Local Content: With the New Rule Proposed by ANP, 1.3 Billion Reais in Fines Could Be Converted into Investments in the National Industry

In Total, ANP Plans to Open Three Public Consultations to Discuss Local Content Rules Currently Applied in Oil and Gas Contracts

A very controversial topic has sparked considerable discussion in the natural oil and gas sector: local content, that percentage that companies are required to contract here in Brazil for each awarded contract. According to ANP, decommissioning platforms can bring a sea of opportunities to our shipyards

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With the new resolution proposed by the National Agency of Petroleum (ANP), about R$ 1.3 billion in local content fines may be reverted into investments for the industry in Brazil.

This calculation was presented during the Oil, Gas, and Naval Web Series, organized by the Federation of Industries of Rio de Janeiro (Firjan) this week, by the Superintendent of Local Content of the agency, Luiz Bispo.

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The ANP, the regulatory agency for activities in the sector in our country, is opening three public consultations aimed at discussing changes to the rules that govern the minimum national content applied in oil and natural gas exploration and production contracts.

The first one is, through TACs (Terms of Adjustment of Conduct), to ensure that fines imposed for non-compliance with indices in terminated contracts are reverted into new investments in the Brazilian oil and gas industry.

During these pandemic times, all consultations will occur in a virtual format. The public hearing on this topic will take place on September 25 and will be valid for a period of 60 days.

The second public consultation in the oil and gas sector will also be available for 60 days and will seek contributions on the proposed resolution that regulates the local content criteria to be adopted in the agreement and in the individual production commitment and area annexation. This hearing is scheduled for September 15.

Finally, the third consultation is about a proposed resolution to simplify the submission of information regarding local content.

The ANP seeks to eliminate the use of two distinct methods for presenting local content reports, with different parameters and periodicity. This consultation period is shorter and will be open for 45 days, with the public hearing taking place on September 9.