ANP Director Defends Natural Gas Agenda and Criticizes Political Pressure
Progress in regulating Brazil’s natural gas market faces resistance, but the National Agency of Petroleum, Natural Gas and Biofuels (ANP) will not yield to undue pressure, according to agency director Pietro Mendes. He emphasized that the regulator has a duty to foster market opening and competitiveness across the sector, even in the face of criticism and opposing pushback.
The statement comes amid behind-the-scenes maneuvering, with Petrobras showing strong opposition to the ongoing regulatory agenda. The state-controlled company has sought to influence decisions at senior levels of government, aiming to slow down or halt measures that promote market deconcentration, such as the “gas release” program and regulated access to essential infrastructure.
Defense of Regulatory Authority
Pietro Mendes expressed frustration over what he called “Manichean arguments” and attempts to curtail the agency’s autonomy. He highlighted the vital role played by ANP’s technical staff and economists, who are committed to improving the market for public benefit, and described external pressures as a difficult challenge to navigate. His remarks were delivered during an ANP workshop focused on the market deconcentration proposal.
The director stressed that the natural gas agenda cannot be “indefinitely delayed.” Mendes questioned the logic behind requests to postpone discussions and public hearings, arguing that the regulatory uncertainty created by such delays undermines investment planning and the overall development of the market.
Impact of Regulation and Public Policy
While the ANP has faced accusations of overstepping its authority, Mendes pushed back, stating that the agency’s actions align with the 2021 Gas Law and the public policies established by the National Energy Policy Council (CNPE). He noted that the CNPE involved multiple federal government entities when approving the guidelines, validating the ANP’s regulatory stewardship.
Regulating third-party access to gas transportation and processing infrastructure, for instance, has created discomfort among asset owners who previously held unchecked control over access and pricing. Mendes acknowledged this pushback, but reiterated that Brazil’s Constitution establishes the State’s role as regulator, and managing such pressures is an inherent part of the agency’s mandate.
Gas Prices and Market Outlook
The ANP director also addressed high natural gas prices in the domestic market. He argued that Brazil should not simply accept this reality, questioning assertions that elevated costs stem from ultra-deepwater offshore production. Mendes pointed out that domestic prices have historically tracked the international liquefied natural gas (LNG) market.
Conversely, Petrobras, represented by Executive Gas and Power Manager Álvaro Tupiassú, urged caution. The company argued that the Brazilian market does not currently require a “gas release” program and requested more time for discussion. The state-run company also raised concerns over the potential future extension of “gas release” mandates to equity gas and questioned the regulatory procedure adopted by the ANP, suggesting that prior consultation with the company would have been more appropriate. Tupiassú added that the economic viability of major gas projects depends on offtake commitments from partners—a role he noted Petrobras has historically fulfilled to bring production online.
