Country
Assessment
Until mid-2020, the Agency for the Regulation and Control of Hydrocarbons (Agencia de Regulación y Control Hidrocarburifero) regulated the exploration, exploitation, industrialization, refining, transport, and commercialization of hydrocarbons. In 2020, it merged with the regulators overseeing the mining and electricity sectors to create the Agency for the Regulation and Control of Energy and Nonrenewable Natural Resources (Agencia de Regulación y Control de Energía y Recursos Naturales no Renovables [ARC]). This merger of regulatory agencies aligns with the merger of ministries to create the MEM. The ARC assumed the responsibilities, obligations, and practices of the Agency for the Regulation and Control of Hydrocarbons. Articles 3, 6, and 11 of Ministerial Agreement MEM-MEM-2022-0047-AM, 2022 , confirm that the MEM is the ultimate regulator, but that the ARC will be responsible for ensuring compliance with sector reporting and consultation requirements. Petroecuador is the only entity authorized to buy and sell oil, gas, and refined products. It is also responsible for most of the oil and gas production in Ecuador. The company is also tasked with negotiating and signing contracts with other companies on behalf of the government. The Ministry of Environment oversees some special provisions under its jurisdiction, in its role of monitoring and auditing the environmental management of all industrial activity. The Undersecretariat of Climate Change serves as the coordinating and facilitating unit for climate finance.
The Ministry of Petroleum and Mineral Resources plays an overarching regulatory role in the oil and gas sector. Although there is no specific reference to flaring or venting in PSCs, contractors and operators are subject to Law 4 and the associated regulations. The ministry often acts through the EGPC, EGAS, and the Ganoub El Wadi Petroleum Holding as joint venture partners with companies investing in Egyptian upstream assets. The EEAA is part of the Ministry of Environment and is the environmental regulator responsible for conducting an environmental impact assessment of new upstream oil and gas projects, and monitoring emissions from combustion.
Article 4, Paragraph 1, and Article 30, Paragraph 1, of the 2021 proposal stipulate that national governments are responsible for key implementation provisions such as the appointment of a regulator, or multiple regulators (referred to as “competent authorities”). Article 9 allows independent verifiers to carry out the activities required under this regulation.
Article 16 of Law No. 002/2019 refers to an institutional structure composed of the Ministry of Petroleum, Gas, Hydrocarbons, and Mines (Ministère du Pétrole, du Gaz, des Hydrocarbures et des Mines [MPGHM]), a regulatory authority, a national operator, and advisory bodies: Article 17 states that the ministry in charge of hydrocarbons (MPGHM) is the competent authority ensuring implementation of the government’s policy on the upstream and downstream oil and gas industry. Article 18 states that the application of the regulations governing the upstream, midstream, and downstream oil and gas sectors is to be carried out by the ministry department in charge of hydrocarbons, currently the General Directorate of Hydrocarbons (Direction Generale des Hydrocarbures [DGH]). Article 28 defines the responsibilities of an independent administrative authority in the oil and gas sector (responsibilities currently with DGH), which include the following: guaranteeing free competition in the oil and gas sector, per the Central African Economic and Monetary Community (Communauté Économique et Monétaire de l’Afrique Centrale) code on anti-corruption contributing to the development of technical specifications in the oil and gas sector and ensuring operators’ compliance with technical, quality, hygiene, health, and environmental specifications, as defined in the legislation guaranteeing pricing transparency and nondiscriminatory third-party access to essential infrastructure. Article 27 reiterates the right of the National Hydrocarbons Company (Société Nationale des Hydrocarbures) to participate in exploiting, marketing, and distributing hydrocarbons and their associated products. Founded in 2011, the National Hydrocarbons Company—also known as the Gabon Oil Company—reports to the President’s Office and is under the technical supervision of the MPGHM and the financial supervision of the Ministry of Economy. The new law no longer expressly refers to this company as the national operator. The Gabon Oil Company is defined only as an operator whose capital is held exclusively by the state. Its functions include the following: holding the government’s interests in national hydrocarbon resources and shares in private companies investing on behalf of the state (alone or in joint ventures with private companies) in upstream or downstream oil and gas projects undertaking any activity in the oil and gas supply chain, with the same rights and obligations as any other operator entering into agreements with the state, in the same way as private companies, to operate new gas-processing facilities and pipeline infrastructure, potentially in a joint venture with private operators.
