Abstract

Brazil Oil & Gas sector plays a major role in which concerns offshore investment in deep and ultra deep waters. From the first Exploration and Production blocks auction in 1999 until now, the Brazilian Oil & Gas sector passed though two distinct terms. The first one happened when was necessary to attract immediately the international suppliers of equipment and services to allow Petrobras and the other operators who won that auction to continue their investment in Brazil. The second term started in 2003, when the Oil & Gas National Industry Mobilization Program, PROMINP, was launched. Expectations on this second phase magnified as the Pre-Salt reservoir discoveries were announced and the demand outlook for new equipments and services was boomed. In order to be able to develop all the new national suppliers needed, the federal government sets regulations to promote local content with Brazilian local suppliers enlargement and to attract foreign direct investment from global suppliers. This paper discusses seven current regimes to promote Local Content in the Oil & Gas sector, their methodologies, partial results and challenges to reach their goals.

Introduction

The Brazilian Constitutional amendment No 09 from November, 09, 1995 together with the promulgation of the law No 9.478 from 1997, the so-called "petroleum law" allowed the end of Petrobras' monopoly in the activities of exploration and production. From then until nowadays, the Brazilian O&G market has passed through two distinct moments. The first one happened when was necessary to attract immediately equipment and services suppliers to attend the Brazilian market. They were indispensable to permit Petrobras and the others operators to continue their operations in Brazil, which were:

  • Petrobras' partnerships with foreign operators up from the round zero in 1998, when the so-called blue blocks were awarded to Petrobras to fulfill their exploratory activities; and

  • the blocks from the Brazilian Petroleum Agency (ANP, Brazilian Acronym) first auction round in 1999, who were awarded to Petrobras and several international oil and gas operators;

Like that, it was necessary to create new conditions more favorable to those companies to establish themselves in Brazil. Not only that, but also to convince their suppliers to complete the low installed capacity in Brazil to support this industry. This capacity was reduced due to more than a decade with few contracts in this industry in the country.

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