Drop in Required Rates of Local Content in the Oil Sector

petroleo

The Brazilian government has cut the rates of local content requirement by half for the next rounds of Oil & Gas public auctions. Beyond that, the fines applied for non-compliance are set to be more lenient, dropping from the current 60% to 40% of the total value. This new measure will be applicable in the two pre-salt auctions scheduled for September and November of this year, but are still subject to approval by the National Energy Policy Council (CNPE, acronym in Portuguese), who will determine the matter in March. This change in regulation has the potential to attract more investments to the industry. Estimates for expected revenue at the two auctions have soared from initial reports of BRL 3.5 billion to 5 billion.

Sion Advogados boasts a highly qualified legal team with vast experience in the Oil & Gas segment. The firm is at your disposal to provide any further clarifications.

Read the full article (available only in Portuguese).

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