The Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) enacted Resolution n. 833/2020, regulating the local content criteria applied to individualization of production and annexation of areas. The resolution simplified those procedures and reinforced legal security.

Resolution n. 833/2020 from the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) ratified the criteria for local content obligations applicable to the procedures of individualization of production and annexation of areas, regarding oil and natural gas exploration and production (E&P) contracts.

Those procedures are defined as:

The individualization of production is a procedure that follows a situation where oil and natural gas deposits extend to non-contracted areas, and is characterized by a Commitment for Individualization of Production (CIP), when the different contractual blocks that include the overextending deposits belong to the same company, or by an Agreement for Individualization of Production (AIP), when they do not.
The annexation of areas is a procedure where a commercial discovery is incorporated into a single contract, when both contractual blocks already belong to the same company.

The resolution formally regulated the local content obligations applicable to those procedures, simplifying them into a single resolution. It also provided companies with the benefits of:

Electing a single local content clause (article 4, 11 and 12);
Adding the company’s own local content clauses to amendments (article 18 and annexes); and
Extending the effects of the single local content clause retroactively, for local content assessment (article 19).

Those benefits are further detailed in the resolution.

It simplified regulatory procedures in order to improve the business environment, reinforcing legal security for companies operating under E&P contracts. The resolution resulted from Public Consultation and Audience
n. 04/2020 concluded on September 2020, whose results are available here (in Portuguese).