas decommissioning in Brazil is shared among four main authorities —National Agency of Petroleum, Natural Gas and Biofuels (ANP), Brazilian Institute of Environment and Renewable Natural Resources (IBAMA), Brazilian Navy/Directorate of Ports and Coasts (DPC), and National Nuclear Energy Commission (CNEN)— each exercising distinct but complementary roles in the approval, supervision, and monitoring of decommissioning projects.

• ANP

The ANP is the central regulatory body responsible for the technical, contractual, and operational aspects of decommissioning. It analyses and approves the Conceptual and Executive Deactivation Plans (Plano de Desativação de Instalações – PDI) submitted by concessionaires, in accordance with ANP Resolution No. 817/2020 and its Technical Note No. 31/2021/SSM/ANP-RJ-e. ANP verifies that the operator’s proposed activities comply with contractual obligations, safety and environmental requirements, and the approved schedule and budget. It also reviews the Decommissioning Report (Relatório de Descomissionamento de Instalações – RDI), ensures compliance with the approved plan, and, where necessary, executes the financial guarantees required under ANP Resolution No. 854/2021 and Article 41-A of Decree No. 2,705/1998. 1

• IBAMA

IBAMA is the authority responsible for environmental licensing, approval, and supervision of decommissioning activities. It evaluates the environmental components of the PDI — including waste and effluent management, risk assessment, and biodiversity protection. 2  IBAMA also approves and monitors post-decommissioning environmental monitoring programmes, overseeing the execution of measures to ensure seabed restoration and environmental recovery. The State Environmental Agencies (OEMAs) act in coordination with IBAMA when the activities fall under their regional jurisdiction.

• The Brazilian Navy and the DPC

The Brazilian Navy, through the DPC, is responsible for navigational safety and maritime security. It ensures that structures to be decommissioned, partially removed, or left in situ do not interfere with navigation or marine safety. These functions are regulated through the Maritime Authority Standards (NORMAM), 3  which govern the marking, removal, and clearance of offshore facilities and debris, as well as the maintenance of navigational aids and hydrographic surveys after decommissioning.

• CNEN

Finally, CNEN is the authority competent for radiological safety and control of naturally occurring radioactive materials (NORM) that may be found in scale, sludge, or other residues during decommissioning operations. CNEN issues technical regulations and authorisations for the management, treatment, and disposal of radioactive waste, ensuring that decommissioning activities comply with national nuclear safety standards and radiological protection requirements.

Together, these four entities — ANP, IBAMA (and OEMAs), the Brazilian Navy (DPC), and CNEN — form a coordinated regulatory system that oversees offshore decommissioning in Brazil. ANP leads the technical and contractual oversight; IBAMA ensures environmental protection and monitoring; the Navy guarantees navigational safety; and CNEN supervises radiological control where applicable.

• The Petroleum Law

The principal legal framework governing offshore oil and gas decommissioning in Brazil derives from the Federal Constitution 4  and Law No. 9.478/1997 (the Petroleum Law), which establishes the national energy policy and the regime for the exploration and production of hydrocarbons.

Under the Petroleum Law, every Concession Agreement must include specific provisions on the return and vacation of areas, including the removal of equipment and installations and the reversion of assets to the Federal Government. Upon termination of the concession, the return of areas and reversion of assets must occur without any financial burden to the Federal Government or the ANP and no indemnity shall be payable to the concessionaire for wells, facilities, or other reversible assets, which automatically become the property of the Union and fall under ANP’s administration.

• Decommissioning

ANP Resolution No. 817/2020 is the main regulatory instrument governing decommissioning in Brazil. It establishes the requirements for the preparation and approval of a PDI which must cover all stages of the process—from the return of the concession area to ANP, through the deactivation and removal of installations, to the transfer or reversion of assets. The resolution prescribes technical, administrative, and environmental obligations, including the submission of studies, reports, and schedules, and ensures that operators meet deadlines and technical specifications defined by ANP.

• Financial Guarantees

Complementing these provisions, ANP Resolution No. 854/2021 regulates the procedures for presenting financial guarantees for decommissioning, which must secure sufficient financial resources to execute the approved PDI and ensure that decommissioning costs will be covered even in the event of insolvency or default by the operator.

