April 11,2018
The Board of Directors of the ANP approves (11/04) the resolution that regulates the contractual mechanisms of exemption (waiver), adjustment and transfer of surplus, and that brings the possibility of adding contracts with new requirements of local content.
The publication complies with the determination of the Brazilian Court of Audit (TCU) and gives more transparency to the procedures for requesting and analyzing the exemption, adjustment and transfer provisions contained in the concession contracts for the 7th to 13th Rounds, the Transfer of Rights and the 1st and 2nd Production Sharing Rounds.
Requests for exemption shall apply in cases where there is no national supplier, excessive price or time limit, or new technology, and must be submitted to a public consultation so that all interested parties have the opportunity to speak up.
The addition of the local content clause is allowed for all contracts in force, with effect for the phases not finished. According to the resolution, the new local content commitments in the added contracts are as follows:
Onshore Projects: for exploration and development – 50%
Offshore Projects: For exploration, 18%; For production development: 25% for well construction; 40% for collection and disposal; Commitments to SPU (Stationary Production Unit) divided into three segments: 40% in engineering, 40% in machinery and equipment and 40% in construction, integration and assembly.
The new percentages were authorized by CNPE Resolution 1/2018, published in the Federal Official Gazette on 10/4/2018, which allowed the adoption of Local Content requirements different from those in previous contracts, provided that the percentages were not lower than those provided for in CNPE Resolution 7/2017.
The indices remained in line with those of the most recent tenders, differing only in the case of the SPU, which had the minimum percentage segmented into three groups of commitments, with 40% for each one.
The companies interested in adding their contracts must express themselves within 120 days from the date of publication of the resolution.
The option for the addition has, as counterpart, the extinction of the right to request exemption (waiver) and adjustment. In addition, companies must expressly waive any litigation they may have against the ANP due to fines already paid for noncompliance with the Local Content obligation.
Other measures to unlock investments and stimulate the development of the supplier industry are under study at the Agency.
To learn more about the steps involved in drafting the resolution, see:
http://www.anp.gov.br/noticias/3885-anp-discute-new-regulation-for-local-content
http://www.anp.gov.br/noticias/anp-e-p/4203-conteudo-local-novo-prazo-para-publicacao-de-resolucao
Brazil Energy Insight 
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