OIL I GAs I BioFUELS
opinion Export is necessary, by Bruno Musso, Superintendent of the National Petroleum Industry Organization (ONIP)
Norway: subsea expertise Bahia: where everything began Brazilian industry prospects partnerships in search of competitiveness
Year XV • May 2014 • Issue 36 • www.tbpetroleum.com.br
Special: 2014-2018 Business and Management Plan (BMP)
time to recover
what was lost
Brazil, big opportunities and achievements in the oil and gas sector, by Magda Chambriard
How petrochemical companies can thrive in the NGL boom, by José de Sá Naval industry and local content rules: changes coming?, by Júlia Mota
Expectations for API Brazilian new office on local industry development support, by John Modine Special interview:
Sergio de Albuquerque e Mello, managing director of the Bureau Veritas Group for Brazil
P-55 confirms the capability of the Brazilian offshore industry
issue #36 May 2014
with Sergio de Albuquerque e Mello, managing director of the Bureau Veritas Group for Brazil
P-55 confirms the capability of the Brazilian offshore industry
Special: Petrobras Business and Management Plan
Time to recover what was lost 22 More steel for the offshore industry 28 Fuels on the increase
Norway: subsea expertise 33 Stavanger technological park 35 Subsea Services goes into operation in Brazil 36 Science Without Frontiers Programme and Statoil to provide scholarships
Bahia: where everything began 44 Bahiaâ€™s large assets 48 A promising energy market 49 Wind energy cluster
50 OTC 2014 preview
Brazilian industry prospects partnerships in search of competitiveness 54 Shared visibility
e-mail: email@example.com • Phone: + 55 21 2276-3535 EDITORIAL ADVISORY BOARD Affonso Vianna Junior Alexandre Castanhola Gurgel André Gustavo Garcia Goulart Antonio Ricardo Pimentel de Oliveira Bruno Musso Colin Foster David Zylbersztajn Eduardo Mezzalira Eraldo Montenegro Flávio Franceschetti Francisco Sedeño Gary A. Logsdon Geor Thomas Erhart Gilberto Israel Ivan Leão Jean-Paul Terra Prates João Carlos S. Pacheco João Luiz de Deus Fernandes José Fantine Josué Rocha Luiz B. Rêgo Luiz Eduardo Braga Xavier Marcelo Costa Márcio Giannini Márcio Rocha Melo Marcius Ferrari Marco Aurélio Latgé Maria das Graças Silva Mário Jorge C. dos Santos Maurício B. Figueiredo Nathan Medeiros Paulo Buarque Guimarães Roberto Alfradique V. de Macedo Roberto Fainstein Ronaldo J. Alves Ronaldo Schubert Sampaio Rubens Langer Samuel Barbosa
A new Cais in the Center of Rio
articles 62 Brazil, big opportunities and achievements in the oil and gas sector, by Magda Chambriard 64 How petrochemical companies can thrive in the NGL boom, by José de Sá 66 Naval industry and local content rules: changes coming?, by Júlia Mota 70 Expectations for API Brazilian new office on local industry development support, by John Modine
sections 2 editorial 4 hot news 50 events 58 professional profile
Leadership in Offshore Class and Related Services
60 products and services 72 coffee break 74 meeting 75 opinion
Year XV • Issue 36 • May 2014 Photos: Petrobras Agency
A trademark of resilience
his edition of T&B Petroleum marks the magazine’s 15-year anniversary, which was launched in 1999 when Benício Biz Editores participated for the first time at the Offshore Technology Conference (OTC), the world’s biggest offshore event.
T&B Petroleum 36 is also a reflection of the resilience of a wider project to consolidate
a specialized communication channel in the oil and gas area, which began in 1998 when we published the first edition of TN Petróleo. Even then we were already dreaming up an English version of the magazine and our TN, T&B, TN Sustentável and Portal Naval websites. We are now here at the OTC as a result of our capacity to overcome challenges in the most adverse situations. It is this capacity that defines the offshore industry as a whole, which has passed through deep waters, new frontiers and complex situations thanks to its ability to reinvent itself... and to break paradigms. This ability has been demonstrated by both the Brazilian oil industry and its production chain, which has one of the biggest project portfolios in the international oil and gas market, including the shipping and offshore segment. The large majority of these projects are spearheaded by Petrobras, which in its 2014-2018 Business and Management Plan sets out an investment of US$220.6 billion over the next five years. Of this total, R$153.9 billion will be directed towards exploration and production (E&P) activities, most of which (almost US$136 billion) going into developing fields in the Brazilian post- and pre-salt. These are the ventures that are attracting investors from across the whole world, including Norwegian companies with strong expertise in subsea production systems. Similarly to other international companies, these are seeking to widen their operations in the country so that they can also meet local content demand. The fact is that beyond opening its doors for players from all over the world, Brazilian industry has also widened its bases and formed new centers for this production chain from the north to the south of the country. This is especially the case for Bahia, the birthplace of the country’s oil industry, which has a long history in exploration, onshore production and the petrochemicals segment and has now consolidated a place in the shipping and offshore sector. This scenario – unthinkable 15 years ago – is a reflection of not just the rapid expansion of this sector in Brazil, but also the history of T&B Petroleum itself, which seeks to contribute to the sustainable development of this industry through the generation and dissemination of technical knowledge. After all, information is our business.
Benício Biz Executive Director of T&B Petroleum
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T&B Petroleum 36
Aker Solutions won a contract worth more than USD 300 million from Petrobras to supply eight manifolds that alternately inject water and gas to increase oil recovery from Brazil’s deepwater offshore fields. The subsea manifolds, designed for water depths of 2,500 meters, will be installed by Petrobras and its partners in deepwater pre-salt field developments. The units have a design life of 30 years and the first is scheduled to be delivered in 2016. “We are pleased to work with Petrobras on its important and technically challenging pre-salt developments,” said Øyvind Eriksen, executive chairman of Aker Solutions. “Brazil is a key market for our subsea technology and one
of the fastest-growing areas in the oil and gas industry.” The order will be executed by Aker Solutions’ Brazilian subsea division. The unit last year began work to double its subsea equipment manufacturing capacity at a plant in Curitiba by 2015. About 70 percent of the contract with Petrobras will be procured and manufactured in Brazil. “Aker Solutions is committed to delivering high local content in Brazil, where demand for complex subsea production equipment is growing,” said Luis Araujo, president for Aker Solutions in Brazil. The manifolds will play a key part in the crucial injection process that helps improve recovery from the fields.