• Maritime Safety and Compliance

The Brazilian Navy, through NORMAM, also plays an important role in ensuring maritime safety and compliance with international conventions. In particular, NORMAM-16/DPC stipulates that once an installation is removed from an offshore field and placed on a dry deck for dismantling, it is considered a “maritime work” and must comply with safety and signalling requirements. The Navy’s actions are aligned with the International Maritime Organization (IMO) framework and with the United Nations Convention on the Law of the Sea (UNCLOS), which establishes that decommissioned structures must preferably be removed to ensure navigational safety. 5  Where full removal is not technically feasible, structures left in place must be properly marked, with their location, dimensions, and depth duly communicated to the Navy for public notification.

• Environmental Compliance

The environmental dimension of decommissioning is supervised by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA), in coordination with the National Environment Council (CONAMA). The applicable environmental rules derive from CONAMA Resolutions No. 001/1986, No. 237/1997, and No. 350/2004, which govern environmental impact assessments, licensing procedures, and specific obligations for offshore installations.

Finally, the framework incorporates Brazil’s commitments under international environmental treaties, notably the MARPOL Convention and the International Convention on Oil Pollution Preparedness, Response and Co-operation (OPRC 1990), ratified in Brazil by Decree No. 2.508/1998. Collectively, these instruments require that decommissioning operations minimise environmental impact, ensure the safe handling and disposal of waste materials, and guarantee post-abandonment monitoring and public safety in marine areas.

Under Brazilian law, liability for the decommissioning process lies entirely with the concessionaire or production-sharing contractor, which remains fully responsible for the planning, execution, and post-decommissioning monitoring of offshore facilities. This obligation arises from the legal and contractual framework established by the Petroleum Law and the model concession contracts issued by the ANP.

• Petroleum Law

The Petroleum Law provides that, in the case of a consortium, each participant shall be “civilly liable for the acts of its agents and shall indemnify for any and all damages arising from the contracted exploration, development, and production activities, reimbursing ANP or the Federal Government for any losses incurred as a result of actions attributable to the concessionaire.” The same law also requires that every Concession Agreement include provisions governing the return and vacation of areas, the removal of equipment and installations, and the reversion of assets to the Federal Government, confirming that decommissioning and environmental restoration are inherent obligations of the operator and its co-venturers. Furthermore, the law establishes that, upon termination of the concession, the concessionaire shall, at its sole expense, remove any equipment and property not subject to reversion, repair or compensate for damages resulting from its activities, and carry out the environmental restoration measures determined by the competent authorities.

• Planning Stage

The planning stage is formalised through the PDI, regulated by ANP Resolution No. 817/2020. The concessionaire must prepare this plan and submit it to ANP for approval prior to the cessation of production. The PDI must include detailed technical procedures, risk analyses, cost estimates, schedules, waste management strategies, and environmental mitigation and recovery measures. Where decommissioning activities may generate significant environmental impacts, the PDI must also be submitted to IBAMA for environmental licensing, pursuant to CONAMA Resolutions No. 001/1986 and No. 237/1997.

• Execution Phase

The execution phase involves the implementation of the approved PDI under the supervision of ANP and the environmental authorities. The operator must remove or render safe all installations, plug and abandon wells, and restore the seabed and surrounding marine environment, in accordance with ANP Resolution No. 817/2020. To guarantee that sufficient funds are available for these activities, ANP Resolution No. 854/2021 requires the submission of a financial guarantee for decommissioning, which must also cover the costs of environmental monitoring. 6

• Post-decommissioning Monitoring

Regarding post-decommissioning monitoring, the responsibility for approving the monitoring plan and overseeing its implementation lies with IBAMA and, where applicable, the OEMAs. According to the ANP’s official guidance, the agency’s role in this phase is limited to ensuring compliance with the contractual commitments under the concession. The monitoring plan itself remains a legal and contractual obligation of the operator, and its associated financial guarantee must be included within the decommissioning guarantees required by ANP. The costs of executing monitoring activities must be borne by the operator, even if enforcement is necessary through judicial means.

