As the huge scale of Brazil's pre-salt oil reserves becomes clear, the country is attracting more and more interest from international operating companies. At the same time, overseas service companies and suppliers, particularly in the offshore and subsea sectors, are looking to capitalise on growth in demand for their products. Petrobras has recently bucked the international trend for slashing budgets by announcing a 55% increase in its four year investment plan to US$174.4 billion, which in itself has captured suppliers' interest.
However, an essential factor for operators and suppliers to consider when entering the local market is Brazil's local content rules. These rules require operators to procure a minimum proportion of goods and services for exploration and production from local sources. They affect operating companies when bidding for licences and may encourage international service companies and suppliers to establish manufacturing operations within Brazil.
For analysis of Brazilian local content rules and their impact on operating companies and suppliers, please click here
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 15/06/2009.