ANP oil auction in 2017 should exclude local content

Reason for a  clash between the Brazilian suppliers industry and oil companies, local content should be excluded from the next auction to be conducted by the National Petroleum, Natural Gas and Biofuels Agency (ANP) – the fourth round of marginal areas, scheduled for 2017, date still not defined. The agency awaits the government’s position until December 13 on the requirement to purchase minimum volume of products and services in Brazil. The only certainty is that the local content will not be the criterion of definition of winners. The question is whether any incentive policy to the national industry will be foreseen in the announcement.

The decision will be made by the National Energy Policy Council (CNPE), which has a meeting scheduled for December 8. Chaired by the Minister of Mines and Energy, Fernando Coelho Filho, the board will evaluate a series of changes in the oil sector that should make the rules of operation in the country more flexible and facilitate the attraction of investors. A new policy of local content, more favorable to oil companies, which demand freedom to import goods, is on the agenda.

In a public hearing to detail the fourth round, aimed at small and medium-sized oil companies, ANP Superintendent, Marcelo Castilho, said that he expects until the 13th the publication of CNPE resolution defining the guidelines of local content. The notice and the model contract must be disclosed on the 15th.

If the definition is for the total exclusion of the local content policy, it will be the first auction of exploratory areas promoted by the ANP since 2002, in which the oil companies will be free to position themselves on the acquisition of equipment in Brazil. For 13 years the agency has defined minimum percentage of acquisition of goods and services in its auctions.

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