Failure to implement the approved PDI or to comply with ANP’s technical and environmental requirements constitutes an administrative infraction. The Petroleum Law empowers ANP to impose administrative sanctions for violations of legal or contractual obligations, and provides for fines, in addition to warnings, suspension, or revocation of operational rights. Environmental breaches also attract liability under Law No. 9,605/1998 (Environmental Crimes Law), which establishes civil and criminal penalties for pollution, degradation, or negligent abandonment.

In essence, the Brazilian framework imposes joint and several liability on all consortium participants for decommissioning, including financial and environmental obligations. The concessionaire remains responsible from the planning of the PDI through the post-decommissioning phase, while ANP supervises contractual compliance and IBAMA and OEMAs oversee environmental performance and long-term monitoring.

Failure to comply with decommissioning duties, such as the submission or execution of the approved PDI, or non-observance of environmental, technical, or safety requirements, constitutes an administrative infraction under the Law No. 9,847/1999, which provides for sanctions applicable to concessionaires and operators. In this case, the ANP may impose penalties such as fines, as well as the suspension or revocation of the concession or authorisation. These sanctions apply cumulatively, depending on the seriousness of the infringement and the extent of damage caused.

The Petroleum Law establishes that concessionaires are civilly liable for all damages resulting from their operations, including environmental harm and costs associated with remediation and restoration. In addition, in cases of concession termination, the operator remains obliged to remove all non-reversible equipment, repair any damage, and carry out environmental recovery measures determined by competent authorities, at its sole expense.

Environmental infractions committed during or after decommissioning are also subject to the penalties under Law No. 9,605/1998, which include fines, suspension of activities, loss of tax incentives, and criminal liability for individuals and legal entities involved. Depending on the severity, offences may lead to imprisonment for responsible individuals and cumulative civil obligations for environmental compensation.

Furthermore, under ANP Resolution No. 854/2021, failure to maintain adequate financial guarantees to cover decommissioning obligations may trigger contractual enforcement by ANP, including the execution of the financial instrument.

Finally, IBAMA and the OEMAs may impose independent administrative fines and require the execution of corrective environmental programmes where non-compliance affects environmental quality. The Navy may also apply sanctions under maritime safety regulations if the operator fails to remove or properly signal decommissioned structures, jeopardising navigation safety. 7

Collectively, this framework ensures that asset owners remain fully responsible, administratively, civilly, and criminally, for compliance with decommissioning laws and for the safe and environmentally sound abandonment of offshore installations.

Under Brazilian law, there are no specific tax reliefs or fiscal incentives exclusively designed to offset or reimburse decommissioning costs in the oil and gas sector. However, such costs may be treated as deductible operational expenses for corporate income tax purposes, and their accounting and fiscal treatment are regulated under existing tax legislation applicable to the petroleum industry.

For projects developed under the Production Sharing Contract (PSC) regime, Law No. 12,351/2010 provides the legal basis for the possible recovery of decommissioning costs. That law defines “cost oil” as the share of production corresponding to the costs and investments incurred by the contractor in the exploration, evaluation, development, production, and deactivation of exploration and production facilities (desativação das instalações de exploração e produção). 8  This wording may allow decommissioning expenses to be treated as recoverable costs under certain circumstances, depending on the contractual terms and regulatory approvals. The extent to which such costs are recoverable is subject to interpretation and to confirmation by the competent authorities. Decree No. 9,041/2017, which regulates the implementation of PSCs, establishes the general framework for cost recovery procedures but does not expressly detail the treatment of decommissioning expenditures. In practice, the Pré-Sal Petróleo S.A. (PPSA) and the ANP are responsible for assessing and approving the classification of costs as recoverable, meaning that the inclusion of decommissioning expenses within the cost oil mechanism remains contingent on their approval and the specific conditions of each.

Under Brazilian law, joint and several liability applies to all members of a consortium for the performance of obligations arising from the concession or production-sharing contract.

Therefore, if one consortium member defaults on its decommissioning obligations, the other co-venturers remain jointly and severally responsible for completing the decommissioning activities and for covering all associated costs. This obligation continues until ANP confirms full contractual compliance and the environmental authorities issue final clearance.

Yes. Brazilian regulation expressly requires operators to provide financial security to guarantee the performance of decommissioning obligations.