Photo: Courtesy Aker Solutions
Aker Solutions to Supply Subsea Manifolds for Petrobras Pre-Salt Fields
Rolls-Royce invests in new marine facility in Brazil
Photo: Courtesy Rolls-Royce
Rolls-Royce and UK Chancellor George Osborne announced today that the Group will further invest in Rio de Janeiro to better support customers in the rapidly expanding offshore oil and gas industry. A new R$ 80 million marine facility in Duque de Caxias will be used to assemble and test large thrusters and other propulsion equipment for use on semisubmersible rigs, drill ships, FPSOs and other highly complex offshore vessels. Construction at the 27,000 sqm site will begin next month. Delivery of the first set of UUC 405 thrusters, for seven drill ships being built by Brazilian shipyard Atlântico Sul for Sete Brasil, will commence in June of 2015. Chancellor George Osborne, said: “A central part of the government’s long-term economic plan is to back British companies that are seeking to export more and help them secure success in emerging markets. “I am very pleased to be able to announce the latest facility to be built by Rolls-Royce. It is an example of the success achieved by innovative British technology, drawn from years of experience in challenging environments such as the North Sea. “We have been working closely with the Brazilian government to further strengthen our partnerships in the energy sector; this is a great example of that work paying off. We look forward to deepening our collaboration in this area.” Francisco Itzaina, CBE, Rolls-Royce Regional Director, South America, said: “Rolls-Royce has long been committed to the development of Brazil’s energy sector. This latest facility enables 6
T&B Petroleum 36
us to more closely support our marine customers’ investment and operational needs as they contribute to the development of Brazil’s deepwater oil and gas exploration and production activities. “Rolls-Royce welcomes any Government initiative that aims to promote exports, especially from high-skills manufacturing industries. UK export finance has an important contribution to make in backing business and any expansion of its role would be a significant move.” This is the second investment Rolls-Royce has made in the expansion of its marine capabilities in Brazil this year. In March, the Group opened a state-of-the-art £2 million customer training centre, in Niterói, Rio de Janeiro; the first of its kind in South America and only the fourth the company has opened globally. The training centre provides valuable hands on training and simulation, but in a controlled environment, for the highly skilled engineers and technicians working onboard the highly sophisticated offshore vessels and rigs in the country’s deep water oil and gas fields.
Photo: Courtesy CGG
PTTEP acquires participation CGG Releases EarthModel Builder in BG Brasil for Quick Reservoir Modeling blocks CGG has released Earth- ge their current modeling solutions Model ® Builder, an affordable modeling solution that is used to improve efficiency, accuracy and flexibility for more realistic representations of the reservoir. Part of the Jason suite, EarthModel Builder is a unique tool for asset teams and service companies to generate multiple first-pass reservoir models containing rock properties. Organizations of all sizes, from international oil and gas companies to small independents, can use the models to optimize their field development and well planning processes. EarthModel Builder ’s user-friendly interface and dynamic capabilities help to create quick models and move projects forward. Extensive quality controls ensure a greater level of accuracy in both conventional and unconventional geological settings. Integration with CGG’s PowerLog solution offers well analysis for even more insight. Petrophysicists and geologists can compute multiple curves and run a variety of modeling scenarios to better understand their reservoirs. Asset teams and service companies can also use EarthModel Builder to supplement and levera-
for which they may hold a limited number of licenses. After quality checking and building quick models to assess the information, companies can move the models into their existing technology for reservoir characterization. Sophie Zurquiyah, Senior Executive Vice President of CGG’s Geology, Geophysics & Reservoir Division (GGR), said: “With EarthModel Builder, all E&P stakeholders are now able to build the most up-to-date rock property models. This new software offers clients an affordable, exciting and dynamic solution for building and updating models across the life of the field.” CGG’s GeoSoftware portfolio integrates multiple geoscience disciplines throughout the exploration and development workflow to produce a more realistic model of the reservoir. This software is an additional option available as part of CGG’s easy-to-use suite of advanced tools supporting the seismic interpretation to reservoir optimization workflow. For the oil and gas industry, better seismic and better models drive better drilling decisions, reduce risk, and help achieve a greater return on reservoir assets.
PTTEP BL, a subsidiary of PTTEP, signed farm-in/farm-out agreement with BG Brasil for four predominantly deep water blocks with 25% participation interest. This is PTTEP’s first step in expanding investment in petroleum exploration in South America. The four petroleum exploration blocks; namely BAR-M-215, BAR-M-217, BAR-M-252 and BAR-M-254; cover an area of approximately 3,077 square kilometers in the Northeastern deep water of Barreirinhas basin, Atlantic Ocean, Brazil. Upon approval from the Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP), PTTEP BL will hold 25% interest while BG Brasil, the operator will hold 75% participation interest in such blocks. “The signing of this agreement with BG Brasil is a significant and the first step for PTTEP to expand its investment in South America which is one of the highest potential oil resources of the world. This year, the joint-venture partners plan to commence a multi-client 3D seismic survey in the 4 blocks to assess preliminary potential,” added Mr. Tevin. At present, PTTEP has invested in over 40 petroleum exploration and production projects in Southeast Asia, Middle East, Africa, Australia, North America and, now, also in the South America continent. T&B Petroleum 36
Prumo signs contract with Edison Chouest for construction of base at Açu Prumo Logística signed a rental agreement with US company Edison Chouest, which is going to build an offshore logistics support base and ship repair yard for its own vessels at Açu Port. Able to receive up to 12 vessels and serving the current clients of Edison Chouest, the base will be constructed at T2 (the venture’s onshore terminal), which has a 13 km wharfline and 10m draught and which serves the oil and gas sector. “We are embarking upon a new stage at Açu Port, with the pace of the works being resumed, favorable financing conditions secured and a new management team at the helm. Plants are already in operation and vessels are forecast to begin using the T2 channel in the coming months. Edison Chouest’s arrival will contribute to an acceleration in the occupation of the landside yard near T2 channel. An offshore support base of the size that Chouest is going to build will
represent an important anchor which will attract the entire chain of marine goods and services for the oil exploration industry to set up at Açu Port. This agreement reinforces our clients’ confidence and the importance of the venture to the oil and gas sector ”, said Eduardo Parente, Prumo CEO. Gary Chouest, the CEO of Edison Chouest Offshore, said Açu has the best conditions for constructing offshore bases in Brazil. “In addition to its strategic location near Campos Basin and its excellent draught, Açu Port is ready and has an area available in the surroundings, which makes it possible to expand our plant and bring in a chain of suppliers. These qualities as a whole were fundamental to our choice”.
Edison Chouest has signed an agreement to rent an area of 255,200 m² for the period of 15 years, renewable for 3 more periods of 5 years. The 440 meter wharfline can house up to 12 berths. The company can also increase its wharfline by 220 meters within 12 months and a further 220 meters within 18 months, being able to double its capacity and achieve a wharfline of 880 meters, able to house 18 vessels, and an area of up to 510,400 m². “The construction of this base at Açu Port is essential for the expansion plans of Edison Chouest in Brazil. It will enable us to serve our existing clients, but also to expand to serve new contracts that are in negotiation”, said Ricardo Chagas, an officer of Edison Chouest. R$ 950 million is forecast to be invested in developing the plant, which is set to begin operating at the start of 2015. A total of 900 jobs will be created at the base.
