Oil and Gas Agency’s R&D&I compliance requirements demand attention

Investments in R&D&I require a detailed breakdown of eligible expenses in accordance with the legislation

By Alessandro Barreto

The oil and gas industry plays a pivotal role in the Brazilian economy, serving as a major source of revenue and job creation. In acknowledging its importance, the National Agency for Petroleum, Natural Gas and Biofuels (ANP) promotes scientific and technological advancements within this segment for the greater benefit of the domestic market.

One key practice adopted by the agency is the enforcement of a research, development, and innovation (R&D&I) clause in contracts for oil and natural gas exploration and production. As a result, oil companies are required to invest a percentage of their gross revenue into activities aligned with this purpose, as follows:

To illustrate, from 2019 to 2023, more than BRL 14 billion in investments were allocated to R&D&I in Brazil, according to ANP data.

Reporting to the ANP

Providing proof of R&D&I investments to the regulatory agency requires meticulous scrutiny and attention to detail. Technical and financial information must be accurate, comprehensive, and submitted within the deadlines established by ANP Resolution 918/2023. 

Complying with these rules not only ensures regulatory adherence but also demonstrates the company's commitment to transparency and excellence in its research and innovation activities.

Requirements set out in ANP Resolution 918/2023

This regulation outlines the responsibilities of oil companies regarding the submission of information on R&D&I projects. The primary documents required include:

Allocation of resources

The allocation of resources in R&D&I programs must observe specific distribution percentages, considering the type of project or program operator.

Amounts are tied to the type of contract and relevant amendments. In the case of a consortium, each member's annual obligation is proportional to their participation in the contract.

Technical standards and legal compliance

The ANP requires reporting documents to be prepared using its specified forms and submitted through a designated system. Additionally, the agency may request supplementary documentation and carry out accounting and financial audits to check the accuracy of all data supplied.

DPC has supported oil and gas clients by examining documents and receipts that provide proof of all expenditures, ensuring compliance with legal requirements. This includes costs for purchasing materials and equipment, employee compensation, daily allowances and travel expenses, imports, and taxes, and more. This results in a final report that informs the client of any breaches, points to be remedied and best practices.

This review simplifies the preparation of reports for ANP compliance. It also provides an opportunity for corrections and adjustments during the execution of the R&D&I project, i.e., before the information is submitted to the regulatory agency, thus avoiding eventual complications.

Consequences of non-compliance

Failure to comply with the rules can result in the disallowance of expenses with regard to the R&D&I clause. The legislation also provides for administrative sanctions in some cases, such as the registration of the corresponding debt as an overdue federal tax liability.

Industry expertise

With extensive experience in accounting, tax, and labor support for the oil and gas industry, DPC assists in the assessment and verification of expenses eligible for R&D&I arrangements, helping companies achieve compliance with ANP regulations. Talk to one of our experts at: dpc@dpc.com.br.