This requirement is detailed in ANP Resolution No. 854/2021, which mandates that concessionaires, production-sharing contractors, and transfer-of-rights operators submit financial instruments sufficient to cover the total estimated cost of the approved PDI. The guarantee must remain valid until ANP confirms completion of the decommissioning and may also cover post-abandonment monitoring costs.

The range of acceptable financial instruments for meeting decommissioning obligations is defined in Article 2 of ANP Resolution No. 854/2021 and includes:

• Letter of Credit (Carta de Crédito Bancária);
• Performance Bond (Seguro-Garantia de Obrigações de Fazer);
• Escrow Account or Bank Deposit (Conta Vinculada);
• Parent Company Guarantee (Garantia Corporativa), subject to ANP’s financial evaluation; and
• Other instruments approved by ANP that provide equivalent assurance.

The value of the financial guarantee must correspond to the full estimated cost of decommissioning, based on the approved PDI, and be periodically updated.

Under ANP’s regulation, authorisation is required for any transfer of rights or interests under a concession. Until the transfer is formally approved, the assignor remains liable for all contractual and regulatory obligations, including decommissioning.

ANP Resolution No. 785/2019 governs assignment procedures and provides that both the assignor and assignee must demonstrate financial and technical capacity to meet decommissioning obligations. The liability for decommissioning costs incurred prior to approval of the transfer remains with the assignor, unless ANP expressly releases it.

In practice, decommissioning liabilities are typically allocated contractually between buyer and seller through indemnity and escrow arrangements.

• Scale and Financial Impact of Upcoming Decommissioning Projects

Brazil is entering an unprecedented phase of large-scale offshore decommissioning. According to recent projections published in 2024 by the ANP and independent research centres, investments exceeding BRL 27 billion are expected through 2025 for the removal or deactivation of mature offshore fields. This growing wave of end-of-life operations has placed financial and operational pressure on concessionaires to refine project planning, supply-chain logistics, and contracting models. Operators are increasingly engaging in early-stage decommissioning studies and cost-sharing mechanisms to manage escalating liabilities while maintaining compliance with ANP’s technical and financial-guarantee requirements.

• Adjustment of Operator Strategies and Budget Re-allocation

During 2024, Petrobras - Brazil’s largest offshore operator - announced a reduction of approximately US $1.1 billion in its 2025-2029 decommissioning budget, reflecting efforts to reprioritise investments amid cost inflation and regulatory complexity. The adjustment underscores a wider industry challenge: balancing environmental and safety obligations with capital-efficiency goals. It has reignited policy discussion on how Brazil’s fiscal and regulatory framework could better support predictable and financially sustainable decommissioning, including greater clarity on liability allocation, cost-recovery procedures, and project sequencing across different basins.

• Sustainability, Circular Economy and Supply-Chain Readiness

A parallel trend concerns the increasing focus on sustainable decommissioning and the circular economy. By the end of 2025, Brazil is projected to become one of the world’s largest offshore decommissioning markets, driving attention to the domestic capacity for recycling and re-use of materials, waste-management infrastructure, and port-yard readiness. Regulators and industry stakeholders are exploring ways to integrate environmental responsibility, resource recovery, and social value into decommissioning projects, consistent with Brazil’s commitments to energy transition and ESG standards. This evolution signifies a move from a purely compliance-driven approach to one that actively promotes innovation and sustainable industrial development within the decommissioning value chain.

The interplay between decommissioning of oil and gas assets and the transition to lower-carbon marine energy is gaining regulatory traction in Brazil. Following the enactment of Law No. 15.097/2025 (10 January 2025), which establishes a framework for the use of offshore assets of the Union for the generation of electricity from marine renewable sources, the strategic landscape has evolved. Whereas historically decommissioning in the petroleum domain followed a relatively linear removal and abandonment path, current policy increasingly contemplates the possibility of asset repurposing, extended life or coexistence with renewables infrastructure. In practice, this means that decommissioning plans may need to factor in reuse options, interactions with offshore wind, floating solar, or even carbon-capture and storage infrastructure. Operators may face new decisions around whether to fully remove installations, partly reuse structures, or defer removal pending transition-project deployment. Hence, the regulatory requirement to consider reuse, alongside the potential for integrated energy-transition infrastructure, is becoming a material part of decommissioning liability and strategy.