Platform P-20 resumes production Petrobras reports that platform P-20, deployed in Marlim field, Campos Basin, restarted production on Monday, April 7. The platform was temporarily shut down due to damage caused by a fire in its chemicals system on December 26 of last year. With authorization from the competent agencies, Petrobras has taken all necessary steps to normalize operations on the P-20, in line with the most rigorous health, safety and environmental standards. hard and tirelessly for around 100 days to complete the repair work. Overall, 79 professionals onshore (25 working exclusively on the operation) as well as 220 onboard were involved. P-20 has a potential output capacity of 20,000 barrels of oil per day and is one of the platforms in the Campos Basin’s Marlim Field production system.
T&B Petroleum 36
Photo: Courtesy Rolls-Royce
Specialized teams from various disciplines worked
T&B Petroleum 36
Petrobras recently commenced the removal of the hull of P-66 platform in the Rio Grande Shipyard, Brazil. The operation required dredging to open the gate, which was conducted by LUSCHI. “About 30,000 cubic meters of sediment were dredged in less than 20 days using a hopper dredge and a very powerful submersible pump for inaccessible places,” says Roberto Britto, director of logistics Luschi.
The dredging activities have started in March, alongside the works of partial flooding of the dry dock and inspection of the hull. The complete filling of the dock was taken on April 4, when the climatic conditions are presented adequate, until it reaches about 14 meters depth needed to open the door-boat. This platform is the first of eight replicant FPSOs (Floating Production
Photo: Petrobras Agency
Hull of P-66 platform leaves shipyard in Rio Grande do Sul
Storage and Offloading) to be built for the development of the pre-salt projects, in the prolific Santos basin. This unit will have a processing capacity of 150,000 bpd of oil and 6 million m³/day of natural gas.
Enel Green Power starts construction of the new hydro plant in Brazil Enel Green Power has started construction works at the new Apiacás hydroelectric complex, in the state of Mato Grosso, Brazil. Apiacás will consist of a cascading sequence of three power plants, named “Salto Apiacás”, “Cabeza de Boi” and “Fazenda”, comprising seven turbines of around 14.5 MW each, for an overall installed capacity of 102 MW. Once fully operational, the Apiacás hydro complex will be capable of generating up to an approximate 490 GWh each year, therefore meeting the country’s high energy demand which is estimated to grow at an average annual rate of 4% until 2020. A thin-film photovoltaic facility will be installed to reduce power consumption on the construction site.
The facility is a stand-alone one, which means it is not connected to the grid. The photovoltaic plant will add a further 1.2 MW of installed capacity. Once the hydro complex will be completed, the photovoltaic plant will keep operating, therefore adding its own renewable power to the green energy produced by the new hydro plants. The new hydro complex is held by Enel Green Power Cabeza de Boi S.A., Enel Green Power Fazenda S.A., Enel Green Power Salto Apiacás S.A., subsidiaries of Enel Brasil Participações Ltda. The hydro complex will be completed and enter operation in the first half of 2016. Construction of the hydro complex, in line with the growth targets set out in the 2013-2017 Enel Green
Power business plan, requires a total investment of around 287 million US dollars, financed through the Enel Green Power Group’s own sources. Enel Green Power was awarded the contract to build the Apiacás complex in a 2013 public auction, the “New Energy Auction” named “A-5”. The auction was launched by the Agência Nacional da Energia Elétrica (Aneel). The project is supported by a thirty-year PPA, a contract to purchase the power generated by the complex, which will be deliveed to the national grid. In Brazil, Enel Green Power currently has around 210 MW of installed capacity, of which 93 MW from hydro and the remainder from wind power.
On March 4th, 2014, production at Cascade and Chinook fields hit 40,000 barrels per day (bpd), a new output record for these oilfields. Cascade has 3 wells in operation and Chinook 2 wells. The record levels were achieved by bringing on stream two new wells, Chinook-5 and Cascade-6, contributing a further 28,000 bpd to the previous output of 12,000 bpd. Cascade and Chinook are located some 260 km south of the Louisiana coast and 24 km apart, at a water depth of 10
T&B Petroleum 36
Photo: Petrobras Agency
Cascade and Chinook achieves output record of 40,000 bpd
2,500 meters. The wells have an average depth of 8,000 meters are connected to
the BW Pioneer, the first FPSO (Floating Production Storage and Offloading) approved for use in the U.S. sector of the Gulf of Mexico. The oil is transferred from the FPSO to shuttle tankers and delivered to refineries and terminals along the North American coast. Petrobras is the operator of both fields, with a 100% stake in the Cascade field and a 66.7% stake the Chinook field, in partnership with Total E&P USA Inc. which holds the remaining 33.3%.
ÂŠ 2014 United Airlines, Inc. All rights reserved.
Flat-bed seats from Brazil to the U.S.
T&B Petroleum 36
entrevista special interview exclusiva
of the Brazilian offshore industry by Beatriz Cardoso
Naval architect Sergio de Albuquerque e Mello, managing director of the Bureau Veritas Group for Brazil, makes this statement based on over 30 years working in the Brazilian offshore industry and his international experience as corporate vice-president of Oil and Gas for Bureau Veritas at the company’s headquarters in Paris. “P-55 is the first platform of its type and scale that has been designed and constructed entirely within Brazil. In other words, it confirms the capability of the country’s offshore shipping industry,” says Mello, who has participated in the certification of many of the sector’s projects and ventures.
