Impasse postpones Government decision on local content

Without consensus on the flexibility that will be applied and distinct objectives between oil companies and suppliers of goods and services in the areas of oil and gas, caused the federal Government to postpone the vote, scheduled for Monday, 6 February, which would decide on the change of Local content rules that will be worth for the 14th round of the ANP bidding.

Widely spoken in recent days, the regulation of Local content (CL) is part of Government policy to enhance the participation of national industry in the provision of goods and services, in order to generate employment and income for the brazilian population. In contracts of the ANP, the winning companies in the processes of bidding, has secured local content clauses, which require the involvement of national industry both in business and in the supply of goods.

This way, when a platform or refinery has great local content index, denotes that, in large part, the goods and services used in the construction are of national origin. The tug of war with the change in regulation has on one side the suppliers, who advocate different percentages of local content for each segment and at the other end that oil companies want a global percentage for each project.

In an interview with Reuters, the Chairman of the Board of oil and gas of Abimaq, Caesar silver, pointed out that one of the reasons for which the meeting was postponed because the entities and industry federations feel desprestigiadas in discussions.

The impasse, as we can notice, occurs for different demands, but which contains identical proposals on one point: the freedom of choice where investors will be local content. In the proposed, the table developed by the ANP, which determines items and subitems with specific commitments, would no longer exist.

According to the Executive Secretary of the Brazilian Institute of petroleum (IBP), the rules are not currently favor the oil industry as a whole in Brazil and reformulations are determinants for the level of attractiveness of the auctions. Despite the postponement, the new meeting to vote on the local content has not yet been set.

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