01 set, 2016

The local content policy, which has led many local entrepreneurs to invest in their structures, in new technologies and training, will most likely be relaxed. The Ministry of Mines and Energy is studying ways to alter the rules and the Director of Exploration and Production, José Botelho Neto, has anticipated that rules will suffer a “substantial modification”.

The government considers this a major factor to attract new private investments, but the process must be careful not to further hamper the already ailing chain of national suppliers. The first change being discussed internally at the ministry, is the removal of local content offered to oil companies in the ANP auctions as a scoring factor. It is a long time issue defended for by the major oil companies and the Brazilian Petroleum Institute, but is viewed with a critical eye by the local suppliers, since it may encourage companies to reduce their commitment to hiring in Brazil.

Another proposal being discussed by the government is the inclusion of five sectors of the supply chain to be prioritized by this policy every three years, this model still needs to be understood by the market, to be implemented as of 2018, including some changes in 2017 oil auctions rules.

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