Petrobras gets local content waiver for Libra hull

Brazil’s state-owned oil giant Petrobras has been given permission not to use a local yard for the construction of a platform hull to be used for the development of the Libra Pilot project in the Santos Basin offshore Brazil. 

Petrobras informed on Thursday that, as the operator of the Libra Consortium, it had been notified by the National Petroleum, Natural Gas and Biofuels Agency (ANP) of its decision on the consortium’s request for local content exemption for the items and subitems related to the platform subsystem of the Libra Pilot project.

Petrobras and its partners had requested the waiver in August last year and started a new bid process with lower local content requirements in September of the same year.

The consortium’s request was based on the Production Sharing Agreement, which provides for an excessive price clause, as well as the lack of supplier capable of meeting local content requirements and accomplish the desired deadlines, the Brazilian company explained.

ANP’s decision exempts Petrobras from complying with local content requirements for all items of the hull and certain items of the plants, with the exception of basic engineering and detail items, in addition to adjusting the minimum commitments for other items of plant construction, installation and integration of modules.

“Petrobras considers that easing the local content requirement is a positive sign for the oil and gas industry competitiveness in Brazil and will analyze with its consortium partners the impact of the adjustments made,” the company concluded.

The Libra consortium is comprised of Petrobras (40%), Shell (20%), Total (20%), CNPC (10%) and CNOOC (10%), and state-owned Pré-Sal Petróleo S.A. (PPSA), as manager of the production sharing contract.

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