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OIL I GAs I BioFUELS

opinion

Establishing a new company in Brazil, by Luiz Cezar Quintans, Brazilian Lawyer at G. Ivo Advogados.

Special 2012 perspective: High optimism Shipyards in full swing OGX: First oil Year XI • May 2012 • Issue 32 • www.tbpetroleum.com.br

Graça Foster, Petrobras and Magda Chambriard, ANP

Made it to the top

Self-lubricating sliding bearings, by Hubert Hilp. Collaboration: Wanderley Egídio and Jorge Amaral

Local Content and the current trends in the Oil & Gas sector, by Paulo Valois and Danielle Ludwig Special interview:

Tommy Bjørnsen, director of Operations South America at DNV

R&D assures more value and quality


BRAZIL

POTENTIAL TO GROW, SECURITY TO INVEST.

Brazil is the most promising exploratory frontier in the world. In addition to pre-salt, with 30 to 50 billion barrels in estimated reserves, the country has 7.5 million km² with potential for onshore and offshore oil & gas, vast expertise in deep-water exploration and production, a developing industry and a growing supply chain. ANP, the National Agency of Petroleum, Natural Gas and Biofuels, based on clear regulations, ensures a reliable environment for business. Invest in Brazil. Invest in the future. www.anp.gov.br


contents

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issue #32 May 2012

special interview

Special interview

Tommy Bjørnsen, Director of Operations South America at DNV

R&D assures

IN THE MID-1990s, WHEN ISO 9000 EMERGED AND

with Tommy Bjørnsen, Director of Operations South America at DNV

DNV BECAME ONE OF

MORE VALUE AND QUALITY

THE BIGGEST PLAYERS IN BRAZIL WITH A BIG

by Maria Fernanda Romero

MARKET SHARE OF ISO 9000 CERTIFICATIONS, FOLLOWED BY ISO 14000,

IN BRAZIL, THE ORGANIZATION INVESTS to find solutions for the challenges of the offshore and oil & gas markets, and sees labor qualification as the biggest and most worrisome hurdle of the sector. Focused on the significance of high investments in research & development (R&D) on a global scale, DNV intends to continue its partnership with universities in Brazil and in the future seeks to enhance its participation with a research center in the country.

AND OTHER STANDARDS

TN Petróleo – What are DNV’s main achievements and accomplishments during its 38 years of operations in Brazil? Tommy Bjørnsen – DNV’s history in Brazil can be divided into four stages: in 1974, when we officially opened our first office in the country, designed to mainly work with fixed platforms in the shallow waters of the Northeast; during the 1980s, when we entered the shipbuilding market, at which time we also began to classify ships built in Brazil; in the mid-1990s, when ISO 9000 emerged and DNV became one of the biggest players in Brazil with a big market share of ISO 9000 certifications, followed by ISO 14000, and other standards successively; and in the 2000s, with the offshore revival, now more focused on deep waters and DNV’s involvement with both offshore platforms and maritime support vessels and in the subsea area. There are many similarities between the deepwater operations in Brazil and those of the North Sea, where DNV has an excellent track record. This is the reason why many Norwegian companies have come to Brazil, have set up operations, are doing well, and more companies continue to come. All the experience that DNV has attained to this point is being adapted to the specific local requirements and is being applied here in Brazil.

About 6% of DNV’s total revenue is invested in R&D worldwide. Do you plan to continue the partnership with Brazilian universities and research centers? How is this going to happen? We maintain partnerships with some Brazilian universities, mainly the Pontifical Catholic University (PUC) and the Federal University

What is DNV’s business priority in South America, notably Brazil? What are the company’s objectives and goals for 2012? DNV’s priority has been the maritime and oil & gas segments. The services we provide focus on the classification, in this case, mainly with the ambitious program to build rigs, FPSOs and maritime support vessels especially for the pre-salt. We also provide other services such as risk analysis, technical analyses and verification of equipment, not related to class. Our objective for 2012 and for the years to come is to enhance our participation in these markets.

of Rio de Janeiro (UFRJ) in some specific projects. At the moment, together with our partners, we are looking into the possibility of financing master’s and doctorate programs for students focused on projects of mutual interest. We also maintain constant communication with Petrobras’s Research Center (Cenpes) (“Centro de Pesquisas

Leopoldo Américo Miguez de Mello”), and other research centers that are being set up at Fundão Island, in the Technology Complex of Rio, for the implementation of R&D in Brazil. Another way we have to apply R&D is through Joint Industry Projects (JIP), a concept in which we identify a market need and, if there is an interest, we manage and coordinate projects with participation from interested companies to identify new standards and new methodologies to simplify the operations of these processes worldwide. Some Brazilian companies have been participating in some JIPs, but what is most interesting is that last year we achieved the first Brazilian JIP solely with domestic companies in order to analyze horizontal directional drilling of pipelines. DNV Brasil employees are coordinating the project. Moreover, throughout the year, our CEO, Henrik O. Madsen finances what he calls ‘extraordinary innovation projects’, which, along with a group

10 T&B Petroleum # 32

T&B Petroleum # 32

16

R&D assures more value and quality

SUCCESSIVELY.

