Brazil wants more local content in pipeline construction

April 1, 2003
Brazilian Mines and Energy Minister Dilma Rousseff said she will demand more "national content"—amounting to 75% of goods, equipment, and services—from government contractors building and installing the natural gas pipeline grid in eastern Brazil.

By an OGJ correspondent
RIO DE JANEIRO, Apr. 1 -- Brazilian Mines and Energy Minister Dilma Rousseff said she will demand more "national content"—amounting to 75% of goods, equipment, and services—from government contractors building and installing the natural gas pipeline grid in eastern Brazil.

Building the new pipeline grid will require investments of $850 million, she said.

Similar criteria for local content will be used for the construction of the P-51 and P-52 semisubmersible platforms ordered by Petroleo Brasileiro SA (Petrobras). Local content requirements also were increased for the fifth licensing round for oil and gas exploration and production conducted by the National Petroleum Agency (ANP), scheduled for August.

The measure is part of the administration's new industrial policy aimed at creating more jobs in Brazil. Rousseff forecast that 30,000 jobs would be created this year through that initiative. Brazil suffers from soaring unemployment.

"We will revive the role of economic developers and the role of job creators that government-controlled companies are supposed to have," Rousseff said. National content of other government contracts will be defined on an individual basis, the minister said.

Rousseff said the government would be particularly meticulous about contracts awarded by Petrobras and Eletrobrás, the state-owned electric power company.