Petrobras predicts a fine of up to U$ 630 million in case it is not released from local content in Libra platform

Petrobras predicts that if it is not cleared of complying with the local content clauses in the implementation of the first commercial platform of Libra, in the Santos Basin, and the project is still implemented, the contractual fine could reach 630 million dollars, according to a statement.


The consortium that holds Libra’s exploration rights, considered the most promising area of the pre-salt, has already entered the request of the so-called “waiver”, to have the local content requirement of the platform supplemented, with the National Agency of Petroleum, Gas Natural and Biofuels (ANP).


Petrobras chairman Pedro Parente and Anglo-Dutch Shell chairman André Araújo said at a Rio de Janeiro industry event on Wednesday that a refusal by the regulatory agency could put the project at risk.


At the event, Libra’s executive director at Petrobras, Fernando Borges, said that if the local content rules were not relaxed, the fine to be paid could be at least 500 million dollars.


Libra’s first commercial platform is scheduled for 2020 and the waiver request provided in the contract  found that such percentages lead to excessive deadlines and prices.


“The consortium estimates that, by comparing the level of local content required in the contract and what it considers feasible, in case the ANP decides not to grant the waiver and the project is still implemented, the contractual fine for the the required local content could reach 630 million dollars, “the company said in a statement.


According to the company, since 2015 Petrobras and its partners have held bids with different levels of local content, aiming to obtain competitive proposals, in line with international metrics, and to assist the ANP in discussing the feasible level of local content of the items .


The flexibilization of the contract, however, faces opposition from the National Union of the Construction and Repair Industry of Naval and Offshore (Sinaval), which was able to suspend the tender of the platform in January, with a lawsuit, but reversed this month.


Also in the statement, Petrobras said that the consortium is making every effort to enable the implementation of the Libra Pilot project, with the highest local content possible at competitive deadlines, prices and quality.


The consortium in the Libra area consists of Petrobras (40 percent), Shell (20 percent), Total (20 percent) and Chinese companies CNPC (10 percent) and CNOOC (10 percent).


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