Petrobras to continue supporting local technology: Rousseff

[BRASILIA] Brazil's state-run oil company and other producers will continue prioritising domestic suppliers as part of a wider strategy to stimulate investments in Latin America's largest economy, President Dilma Rousseff said.

Brazil will continue requiring oil producers to use locally-sourced goods and services when exploring for and producing oil in the country, Ms Rousseff said Thursday at an event in the northeastern state of Pernambuco. Petroleo Brasileiro SA pumps about 90 per cent of Brazil's oil.

"The local content policy isn't something that can be removed," Rousseff said. "It's at the centre of a policy to recover the investment capacity of the country."

The regulations make it more expensive to build equipment such as platforms and pipelines to extract crude from deepwater fields compared with other oil producing regions that have more flexible import policies. Delays in getting domestically built platforms on site are one of the reasons Rio de Janeiro-based Petrobras has missed production growth targets in recent years.

At last week's Offshore Technology Conference, Energy Minister Eduardo Braga and Magda Chambriard, the head of the Brazil's oil regulator, told an audience of foreign companies and investors that they are preparing a joint proposal on local content to be presented in 30 to 60 days, declining to give details. Both said the policy would be altered rather than removed.

BLOOMBERG