Brazil’s Mines & Energy Ministry is expected to approve a batch of new regulations next week intended to facilitate the opening of the country's downstream sector and support the diversification toward cleaner fuels.

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Addressing a digital panel on Brazil's downstream sector as part the Rio Oil & Gas 2020 event, Brazil Secretary for Oil, Gas & Biofuels, Jose Mauro Coelho, said the ministry’s policy committee, CNPE, has scheduled a series of measures for approval next week, aiming to facilitate the sector’s ability to achieve an effective transition to an open and competitive downstream sector.

A monopolistic legacy means state-controlled oil and gas behemoth Petrobras currently accounts for more than 98% of installed refining capacity in Brazil, but has committed to sell eight of its 12 refineries, as well as selling its remaining stakes in the midstream and fuels distribution sectors.

More power to ANP

“The government will work to ensure that we do not lose the important monitoring roles and co-ordinating that was carried out by Petrobras," Coelho said.

"This market-wide role is no longer something that can be expected of Petrobras, and we plan to give the National Petroleum Agency (ANP) new powers in this sense to allow full monitoring of the sector in real time,” he added, referring to the market regulator.

Among the measures scheduled for CNPE approval next week are new transition rules to govern biodiesel, a sector which had previously fallen under the umbrella of a Petrobras-dominated refining system, Coelho said.

“The commercialisation of biodiesel needs to change as refineries change hands," he said.

The CNPE will also set up a new working group to plan the wider expansion of biofuels in the Brazilian energy, according to Coelho.

Brazil a different market

“Brazil has important competitive differentials in comparison to other biofuels countries. We have seen this with ethanol and we are seeing it with biodiesel, and now there is a whole new discussion on new biofuels,” he said.

CNPE also scheduled to approve a new framework to underpin supply and marketing of liquid petroleum gas, which serves a pivotal role in the Brazilian residential sector.

Petrobras will concentrate its remaining downstream assets in Brazil’s south-east, and will focus on providing the most competitive option for its customers, according to Claudio Mastella, executive manager for commercialisation.

“This means adapting in areas such as data tools, transparency and retraining,” he said on the same panel.

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Petrobras has also been developing its own cleaner fuels, including renewable HVO diesel and biokerosene, and committed to continued investments in these products in its new business plan announced this week.

“There are still regulatory questions to be concluded for the viability of these products, but we hope this will be soon,” Mastella said.