Articles 1 and 16 of ESDM 17/2021 assign overall responsibility and approval powers for flaring permission and reporting activities to the ESDM and DG Migas. According to Article 1(20) (also, Article 1[11] of ESDM 30/2021; see footnote 7]), a special work unit (Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi [SKK Migas]) is responsible for managing upstream oil and gas activities under the guidance and supervision of the ESDM. According to Article 1(21)—and also, Article 1(12) of ESDM 30/2021—Aceh Oil and Gas Management Agency (Badan Pengelola Migas Aceh [BPMA]) has joint responsibility for managing upstream oil and gas activities in the Aceh territory, including within 12 nautical miles of coastal waters.
The Ministry of Energy is the “authorized body” (regulator) of hydrocarbons. The Ministry’s Department of State Control in the Sphere of Hydrocarbons and Subsoil Use (DSCHS) regulates flaring. The Ministry of Ecology, Geology, and Natural Resources (MEGNR) is the environmental regulator and has jurisdiction over flaring emissions. Territorial divisions of MEGNR and local executive bodies play roles in implementing environmental regulations.
The formation of a new government in early 2021 has affected the various regulators responsible for gas flaring and venting. The establishment of the Ministry of Oil and Gas and the Ministry of the Environment is likely to be relevant to flaring and venting. At the time of writing, not all changes had been fully implemented. The information provided in this and the next sections is therefore subject to change. Within the oil and gas sector, responsibilities are clearly allocated to the minister of oil and gas, who oversees the Petroleum Committee. The ministry also influences the Management Committees supervising the PSCs, given its authority over NOCORP, which sends members to the Management Committee and also chairs it. The Environmental General Authority was established as an independent and autonomous institution with its functions and responsibilities laid out in the Environment Law, 2003 . Following recent changes in the government, the Ministry of the Environment was established. It has assumed responsibility for, and control of, the Environmental General Authority.
The Petroleum Development Act, 1974 , vests the powers and responsibilities over hydrocarbon resources in Petronas. Petronas is under the control and direction of the prime minister (Section 3 of the Petroleum Development Act, 1974). The prime minister also has the power to make regulations relating to the exploration and exploitation of hydrocarbons (Section 7), which he or she may delegate (Section 7A). The Malaysia Petroleum Management (MPM) within Petronas carries out the regulatory responsibilities assigned to Petronas, making it the upstream regulator in Malaysia. Based on the Environmental Quality Act, 1974 , the minister of environment and water is responsible for managing the environment and limiting waste, emissions, and other environmentally adverse factors. In line with Section 3, he or she appoints the director-general of environmental quality, who administers the provisions of the Environmental Quality Act, 1974; the Environmental Quality (Clean Air) Regulation, 2014 ; and other laws and regulations. On issues such as emissions management, the responsible Petronas department (MPM for upstream activities and the health, safety, environment department for activities covering all business lines) typically liaises with the director-general of environmental quality.
Article 3 of the Law of the National Hydrocarbon Commission establishes the CNH as the regulator of oil and gas exploration and production. The CNH is under the Secretariat of Energy (Secretaría de Energía [SENER]). The CNH’s responsibilities include regulating the use of associated natural gas and defining technical and operational standards to maximize the recovery and the value of hydrocarbons in the long term while ensuring the minimization of gas flaring and venting. ASEA, which reports to SEMARNAT, oversees the oil and gas sector’s industrial safety, operational safety, and environmental protection.
The Petroleum Industry Act assigns significant regulatory powers to the Commission and the Authority. The Commission has regulatory authority over gas flaring and venting in upstream oil and gas production. The Authority regulates activities midstream and downstream of oil and gas production, including flared or vented gas. The Federal Environmental Protection Agency regulates air quality and other environmental emissions, including in the oil and gas industry. The National Environmental Standard and the Regulations Enforcement Agency ensure compliance with international treaties in the oil and gas sector.