The Brazilian oil sector’s controversial local content requirements (LCRs) are set to increase – and be replicated in different industries and other countries.
But the oil industry’s lobbying of the national petroleum authority (ANP), which oversees the sector’s LCRs, shows promise of a compromise that offers financial relief.
The rules, which require set percentages of a project’s supply contacts to be sourced locally, have created extra expense and problems for oil companies operating in Brazil’s offshore oil industry.
Rather than being pared back, it seems they will become more prevalent across the region.
The requirements will toughen for Brazil’s first round of pre-salt auctions expected later this year, and the country’s proposed national mining agency is expected to adopt similar requirements, said Dewey & Leboeuf partner Michael Fitzgerald.
The former chief counsel of Mexico’s state-owned oil company...