Photos: T&B Petroleum and Glêyser Azevedo

A globally recognized leader in classification and certification, Det Norske Veritas (DNV) has a history of success and significant contributions throughout its 38 years of operations in Brazil.

11

special: 2012 especial: Perspective

High opti mism O

il & natural gas output figures released in February by the National Petroleum, Natural Gas and Biofuels Agency (ANP) adds to the atmosphere of optimism. To be exact, Petrobras along with 24 companies extracted 919 million barrels of oil equivalent (boe) in 2011 from Brazil’s subsoil (offshore and onshore) – Petrobras continues to dominate with some 90% of the

Brazil has many reasons to celebrate the start of 2012. In 2011, oil & gas output was a record-setting 2.66 million barrels of oil equivalent (including natural gas), which exceeded 2010 output levels and 2011 output forecasts. With an average daily output of more than 2.2 million barrels/day of oil and 71 million m3 of natural gas, the oil & gas industry has good reasons to be optimistic for the commodity chain of suppliers of goods and services, which has its eyes on the US$ 225 billion in investments allocated in the Petrobras Business Plan until 2015.

34

High optimism

by Maria Fernanda Romero

output. This is equal to nearly a billion barrels of oil per year. Not surprisingly, the US Energy Information Administration has named Brazil the world’s main oil production frontier by 2030. Compared to 2010, oil output rose 2.5% and natural gas output rose 4.9%. From 2002 to 2011, oil output rose 45% and natural gas output rose 55%. Petrobras has been in the forefront of this evolution: the company’s oil output in Brazil has nearly doubled – from 1.2 million barrels of oil/day

in 2000 to more than 2 million barrels/day in 2011. Petrobras’s total reserves have also risen from 9.6 billion boe (based on SPE/Society Petroleum Engineers criteria) in 2000 to more than 15.7 billion boe in 2011. During this period, Brazil significantly expanded and diversified its energy matrix. However, oil is still responsible for turning the wheels of the economy, despite the world crisis. For the past five years, the oil & gas commodity chain has been quali-

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T&B Petroleum # 32

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Interview with Maria das Graças Silva Foster, Petrobras President

Petrobras

LOCAL CONTENT

and zero leaks

With a projected volume of recoverable oil in the pre-salt layer of some 15 billion barrels of oil equivalent - equal to the total proven reserves of Petrobras - the Brazilian oil company puts into operation the first oil and gas production FPSO in the Gulf of Mexico, betting on its consolidated deepwater expertise in Brazil. by Beatriz Cardoso

Photos: Petrobras Agency

“OUR GOAL IS ZERO LEAKS”, said Maria das Graças Silva Foster, the first woman to become president of Petrobras. In an exclusive interview with T&B Petroleum, Graças Foster said that, in spite of an expected divestment of 13.6 billion in the 20112015 Business Plan, which she sees as normal in any review process, the company will continue to allocate resources in exploration and production in both the pre-salt and post-salt, increasing the local content of its projects, whenever possible. “Our studies indicate that it is possible to increase the local content of some sectors that supply goods and services. However, this requires the secondary chain of suppliers to become part of this significant movement of the industry”, reckons the executive. T&B Petroleum – Petrobras consolidated another milestone in deep waters in early March by initiating production of the Cascade field in the Gulf of Mexico, through an FPSO, the first to operate in the Gulf of Mexico. What does this represent for the company, which is internationally recognized for its deepwater offshore expertise? What is the most significant aspect of the start of production for Petrobras on the world stage? Maria das Graças Silva Foster – The start of production at Cascade

