Brazil to Ease Oil & Gas 'Local Content' Requirements

Brazil will stop favoring companies that offer to purchase a larger amount of local goods and services when selecting winners in oil and gas rights auctions, newspaper Valor Economico reported on Monday.

In previous auctions, companies that offered more in the way of local content requirements were favored over peers.

The newspaper said it was "practically certain" that this will not be the case in the 14th round of oil rights concession auctions, likely to be held next year.

Brazil's new centre-right government also intends to loosen minimum local content rules by not specifying whether individual components, such as bolts, have to be produced in the country.

"There is a consensus that the local content policy is a part of a wider industrial policy and has been positive, but it should not be static and needs to be improved," Valor quoted Industry Minister Marcos Pereira as saying.

Efforts by Reuters to contact Brazil's Energy and Industry Ministries were unsuccessful.

President Michel Temer's administration has been taking action to boost private investment in the country's oil industry, such as removing a requirement that state-led oil company Petrobras be the sole operator of vast offshore reserves in the costly subsalt layer.

Reporting by Bruno Federowski