The return of the local content policy in oil and gas

The National Energy Policy Council (CNPE) has approved an increase in the minimum percentages for the next oil and gas auctions, which has led to discussions about local content in Congress and the federal government as early as 2024.

Federal deputy Aureo Ribeiro (Solidariedade/RJ) is the rapporteur of Bill 7401/2017, which establishes a local content policy for the exploration and production of oil, natural gas and other fluid hydrocarbons, whether carried out under a concession or production sharing regime.

Local content is the proportion between the value of goods produced and services provided in the country and the total value of goods used and services provided in these activities.

With the change, the percentage of local content will rise from 18% to 30% in the exploration phase and from 25% to 30% in the production development phase.

For Drainage and Stationary Production Units (SPU), the minimum percentages remain at 40% and 25%, respectively.

The minimum percentages of local content also remain unchanged for blocks located on land, at 50% in the exploration phase and 50% in the production development phase.

The manufacture of modules for oil platforms in Brazilian shipyards should reach a record level of activity by 2025, close to 70,000 tons/year, according to projections made by the state-owned company in the middle of the year – even without any increase in local content requirements.

The Brazilian Petroleum Institute (IBP) has expressed concern about the lack of access to the CNPE’s agenda and argues that these decisions would require a conversation with the main entities in the sector about technical and legal aspects.


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