Following major discoveries of oil and gas in the pre-salt layer off the Brazilian coast in 2006, Brazil has been seeking to increase revenues and develop its offshore industry. This is being achieved in a number of ways, including increasing local content requirements, establishing Petrobras as the sole operator and main off-taker in the supply chain, and providing attractive financing for new building projects at Brazilian shipyards.
Managing partner
Wikborg Rein
Concession agreements used in the bidding process overseen by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) typically include a provision requiring the purchase of Brazilian-produced products and services if such products and services are competitive in price, schedule and quality. Such agreements also prohibit procurement procedures that discriminate against local Brazilian industry.
Over the past decade, Chinese energy companies have wielded an advantage over international competitors in their ability to undercut price by using cheap, skilled Chinese labour, and equipment and parts produced in China. As Brazil flexes its muscles and turns an eye towards its own industry, China must work harder to remain competitive there.
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Geir Sviggum is the managing partner of Wikborg Rein’s Shanghai office. His clients include national governments and Chinese and multinational corporations, including both private and state-owned companies in the energy industry. Sviggum is also chairman of the Norwegian Business Association in Shanghai. He may be contacted on +86 21 6339 0101 or by email at gsv@wrco.com.cnGeir