In an exclusive interview with T&B Petroleum, the Bureau Veritas executive observes that the recovery of Brazil’s shipping industry came about as a result of strategic and not just economic factors. “This was Brazil’s big secret,” he explains, who currently has five platforms in the Santos Basin in his portfolio: P-67 and P-70 (OSX Mendes Junior), P-68 and P-71 (Jurong), for which he will be responsible for the integration phase and final certification once these units are in operation, and P-76 – onerous transfer (Technip – Techint). T&B Petroleum – Bureau Veritas (BV) has classified Petrobras’ P-55 floating production unit (FPU) – which at the turn of the year started to produce oil at a depth of 1,720 m in the Roncador Field, in the Campos Basin – as within international safety and conformity standards. What does the classification of this platform signify? Sérgio Mello – In terms of classification, P-55 is not very different to other offshore units. Its importance is in the fact that it is the first semisubmersible platform of its scale that was completely designed, constructed and integrated in Brazil. It is the result of many years of hard work and its construction brings credibility to the Brazilian offshore industry. The certification of this unit as completely conforming to international standards and its successful startup both send out the message that local industry has the full capacity to construct units of this size and specification for the oil and gas market. Aren’t there many countries across the world with a shipping industry qualified to offer this kind of service? That’s true. For a unit of this type and scale we have our usual Asian suppliers – South Korea, Singapore and China. There are others that are also capable but not mobilized, such as the United States and the European countries with this shipping tradition. The fact is that this industry has migrated to Asia and there haven’t been any big mobilizations in the west. Brazil’s trick was to encourage the recovery of its shipping industry, with a strong focus on the offshore sector. Beyond the jobs that it creates, why is it important to have a local offshore industry? In Brazil this is more of a strategic than an economic factor. Why did this happen here? For a range of reasons, all of which were strategic. First of all due to the importance of the offshore exploration and production of oil and gas in the energy sector, and also due to the fact that Petrobras is one of the main drivers of the national economy. This was a way of making the both country and Petrobras more independent in relation to other countries and suppliers. It is strategically very important to have this industry consolidated these days, in any part of the world. The conclusion of a project such as the P-55 confirms this. Did Bureau Veritas track this venture through every stage? Yes. Bureau Veritas has been working together with Petrobras for six years on the execution of this project. It is important to remember that the
T&B Petroleum 36
Photo: Beatriz Cardoso
Sergio de Albuquerque e Mello, managing director of the Bureau Veritas Group for Brazil
company doesn’t work with quality control: it simply audits the conformity of a project with international standards and regulations. But it is obvious that none of these activities – establishing rules and evaluating and verifying a unit’s conformity and structural integrity – stand alone. In reality, we follow and certify each project from its conception to the construction phase at the shipyard, as well as verifying and inspecting all of the components that will be used, which come from factories all across the world. All of the equipment used must be properly certified to confirm that it meets the relevant requirements. This work continues after the unit has gone into operation and spans its entire service life. In other words, BV will carry out periodic inspections to assess the unit’s conformity to the standards and to maintain its international certification for the operations it performs.
Did BV work teams go to the two shipyards? Yes. Both during the construction of the hull at the Estaleiro Atlântico Sul (EAS) shipyard in Suape, Pernambuco, and at the Estaleiro Rio Grande (ERG) shipyard in Rio Grande do Sul, where some of the modules were manufactured, the deck was installed, modules produced at other locations were assembled and the platform’s systems were integrated. There were many challenges that deserve mention. One of these was the managerial challenge of bringing together and assembling the huge variety of subparts to create an oil production platform and get it into operation. This really should be celebrated. Another challenge was the construction of the hull, which took place at the same time as the EAS shipyard was being built, the two projects being concluded at practically the same time. Everybody is aware of how difficult this was, in a context
BRAZIL’S TRICK WAS TO ENCOURAGE THE RECOVERY OF ITS SHIPPING INDUSTRY, WITH A STRONG FOCUS ON THE OFFSHORE SECTOR
T&B Petroleum 36
Photo: Petrobras Agency
Photo: StĂŠferson Faria, Petrobras Agency
Special BMP 2014-2018
time to recover
what wa The announcement of Petrobrasâ€™ 2013 results and the goals in its 20142018 Business and Management Plan have created expectations that with the company entering into a new phase of expansion in Brazilian oil and gas production, the industry will recover the rate of growth it demonstrated at the turn of the decade. After poor results yet some recuperation in 2013, the operation of both the platforms delivered last year and those due this year should guarantee positive results not just for Petrobras, but also for a range of agents in the production chain, such as the steel, equipment and service sectors. 18 18
T&B Petroleum 36 T&B Petroleum 36
Photo: Stéferson Faria, Petrobras Agency Photo: Thelma Amaro Vidales
Photo: Alexandre Brum
Petrobras 2014-2018 Business and Management Plan
by Karolyna Gomes and Rodrigo Miguez, with cooperation Maria Fernanda Romero
s lost P
etrobras has announced its 20142018 Business and Management Plan, which contains goals that prioritize a boost to its hydrocarbon production curve and which details a total investment of US$220.6 billion over this four-year period. Of the total amount, US$153.9 billion (70%) will be designated to the exploration and production (E&P) area – an increase of 4.3% compared to the company’s previous plan. An additional amount of US$44.8 billion will be
invested by partner companies. This strategy seeks to lead the company to achieving its main objective: to double oil production, reaching 3.2 million barrels per day in 2018 and 4.2 million in 2020. The announced investment focuses on developing production, which was allocated US$112.5 billion (73%) of the amount reserved for E&P. As was to be expected, the pre-salt is still the main focus of attention, with around 60% of the investment designated for concession, production sharing (Libra) and onerous transfer areas.
The E&P area’s participation in the company’s investments has grown substantially over the last five plans. It increased from 48% in the 2010-2014 plan to 62% in the revised version last year before reaching the levels found in this years plan. This increase in resources has been accompanied by a growing number of production sites going into operation, long-term testing and positive exploration results, mainly in pre-salt areas, where the company claims to have achieved a success rate of 100%. T&B T&BPetroleum Petroleum36 36 19
subsea expertise by Maria Fernanda Romero
Norway is one of the world’s biggest oil producers and makes extensive use of cutting-edge technology and solutions in its oil industry. It’s extensive underwater pipeline network – the biggest in the world – and its experience operating in the severe offshore conditions in the North Sea make the country stand out for its development of innovative technology for deepwater exploration and production and underwater systems. This and the pre-salt discoveries in Brazil have led to the two countries strengthening the exchange their oil and gas industries have established over recent years.
razil has been on the route of many Norwegian shipping companies since the 19th century. At that time, shipping companies arrived here bringing cod and returned to Norway with sugar and coffee. In the 1970s, the mining sector and shipping industry started to attract these companies back again. When changes were made to Brazilian industrial legislation in 1990 and a new oil and gas market started to emerge, Norwegian businesses quickly started to become involved in seismic acquisition, shipbuilding and oil services. The beginning of the decline in the Norwegian oil and gas sector in 2000 encour-
T&B Petroleum 36
aged companies to look overseas towards the growth of this sector in Brazil. According to the Norwegian government’s “Brazil Strategy” carried out in 2011, Brazil is where the country has made the most of its overseas investments after the European Union and the United States. Norway is a big exporter of financial capital through its sovereign wealth fund, the Government Pension Fund Global (GPFG). Of all of the emerging economies, Brazil is the country that receives the most from this fund. The two countries have been commercial partners for over 170 years, and after the existence of the pre-salt reserves was announced in 2007, Brazil has become the number one
Capital: Oslo Area: 385,155 km² Population: 5 million Density: 12 P/km² GDP: US$280 billion Per capita income: US$59.300 HDI (2011): 0.955 Literacy rate: 99.0% Currency: Norwegian Krone Official site: www.regjeringen.no Main industries: oil and natural gas, food processing, shipbuilding, wood and pulp products, metals, chemical products, timber, mining, textiles, fishing.
international destiny for Norway’s offshore cluster. The oil and gas industry is the most important sector between the two countries in terms of cooperation; it is responsible for the largest number of companies installed
(49%) and for the highest number of employees (50%). According to Innovation Norway, a promotion agency for the Norwegian government, the segment received 64% of all the investments made between 2009 and 2011. The industrial sector received 27%, renewable energy received 5% and the offshore area received the remaining 4%. There are currently around 110 Norwegian companies in Brazil, of which over 75% operate in the oil, gas and shipping sectors. The majority of these were recently established and have less than 10 years of experience in the country. Brazil’s heavy tax burden, known as the “Brazilian Cost”, and its lack of trained workforce are some of the chal-
lenges involved in operating in Brazil cited by these companies.
