"Local content" percentage adjustments are coming

On the basis of the application filed by Mr Sergio Souza (MDB-PR), the Committee on Finance and Taxation (CFT) of the House of Deputies shall make a public hearing to discuss the fixation of local content, supported by the draft law 7401/2017, which Establishes a national investment policy for exploration and production activities of petroleum, natural gas and other fluid hydrocarbons.

The Committee intends to invite to the meeting, representatives of the Ministry of Economics, Abimaq, IBP and the former Director-general of ANP, Magda Chambriard.

In August, the report that proposed some reforms in the indices presented by Mr Altineu Cortês (PL-RJ) was approved by the Committee on Mines and Energy of the House of Deputies, in the form of a substitute for PL 7401/2017 and the other two projects (PLs 8629/17 and 9302/17).

The reform brings changes in some percentages, for example:

-For land concession in the production phase: 25% for goods and 25% for services;

-At sea, exploitation in the share has undergone a rise from the global minimum to 20%;

-The construction of wells gained an increase of 25% (current) to a minimum of 30%, being 25% for goods and 5% for services;

-The collection and disposal system has the same current rate of 40%, but points minimum of 30% for goods and 10% for services;

-The development and production service on platforms has a minimum of 30%, being 25% for goods and 5% for services.

In addition to these changes, the project determines the adoption of fines to companies that do not prove the application of percentages and adopts preference to Brazilian suppliers, provided that their offerings present better or equal conditions to suppliers Foreign. Noting that these percentages will not be applied for bidding of exploratory blocks in progress and in areas with marginal accumulations.

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