Brazil considers relaxing local content requirements for September oil rights auction

Brazil considers relaxing local content requirements for September oil rights auction

Brazil’s energy industry regulator is considering relaxing its strict local-content rules for companies bidding in the September auction of oil rights both offshore and onshore.

The proposal from the National Agency of Petroleum, Natural Gas and Biofuels (ANP) has been opened up for comment over a 30-day period between mid-July and Mid-August. It is intended to be an inducement to encourage more and bigger bids.

If implemented, the change would virtually eliminate a requirement that bidders should agree to use a quota of local workers and other local inputs in their E&P operations for the new contracts.

ANP is also considering backdating the planned change to apply to existing contracts that go back as far as 2005.

Local suppliers in Brazil are very unhappy at the proposal, a direct threat to their incomes.

In the 27 September auction, Brazil will offer 287 blocks in 29 sectors of nine basins including offshore areas in the ultra deep-water basins of Sergipe-Alagoas, Espirito Santo and Campos.

There are also shallow and deep-water blocks in the Santos Basin and deep-water ones in the Pelotas Basin.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

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