A vocation for oil Stavanger and Bergen are important Norwegian oil regions, where most of the industry’s companies and their activities are based. With an economy that was historically based on fishing and industrial activities, the city of Stavanger became the Norwegian oil capital in 1970. Oil is today the main source of income for Stavanger’s local population. With a population of 300,000, Stavanger is home to 40 oil companies and 500 local companies that are operating on an international level. Oil and gas production in the city corresponds to 40% of Norway’s total production. The current challenges that the region faces as a result of the excessive growth of this sector are high salaries, expensive real estate and traffic problems. The city of Bergen is the second largest in the country in terms of size and population and has a thriving local economy based around its port. It is also a world-leading cluster in subsea oil technology and the base for the Norwegian Centre of Expertise Subsea (NCE Subsea) that brings together over 100 companies and organizations. NCE Subsea has contributed to strengthening and internationalizing Bergen’s subsea industry by providing financial and technical support for technology development projects. The cluster’s projects have already received over 470 million Norwegian Krones in funding, and focus mainly on the maintenance, modification and operation markets, as well as innovating technical products and cutting-edge technology for the subsea industry. The aim is to encourage further collaboration and the exchange of experience between national and international collaborators within
the cluster. NCE is a national programme supported by Innovation Norway, the Norwegian Research Council and the Industrial Development Corporation of Norway.
Subsea cooperation According to the ‘2012 World Energy Outlook’ by the International Energy Agency (IEA), the international market for subsea systems was valued at US$60 to US$94 billion for the period 2011-2015, and Brazil is one of the main consumers of these due to increases in domestic deepwater production. Many Brazilian suppliers are seeking partnerships with Norwegian companies that are experts in the technology demanded by today’s market, mainly to be used in fields in deep areas and in the pre-salt layer. The drilling and subsea areas require heavy investment in cutting-edge technology, and Norway has a lot of expertise in this segment with its huge network of underwater pipelines and offshore units that are subject to the harsh environmental conditions of the North Sea. The products and services it offers range from drilling, completion and subsea exploration and production equipment to environmental monitoring equipment, water treatment and subsea instrumentation.
Significant growth Operating in Brazil for over 10 years, Clampon, manufacturer of intelligent ultrasonic sensors such as particle (sand) monitors, PIG detectors, corrosion and erosion monitors and leak detectors, has grown significantly since it inaugurated its new headquarters in Berger in 2011; its new office is the third most eco-efficient building in Norway in terms of energy saving. The company has 90 employees in Bergen and 15 in Houston, USA. In Brazil it made its first sale to Petrobras in 1998 and particiT&B Petroleum 36 33
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where everything began
As the birthplace of the national oil industry, Bahia has an important place in the history of Brazilian oil and gas, as it was there that everything started 75 years ago when oil was discovered in a well drilled in the neighbourhood of Lobato in Grande Salvador. Since then, Bahia has demonstrated its natural vocation for the oil business: it is still home to the second largest oil refinery in the country, the Landulfo Alves Refinery (RLAM) in Mataripe and it is the location of the largest integrated petrochemical complex in the southern hemisphere – the Camaçari Industrial Pole. With the construction of the Estaleiro Enseada do Paraguaçu shipyard in Maragogipe, Bahia is now entering a new industrial phase in the shipping and offshore sector. This is a state that is constantly being driven by oil.
he discovery of oil in Bahia was a landmark moment in the economic development of the state after the decline of the country’s sugar industry. The Recôncavo Baiano region has been through huge transformations in its productive matrix. This also influenced other activities, such as cattle breeding, shipping and timber production. The old rural landscape saw the arrival of drilling rigs and other equipment typical of the exploration and production of oil. In the oil and gas Exploration and Production (E&P) segment, the state contains around nine sedimentary basins where approximately 30 concessionary companies operate, responsible for 2.3% of total oil production and 15.5% of domestic gas production. The oil and gas segment is important in the history of Bahia. The state once occupied top place in the national ranking of reserves and production, though it has slowly slipped down from this position since. A range of
factors that have arisen on the national and local scenario over recent years, including the discovery of the pre-salt reserves, the resurgence of the shipping and offshore industry and the prospect of exploring the shale gas and shale oil reserves, have started to counter the negative outlook that had taken hold of this sector. According to data from the Bahia Association of Oil Supply Chain Companies (RedePetro Bahia), the oil and gas market represents around 70% of Bahia’s industrial market – and activities within E&P, chemistry and petrochemicals provide the largest Value-Added Tax on Goods and Services (ICMS) contributions collected by the state.
by Maria Fernanda Romero
In terms of participation in the state’s economy, this sector is one of the most important, as it represents 55% of the value of mineral production, 32% of the value of industrial transformation and almost 30% of ICMS revenues. Just the “Oil Derivatives” sector is in front, with 35% of the total, ranking above the “Chemical and Petrochemical” and “Automobile” segments. Given its importance for the sustainable development of the state, this segment is one of those being addressed by the Bahia’s Industrial Policy, whose strategies and proposals were published in 2011. A set of legal instruments and programmes are currently going through the final phases of preparation, and will set the basis for the development of this sector in the state. Bahia’s Industrial Policy was designed through a partnership between the State Secretary for Industry, Trade and Mining (SICM), the Federation of Industries of the State of Bahia (FIEB), the T&B Petroleum 36 41
OTC 2014 Preview
Brazilian industry prospects partnerships in search of
competitiveness The Brazilian delegation at the Offshore Technology Conference (OTC), totaling around 600 Brazilians, currently occupies fifth place in the rankings for foreign visitors. According to the Brazilian Institute of Oil, Gas and Biofuels (IBP), the tradition and relevance of the Brazil Pavilion has led it to become a sort of informal embassy for the country, attracting numerous visitors from other countries that are interested in a wide range of areas. by Maria Fernanda Romero
W Exhibition area: 214,000 square feet Visitors: 104,800 Companies: 2,728 Countries: 40 52
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ith its new layout, the Brazil Pavilion, put together by the IBP and the Brazilian Exports and Investments Agency (APEX), will be taking part in the OTC for the 16th time this year. Brazil has participated in the fair since it began in 1999 in order to promote its industry internationally, and the success of this initiative is reflected in the growing participation of national companies at the event.
