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On May 9, 2017, the National Energy Policy Council of Brazil published Resolution No. 7 approving the local content commitments for the bidding rounds under concession and production sharing regimes for 2017, as well as establishing the guidelines for local content in unitization areas. New local-content requirements reduce the previous requirements by nearly 50%. The CNPE has determined the minimum local content requirement for each of the bidding rounds as it follows:
In the 2nd Bid Round under the production sharing regime, local content has been established as follows: Carcará and Sapinhoá - 35% during the exploration phase and 30% during the development phase; Gato do Mato - 38% during the exploration phase and 60% during the development phase; and Tartaruga Verde - 55% during the exploration phase and 65% during the development phase
In the case of the 3rd Bid Round under the production sharing regime, the minimum mandatory local content was set at 18% during the exploration phase; and in the development phase, 25% for wells construction, 40% for the collection and offloading system and 25% for the stationary production unit.
In relation to the 14th Bid Round, for offshore fields, the new local content requirements have been set at 18% for the exploration phase, 25% for the construction of offshore wells, 40% for collection and transportation systems, and 25% for platforms. For onshore oil blocks, both, the exploration phase and the development and production phase, require a minimum of 50% local content.
In addition, the Resolution establishes that in the event that the deposits extend to non-contracted areas, the local content rules relative to such areas will not create additional obligations to the local content rules under the contracts of the adjacent areas.
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