Brazil relaxes local purchasing mandate for offshore oil companies

Brazilian authorities have lowered by almost half the mandated local purchasing requirements for oil companies working offshore.

That means that the companies will be less tied to using locally made equipment on exploration and production projects in Brazilian waters.

Effective in September, when the next round of concessions will be auctioned, upstream projects will need to use only 18% of local equipment for exploration, 25% for well construction, 40% for collection and drainage systems and 25% for production units.

It is intended to encourage more bidders for the September auction and one in November. Previously the stricter local purchasing requirements meant extra costs and inefficiencies for oil companies, which put off some international players.

Local purchasing requirement for onshore will also be reduced, to 50%.

The new local mandates will need approval by Brazil’s national energy policy council CNPE at a meeting in March.

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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