Activity

Removing the Petrobras sole operator monopoly, scaling back the excessive local content requirements, and improving transparency has worked wonders for Brazil’s oil & gas.

The latest offshore auction was a record breaking success of $2.4 billion.
==================================

“Aiming to create a more competitive, market-oriented auction model, in April 2017 the National Energy Policy Council (CNPE) approved sweeping changes to the concession regime, including a multi-year transparent bidding process, more flexible local-content policies, and the abolishment of the mandatory clause that Petrobras be the sole operator in pre-salt oilfields.

As part of the changes, local content requirements (LCR) for deepwater oil and gas exploration fell by 50% on average, to a minimum of 18%—down from 37% for previous auctions—and LCRs for deepwater production development will now follow macro-segments: 25% for oil or gas well construction; 40% for sub-sea production activities; and 25% for oil offshore production units. …”

http://www.petroleum-economist.com/articles/politics-economics/south-central-america/2018/brazil-reaps-reforms-rewards

Brazil reaps reforms rewardsEfforts to recalibrate oil concession rules to be more market-friendly and open to foreign investment are starting to bear fruit