with the FPSO consolidates Petrobras as one of the major international players in deep waters of the Gulf of Mexico, as already occurs in the Brazilian coast. Petrobras is the first company to develop an oil field using these technologies in the Gulf of Mexico. The first FPSO (floating production, storage and offloading platform) operating in the region is capable of processing 80,000 barrels of oil and 500 cubic meters of gas per day and store 500,000 barrels of oil. It has a disconnectable mooring system, which allows it to go sheltered areas during hurricanes and storms, ensuring crew safety and preservation of the environment and integrity of equipment. What makes Petrobras’s management different when it comes to offshore operations, which minimize the risk of incidents such as those that occurred in the Gulf of Mexico (BP) and in Brazil (Chevron)? How do you avoid incidents in offshore operations that are carried out by service firms? Through greater control and supervision of all activities being carried out by contractors in the intervention of a well, for example, or any other action? Our endless goal is to have zero leaks. We created a working group responsible for identifying the best

practices on how to achieve it, improving a set of initiatives that were adopted in the last decade. Petrobras is working proactively to prevent any accidents. We have a culture that prioritizes the operational safety and especially prevention. We invest in extensive training, integrity of facilities and process safety, and require that suppliers do the same. We adopt strict safety standards, which allow the worker to stop if s/he is unclear about something. This is the most important point. All major projects receive a report from the Health, Safety and Environment area for all solutions. Well projects, for example, have best practices that ensure safe operation. Offshore drilling units working for Petrobras are equipped with systems that can provide immediate and automatic closure of the wells, which prevents out of control scenarios. There are gas detectors in key locations of the platforms, alarms linked to the excess of process parameters and wellhead, circulation and fluid injection safety systems. Well closing and control simulations are conducted periodically at which point crew and equipment response times are measured.

T&B Petroleum # 32

ANP’s possession Photos: Courtesy ANP

Interview with Magda Chambriard, general director of the National Petroleum, Natural Gas and Biofuels Agency (ANP) “You’re correct when you say that our laws are too soft. The Law of Penalties was done for the fuel supply and resale sector. It did not include the upstream segment”, states Magda, who took over as ANP general director in a ceremony attended by President Dilma Rousseff, and Petrobras President Graça Foster. “In Magda, Brazil has a symbol of people who are promoted based on merit, ability and dedication”, stated Ms. Roussef during the investiture ceremony of the former Petrobras oil worker who has promised to be rigorous with inspections and punish those who commit violations and accidents. Due to her tough stance, similar to the stance of Petrobras’s president, the market is beginning to say that the Brazilian oil industry is now under the command of iron ladies. And, which is completely adequate for a sector that has such an impact on many different segments of the economy and society.

President Dilma Rousseff and Magda Chambriard

TOUGH STANCE at the ANP

Which bids are first? When? I believe the 11th Round is going to be first. We are still waiting for decisions from the government to carry out the others.

by Beatriz Cardoso

With an impressive record as exploration superintendent at the National Petroleum, Natural Gas and Biofuels Agency (ANP), Magda Chambriard, new general director of the agency is expected to maintain a tough stance, from the well all the way up to the office, literally. 40 T&B Petroleum # 32

TN Petróleo – You have stated that everything is ready for the new bids. Does that apply to the different types of bids: pre-salt, offshore and onshore exploratory blocks, marginal fields? Magda Chambriard – Only the 11th Bidding Round, which was approved by the National Energy Policy Council (CNPE) at the end of April 2011, is ready. We are waiting approval from the Federal Government to go ahead with it. The other rounds are not ready yet. The ANP continues to conduct studies of the areas with oil and gas potential in Brazil. We are expanding our knowledge of the Brazilian subsoil by carrying out the Multiannual Plan. We are planning to invest R$ 1.5 billion from 2007 to 2014 in geological and geophysical studies and surveys of 22 Brazilian sedimentary basins.

In your opinion, which areas are expected to attract the most attention? Or due to the lack of bids during the past three years, is there a huge demand? I believe any area offered in Brazil is going to attract a lot of attention. The oil industry is going

through a very promising moment. We have many areas with huge potential. In Mato Grosso, we have gas seeps in a stretch of 800 meters of Rio Teles Pires. There are also good gas prospects in Maranhão, Piauí and Minas Gerais. I am also very optimistic about onshore sedimentary basins. The pre-salt is a huge attraction, which place carbonate rocks as the most promising at the time. However, some say that there might be surprises in the pre-salt? Do you believe this or has the era of turbidites ended? The Brazilian pre-salt area has the potential for huge discoveries, especially the cluster area of Santos Basin, which has unique geological features that favor the accumulation of huge oil deposits (Lula, Iara, Guará, Franco, Libra, among others). The main geological difference is the presence of a huge structure called the “São Paulo Plateau” and the presence of great layers of salt. The presence of carbonate reservoirs have been known to exist in Campos Basin since the 1980s. