ANP launched today (3/22) the Dynamic Panel for Adding Local Content, which presents data on requests for the addition of the Local Content Clause, based on ANP Resolution No. 726/2018. This clause, present in the exploration and production (E&P) contracts for oil and natural gas, requires companies to contract a minimum percentage of goods and services from national suppliers.

ANP Resolution No. 726/2018 allowed companies to amend (modify) the Local Content Clause of existing contracts, in order to change the percentage of national contracts. The new commitments, authorized by CNPE Resolution No. 1/2018, which allowed the adoption of local content requirements different from those in force in past contracts, provided that the percentages were not lower than those provided for in CNPE Resolution No. 7/2017.

The deadline for the request for an amendment was ended on August 10, 2018. The panel thus brings all the requests made by the companies up to that date (with block or field for which it was requested, basin in which it is located, what is the operating company, among other data), as well as the order status at the ANP. The data are presented in table and graph formats.

In order to obtain the amendment, it is necessary to comply with some requirements: the phase of the contract for which it has been requested cannot yet be closed; the possibility for the company to request waiver and adjustment of local content is no longer available; and it must expressly waive any claim it has against the ANP due to fines already paid for non-compliance with the local content obligation.

The new indices, for added contracts, vary according to the environment (sea or land), the phase or stage of the contract (exploration phase or production development stage) and the type of activity.

For onshore projects, the new index, both for the exploration phase and for the production development stage, is 50% (that is, 50% of the goods and services contracted must be national).

In the case of offshore projects, for the exploration phase, the new percentage is 18%. For the development stage, it is 25% for the construction of a well; 40% for collection and disposal; and, for the Stationary Production Unit (UEP), 40% for all segments (engineering; machinery and equipment; and construction, integration and assembly).

The percentages of the development stage are also different for Assignment Contracts, which were updated in an addendum entered into with the Ministry of Mines and Energy (MME), under the same terms of ANP Resolution No. 726/2018. In these cases, the rates are: 25% for well construction; 40% for the production collection and disposal system; and 25% for UEP.