ANH establishes rules for delivery of gas-leak baseline and leaks detection and repair program
Last August 12, the National Hydrocarbons Agency (“ANH“) issued Resolution No. 948 of 2022 (the “Resolution 948“), which adopts the guidelines that operators in charge of hydrocarbon exploration and exploitation activities must follow to submit to the ANH: (i) the Program for Detection and Repair of Natural Gas Leaks (the “PDRF“) and (ii) the Emissions Baseline necessary for the quantification of these leaks (the “Baseline“).
Both instruments had been established by Resolution 40066 of 2022 (the “Resolution 40066“), issued by the Ministry of Mines and Energy last February with the purpose of establishing technical parameters for: (i) the detection and repair of natural gas leaks and (ii) their use to “reasonably avoid flaring and venting during hydrocarbon exploration activities”.
These measures are derived from the emission limits established in the Climate Change Management Plan for the mining-energy sector, as well as from the prohibition of natural gas waste and the consequent obligations that operators have for its use -included in Resolution 40066-.
Based on the above, the technical annex of Resolution 948 establishes that, for the establishment of the Baseline, it will be necessary for the operators to carry out, for each facility or productive installation, a direct quantification of the natural gas leaks that “are generated or presented by the Equipment including its Components, as well as in the Well Operations”.
The detection and quantification of these leaks, establishes Resolution 948, must be carried out by the operators “in accordance with Reference Method 21 of the Environmental Protection Agency of the United States of America”, initially, or through other technical means previously approved by the ANH in accordance with the provisions of Resolution 948.
Additionally, the Resolution clarifies that the following will not be part of this Baseline, provided that they are natural gas leaks derived from:
- The production tests of wells of both oil and associated gas, as well as non-associated gas.
- The completion of wells; and the discharge of liquids in exploratory and exploitation wells.
- Pilot well testing, well stimulation including hydraulic stimulation and flowback injection, well service, well abandonment and well workover activities.
However, these leaks excepted from the Baseline shall, in any case, be reported in the PDRF and in the annual program compliance report.
The document that establishes the Baseline must contain, among other information, general information about the operator and the productive facilities or installations, as well as an inventory of the equipment and components susceptible to leakage.
The operators must deliver to the ANH the Baseline within thirty (30) days after its preparation, which must be given in the following terms:
- For new productive facilities or installations, within twelve (12) months after their start of operations.
- For existing productive facilities or installations, within twenty-four (24) months after Resolution 40066 becomes effective. That is, before February 14, 2024.
Regarding the PDRF, Resolution 948 establishes that the operators will prepare it, based on the Baseline, in order to establish an action plan for the identification of the detected leaks, complemented with a schedule of activities for their detection and repair for annual periods.
This program shall include at least two (2) inspections per year by the operator, verifying the implementation of the proposed activities, based on the criteria established in this regulation.
The PDRF must be delivered by the operators sixty (60) days after the delivery of the Baseline, and be updated annually, through the channels and means indicated by the ANH. In turn, the operator must update the Baseline every three (3) years.
Both documents (Baseline and PDRF) must be certified and signed by a petroleum engineer with a valid professional license, prior to their delivery to the ANH. Likewise, the operator must inform the ANH the persons responsible for the PDRF in each facility of the exploration or exploitation areas.
Failure to comply with this obligation may imply, for the operators, the imposition of penalties, especially those provided in the Petroleum Code, consisting of fines ranging from two thousand (2,000) to one hundred thousand (100,000) legal monthly minimum wages in force.
For further information in connection with this issue, please contact:
Álvaro José Rodríguez
alvaro.rodriguez@phrlegal.com
Mariana Sánchez
mariana.sanchez@phrlegal.com
