PEDEFOR′s Executive Office published the draft Resolution of PEDEFOR′s Directive Committee No. 03/2016, which is opened for suggestions of the interested parties until November 18, aiming to improve localcontent rules for the 4th Bid Round for Inactive Areas with Marginal Accumulations, the 2nd Production Sharing Bid Round and the 14th Bid Round, all of them expected to occur in 2017.

The draft Resolution is aligned with the Government′s intention to soften local content requirements and proposes  the following to the National Council for Energy Policy ("CNPE "):

1. For the 4th Bid Round for Inactive Areas with Marginal Accumulations:

  • the removal of local content requirements.

2. For the 2nd Production Sharing Bid Round:

  • the adoption of Local Content obligations under equal conditions to the concessions of the areas adjacent to Carcará, Sapinhoá, Gato do Matoand Tartaruga Verde.

3. For the 14th Bid Round for Exploratory Blocks:

  • the removal of the local content requirements as a criterion for bid round evaluation;
  • the establishment of a minimum percentage of the global mandatory local content for the Exploration phase and for the Development stage, allowing the Operator, within certain activities, to freely select the form of expenditure (to be proposed by PEDEFOR until January 16, 2017);
  • the possibility to offset amounts, that would be transferred between the Exploration phase or a Development Stage module to other modules of the subsequent Development Stage, in the eventthere are differences between the amount of the local content commitment and the amount effectively reached by the Concessionaire

Finally, the Resolution determines as milestones for the measurement of local content by the ANP: (i) the end of the Exploration Phase; (ii) the end of each module of the Development Stage; and (iii) the end of the Field Development Stage that does not contemplate modular development.

The suggestions of the interested parties may be submitted until November 18, via e-mail:

We are available to discuss the content of the Public Hearing and to contribute with suggestions to be submittedto PEDEFOR.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.