On 23 June 2022, the National Hydrocarbons Commission (“CNH”) published in the Federal Register the “ORDER CNH.E.50.2021 through which various articles, as well as the Annexes I and II of the Technical Provisions for the Use of Associated Natural Gas, in the Exploration and Extraction of Hydrocarbons are modified, added and repealed” (the “Order”).
The official text of the Order is available here.
The Order introduces interesting and important changes to the Technical Provisions for the Use of Associated Natural Gas, in the Exploration and Extraction of Hydrocarbons (the “Technical Provisions”) that were originally published in the Federal Register on January 7, 2016, and its only amendment published in such official register on March 10, 2020.
The amendments to the Technical Provisions can be summarized as follows:
(1) The Appraisal Programs, Pilot Programs and Transition Programs are included within the scope of the Technical Provisions. In this sense, the submission of the associated natural gas use programs will be a requirement for the submission and approval of the previously mentioned programs;
(3) It is clarified that only the Controlled Destruction of associated natural gas may be authorized as part of the Technical Provisions, leaving its simple Destruction outside the Use Programs;
(4) The minimum content of the Use Program proposed by a Petroleum Operator is expanded;
(5) Certain requirements to present monthly information are removed;
(6) The following provisions are deleted: (i) the notice of possible non-compliance with the use programs and use goals; and (ii) the implementation of unscheduled actions to use the associated natural gas; and
(7) Various consistency changes are made for a better reading of the Technical Provisions and their homologation with various regulations that were recently amended by the CNH or are in the process of being amended by the CNH (e.g., the Guidelines for Plans).
The Order (i.e., the amendment to the Technical Provisions) will be effective as of 24 June 2022.
Any procedure initiated before the effective date of the Order, will be completed pursuant to the Technical Provisions that were in effect at the commencement of the procedure.
Approved in the meeting of CNH’ Governing Body held on July 22, 2021.
In this regard, we suggest reviewing the amendment to the Guidelines that regulate the Exploration and Development Plans for the Extraction of Hydrocarbons, and by virtue of which additional programs are added or clarified. Here you can find a brief note about it.
If you have any questions or comments regarding the content of the Order, please do not hesitate to contact us.
This document does not constitute legal advice.