In the beginning there were just six companies involved, participating in a space smaller than 100 mÂ˛. Today the pavilion contains 45 companies and covers 850 mÂ˛, and there is demand to create more space and make room for more organizations. The OTC is the biggest international exhibition in the oil and gas area, and attracts over 100,000 visitors to Houston. The IBP, as one of the member organizations of the OTC, has high
expectations for the 2014 edition considering the current dynamics of the international offshore industry and the high demand for goods and services. This year the organization expects a growing number of technicians and companies from Brazil to attend the event. “We want to give opportunities to small and medium-sized Brazilian suppliers so they can promote their products and services. The OTC is also an opportunity for these companies to get to know new technology and services and widen their networks,” emphasizes Executive Secretary of the IBP Milton Costa Filho. A mezzanine area has been added to the stand this year in order to widen the space available for exhibitors and to provide more comfort to participating companies. The Brazil Pavilion is made up of mainly small and medium-sized companies that supply goods and services to the sector. These include companies that manufacture equipment such as valves, compressors, platform automation systems and anti-corrosive materials, research laboratories and engineering companies. In addition to suppliers, other important Brazilian organizations linked to the industry are involved. Milton Costa Filho explains that foreign operators and suppliers have made heavy investments in the construction of research centers and laboratories across Brazil so that they can increase local production capacity and meet the demands of the segment. Therefore, trade fairs such as the OTC are a way in for these companies, enabling them to make contact with the reality of this industry within a wide range
Brazil Pavilion Booth 1117 Exhibition area: 17,600 square feet Organizations: 2 Companies: 36 Organizations: Abenav and AGDI Participating Companies: Açoforja, Adelco, Altona, Altus, Chemtech, EBR, Emdoc, Fechometal, Ferral, Flexomarine, Forship, Gascat, Grupogp/Swanson, LFM, Keppel Fels Brasil, Laboceano, MFX do Brasil, MRM, Navium, Netzsch, Nuclep, Oceanica, Orteng, Poland, Radiomar, Radix, Rio Engenharia, Rockwell Automation, Roxtec, Sandech, STX Engemar, Superquip, T&B Petroleum Magazine, Vanasa, Vulkan do Brasil and Weg. Booth 1241 Exhibition area: 9,600 square feet Organizations: 4 Companies: 2 Organizations: ANP, FIRJAN, ONIP e OTC BRASIL 2015 Participating Companies: CSL and Oxifree of countries. Visitors to the pavilion from other countries come in search of partnerships with local businesses and information on how to invest in Brazil. Bruno Musso, superintendent of Brazil’s National Petroleum Industry Organization (ONIP), believes that this year the OTC will repeat its success of 2013. The organization’s main focus is to widen its contact with international companies with an interest in Brazil’s oil sector. For yet another year, ONIP will be working on forming partnerships. According to Musso,
international interest in Brazil needs to be used to attract investments and technology into the country, preferably via partnerships with national companies. “This model establishes an advantageous environment for both parties. It allows foreign companies to gain quick access to the Brazilian market, with the backing of the companies that already supply the sector, and at the same time increases the knowledge held by Brazilian companies and the possibility of technology transfer in the country’s underdeveloped segments,” he explains. Musso explains that foreign visitors to the Brazil Pavilion and ONIP often seek information on the Brazilian market. They have T&B Petroleum 36 53
Despite having confronted the obstacles often faced by women working in a predominantly male environment, chemical engineer Elizabeth Barabas never stopped building up her experience in the areas of chemistry and instrumentation. Currently an instrumentation and automation engineer for the Spanish company Contromation, Elizabeth affirms that of all of her professional achievements, “The best of them all was the work itself and the friends made along the way.” by Maria Fernanda Romero
Photos: T&B Petroleum
orn in Budapeste, Hungary, and raised in Brazil since she was a year old, Elizabeth Barabas decided to study chemical engineering thanks to the positive influence of her science teacher at school, leading her to follow in her father’s footsteps, who was also a chemist and loved what he did. She fondly remembers the story of how her family came to Rio de Janeiro during the Hungarian Revolution of 1957. “My father was looking for a job when a friend who was in the same ship we came over in invited him to a reception that President Juscelino Kubitschek was due to attend. My father spoke to him and explained that he had left Hungary so that his family could live in a free country which had opportunities for work,” she remembers. The president asked for everybody’s attention, repeated what my father had said and asked if anyone was able to give him a job. “Various companies and institutions volunteered to help. We ended up moving to São Paulo when my father chose to work at the Technological Research Institute (IPT),” she says. After graduating in chemical engineering, Elizabeth started work as an intern at a chemical plant in São Paulo. She started in the chemical analysis laboratory, where she learned the importance of taking care of the small details performing analyses that required results “to three decimal places.” Her biggest desire was to work at the company’s projects department, which she managed to do! She produced some very interesting work, as the plant’s small batch process units enabled her to carry out many of the projects she created. One of these was a pilot plant made completely out of glass, constructed to simulate the small-scale manufacture of new products before they were taken up to industrial-scale production. Her first success was at the company Empresa Internacional de Engenharia, in São Paulo, configuring Brazil’s first Digital Distributed Control System (DDCS), implemented at a petrochemical plant in Capuava. After this, the group that the company was part of became very interested in this system and the business, and created an automation system to sell and integrate in the Brazilian market.
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During the first week of November 2013, Vallourec Tubos do Brasil was audited to get the ISO 50001 (Energy Management) certification and to maintain the ISO 14001 (Environmental Management) and OHSAS 18001 (Health and Safety Management) certifications. The major highlight is that the company’s got ISO 50001 certification without any non conformance and also it is the first Brazilian steel maker company to get such certification and the third one in the Vallourec Group. ISO 50001 specifies requirements for establishing, implementing, maintaining and improving an Energy Management System. Investments in the energy efficiency are always a part of Vallourec’s initiatives. According to the Integrated Management System Manager Paulo Leite, “recommendation for certification is a great achievement and shows how serious and mature the company’s management system is”.
Photo: Bruno Lavorato
Vallourec Tubos do Brasil was certified according to the ISO 50001 Standard
The benefits from the ISO 50001 certification are: • the reduction of production costs and the use of natural resources; • the possibility to produce goods that are cheaper and more competitive in the market; • the improvement of the company’s economic performance, enabling new investments in the several areas;the energy management improvements regarding projects for
reduction of greenhouse effect gases emissions; • the continuous improvements in the Energy Management System. Vallourec acknowledges how professional and dedicated every employee was in achieving this certification and will keep working hard to ensure that all concepts and practices of ISO 50001 become increasingly a part of the Company’s activities and processes.
Subsea 7 awarded contract offshore Brazil Subsea 7 S.A. announced the award of a lump sum contract valued at approximately $110 million by Shell for the installation of jumpers, umbilicals and associated subsea structures for the BC-10 Phase 3 Project in the Campos Basin offshore Brazil. Project management and engineering will be performed from Subsea 7’s offices in Rio de Janeiro and will commence in Q1 2014 with the offshore campaign starting
in Q3 2015, using the construction/ flexlay vessel the Skandi Neptune. The project has a total durationof approximately two years.
Victor Bomfim, Senior Vice-President of Subsea 7’s Brazil Territory, said: “We are pleased to have been awarded this important contract and be able to work once again with Shell Brazil, following our contracts for the Bijupirá-Salema and BC-10 Phase 1 developments. Subsea 7 looks forward to working closely with Shell to successfully deliver the work scope in a safe and timely manner.” T&B Petroleum 36 63
big opportunities and achievements in the oil and gas sector Brazil is today a promising horizon in the global oil and gas industry map. Aside from having lived a historic year with the achievement of three bidding rounds for exploration areas, the International Energy Agency pointed the country as one of those that will have greater increase in production volume in the coming years.
Magda Chambriard is Director General of the National Oil, Natural Gas and Biofuels Agency (ANP)
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onsidering only the discoveries already made, especially in the pre-salt area, a production of more than four million barrels daily is expected in the beginning of the 2020 decade. Itâ€™s a monumental leap, which opens opportunities for the whole industry of goods and services and allows us to picture Brazil in a new level of economic and social development. The three bidding rounds held last year, each with a different purpose, marked the beginning of a new era for the oil and gas sector in the country. Focusing on the Brazilian equatorial margin, the 11th Round, held in May, had R$ 2.48 billion (US$ 1.2 billion) in signature bonuses and a minimum commitment of around R$ 5.8 billion (US$ 3 billion) worth of investments in the Minimum Exploration Program, record numbers in the bidding rounds held so far. One hundred and eighteen concession contracts were signed in promising areas of North/Northeast Brazil and EspĂrito Santo. The area granted for exploration increased in more than 60 thousand km2, an increase of 22% compared to the numbers prior to the 11th Round. The Libra field, first area to be auctioned in the production sharing regime, raised R$ 15 billion (US$ 6.5 billion) in signature bonuses and guaranteed an investment commitment of about R$ 600 million (US$ 258 million) in the exploration stage. But that is just a small part of the benefits to the country. Libra is expected to generate investments of up to R$ 130 billion (US$ 60 billion) requiring 12-18 large platforms and 60-90 support vessels, which means orders to the domestic and international industry and generation of jobs in various sectors. At peak production, the Libra field is expected to reach 1.4 million barrels/day, depending on its development speed. That corresponds to more than half the current production in Brazil. ANP estimates that
Photo: T&B Petroleum Image Bank
the “Libra Project” generate revenues up to R$ 1 trillion (US$ 433 billion) over 30 years, for the federal government, states and municipalities in Brazil. Such resources will allow substantial investments in health and education, among other areas. This is why Libra is a structuring project for Brazil. Still in 2013, we had the 12th Round, which was also strategic, focusing on onshore areas with potential for gas production. This round will also provide investments in huge Brazilian sedimentary basins, so far underexplored, like the Paraná basin, for instance. These investments come to meet the need for gas in the country, a product that is increasingly more important in the Brazilian energy mix and worldwide. The three rounds held last year, therefore, were three fundamental steps for Brazil, which needs to guarantee its production and reserves for way beyond 2020. Currently, the country invests six times more in exploration and production than in 2006, when the pre-salt was discovered. Around 400 thousand barrels of oil are extracted per day from that area. Such investments will greatly increase with the development of the areas granted in the bidding rounds. It’s important to note that the potential of Brazil goes beyond the rounds completed. To identify new exploration opportunities, the Agency is consolidating results, reanalyzing areas and collecting information from various sources, such as the ANP Geology and Geophysics Multiannual Plan, autho-
rizations for speculative surveys, and data obtained by concessionaires that are becoming public. The priority of these studies, at the moment, is related to the Brazilian eastern margin, in addition to the basins of São Francisco, Parecis, Paraná and Parnaíba, the latter with a gas production of 5.9 million cubic meters per day in January this year, and good prospects for the future. Seismic surveys, processing and interpretation by operators are also planned in several onshore and offshore basins, especially Barreirinhas, Potiguar Mar, Santos, Pernambuco-Paraíba, Espírito Santo, Foz do Amazonas, Pará-Maranhão, Tucano Sul, Amazonas and Solimões. Brazil is used to dealing with great challenges. The country has doubled its production and reserves of crude oil in the last 15 years and is expected to achieve similar results in half that period. It holds approximately 25% of the exploration and production in deep waters worldwide, comprises immense inland sedimentary basins (one of them already a gas producer in the Northeast region), in addition to the post and pre-salt. A country that already has more than 80 different concessionaires operating in its territory, almost half of them Brazilian, and with a great part of the world’s big oil companies operating in it. This is the Brazil I intend to show in the Offshore Technology Conference (OTC), a country of big opportunities and achievements in the oil and gas sector. T&B Petroleum 36
A new Cais
in the Center of Rio by Orlando Santos
Photos: T&B Petroleum
Thermidor with cream of Gorgonzola caramelized onions, rustic potatoes and mushrooms.
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When Antonio Rodrigues, a businessman from the state of Maranhão, took over the management of the restaurant Cais do Oriente in Rio’s historical center at the beginning of this year, it seemed as though all that was required was to turn up, make some changes to the staff and simply carry on with
business as usual.
n the contrary, the day after signing the contract, a veritable task force of over one hundred laborers, engineers and architects landed at the establishment. Under Antonio’s management, they began the construction of a completely new Cais, creating a new benchmark dining experience in the gastronomic center of Rio’s capital. Antonio knows that this is one of the biggest challenges in his career, during which he has built up a network of 17 successful establishments spread over various areas of the city. The first of these was the Belmonte restaurant located at Flamengo Beach. The restaurant has undergone major refurbishment work and its logo now includes just the name Cais. The exposed brick walls and high ceilings were left untouched, and the interventions carried out enhance the interior of the building even more. The restaurant is now staffed with a highly professional team, with a bilingual receptionist at the door and a new space that combines comfort and high quality gastronomy. This provides the kind of experience enjoyed by employees from nearby companies – the restaurant is located at Rua Visconde de Itaboraí, 8, behind the Post Office on Primeiro de Março –, above all the companies linked to the oil, gas and energy sector, including TN Petróleo.
The restaurant area now features enormous light fixtures by Ganso, a designer from the state of Minas Gerais, which have been fitted and adapted to match the old colonial architecture. Totally redesigned, Cais really does look like a completely different place. The kitchen has also been refurbished, now fitted with a new refrigerator and other furniture. It now also includes an area that is specially acclimatized for the preparation of bread and confectionary. The interior courtyard, usually used to host events, has also been reformed to increase the comfort of the restaurant’s clients. If the so-called “FIFA standards” used to measure the efficiency of such ventures really do exist, it could be said that “Antonio standards” seem to be present in everything the entrepreneur takes on. Some may disagree with the way he administers his bars and restaurants, but nobody can deny that the man has talent! In fact, talent is clearly something that Antonio Rodrigues has plenty of.
A chef with fresh vigor In command of the kitchen at Cais since it reopened, Eduardo Castro knows every corner of the establishment he helped launch 15 years ago and subsequently left, and is now back in full force. The chef doesn’t hide the fact that since the beginning of the year, Cais has been one of the biggest challenges of his career. He considers it a stroke of destiny to have returned to the place he helped to open and manage with fellow chef, Neném, who
went on to stay at the restaurant for over a decade. The menu that he offers prioritizes Brazilian ingredients, as is the case for most new chefs. He has the support of a team of 10 to 15 professionals in order to serve the large
Rua Visconde de Itaboraí, 8 Centro – Rio de Janeiro – RJ Phone: 55 21 2233 2531 www.caisgourmet.com.br
clientele that the restaurant receives every day, and the number of customers is set to grow if the establishment decides to start opening its doors at night as projected. Five chef’s specials are offered during the day, and these are changed on a weekly basis. The public seems to have identified with the new set-up, as the number of customers has increased and they are satisfied with their experience. Isn’t this what any chef would want? T&B Petroleum 36
indicadores meeting tn
14 to 15 – England World National Oil Companies Congress Local: London, England Phone: +44 (0)20 7092 1000 e-mail: firstname.lastname@example.org www.terrapinn.com
15 to 19 – Russia World Petroleum Congress Local: Moscow, Russia Phone/fax: +7 495 739 2854 e-mail: email@example.com www.21wpc.com
2 to 5 – USA LNG Americas Summit Local: San Antonio, TX Phone: +44 20 7978 0018 e-mail: firstname.lastname@example.org
26 to 27 – Argentina Shale Gas World Local: Buenos Aires, Argentina Phone: +44 (0)207 092 1231 e-mail: email@example.com www.terrapinn.com
15 to 18 – Rio de Janeiro Rio Oil & Gas Local: Rio de Janeiro, Brazil Phone: + 55 21 2112-9000 e-mail: firstname.lastname@example.org www.ibp.org.br
17 to 19 – Denmark IGRC 2014 Local: Copenhagen, Denmark Phone: +45 20401405 e-mail: email@example.com www.igrc2014.com
Send your release to: firstname.lastname@example.org
T&B Petroleum 36
by Bruno Musso, Superintendent of the National Petroleum Industry Organization (ONIP)
necessary Fifteen years after the first auctions for exploratory block concession agreements organized by the National Oil, Natural Gas and Biofuels Agency (ANP), Brazil is still seeking out the best way to profit from its oil reserves while also maximizing local content, leveraging the economy and generating jobs and income via the increased participation of local industry.
irstly, it is worth remembering that local content policy for the oil industry is not a Brazilian invention. The literature for this sector – studies, reports, seminars and PowerPoint presentations – are full of examples of both success stories and cases where investments in oil production added nothing to local economies beyond the value of the oil and gas produced. In Brazil’s case, much has been done to increase the local supply of goods and services to meet the demand created by investments in exploration and production, a process that began with the recovery of the national shipping industry in 2000 with the first commissions for the construction of support vessels with Brazilian shipyards. Since then, countless efforts have been made by both the public and private sector to increase local content, although the participation of the Brazilian supply chain still falls short of its full potential. This matter can be analyzed from various angles, but to a certain extent, the decision to discontinue the monopoly held by Petrobras marked the start of a process that is widening the country’s integration with the international community in the world’s most strategic economic segment, impacting not just Petrobras, but the whole Brazilian oil and gas industry. It is worth highlighting that Petrobras had already successfully consolidated itself on the international market to a certain degree. However, the Brazilian supply industry in place to support the company’s activities had little or no commercial links outside the country, with a few rare exceptions.
A swift comparison between the strengthening of the Brazilian oil industry with success stories from other countries leads us to analyze the degree of competitiveness of the nation’s companies, taking into consideration parameters of price, delivery deadlines and quality. From this viewpoint, issues directly linked to decisions made at a company level – such as investment in modernization, product research and development, generation of innovation, management and professional training – need to be separated from those that depend on government action – regulation, incentives, infrastructure and education, as well as macroeconomic variables such as exchange rates, taxes and interest rates. From these comparisons, it can be concluded that the only parallel that can be drawn between Brazil and the countries that “knew how” to profit from investment in order to boost local development is the simple fact that they discovered huge oil reserves. There was no connection between any of the other variables. Productivity levels in the Brazilian private sector are generally below those of the country’s foreign competitors, and similarly, the conditions to which Brazilian industry is submitted mean that direct comparisons should probably be dispensed with altogether. The relative isolation of the Brazilian oil industry, which was created and later developed with its sole focus on the needs of the internal market and a single client, largely explains the difficulties we face today in terms of competition with foreign companies, which themselves are part of a global supply chain. T&B Petroleum 36
feiras opinion e congressos Therefore, one of the numerous variables within the Competitiveness Agenda, consolidated in a 2010 study by ONIP, is the degree of integration that Brazilian industry has with this global supply chain, which today supplies goods and services for projects across the whole world. Paraphrasing an important player in this sector, “Exportation is the litmus test for a company’s competitiveness”. We can follow this line of thinking even further and deduce that companies that acquire space on the international market are those with the highest chance of success within the domestic market. The capacity to export, therefore, goes beyond the commercial dimension as a source of revenues. More than this, it is a matter of strategic importance, as it allows businesses to widen their customer portfolio, reduce the risks
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associated with commission rates falling in a particular market and benefit from economies of scale. Returning to the success stories, the importance of this gaining of new markets as a fundamental element of the industry’s sustainability policy over time is unquestionable. However, it needs to be recognized that a company’s success on the international market is not just a result of the competence and vision of the private sector. Referring once more to the success stories (mainly from the United Kingdom, Norway and Korea), a factor they have in common is the support provided by the state, which plays a significant role in supporting the activities of business by generating jobs and income and increasing taxes, which are then transformed into benefits for society as a whole.
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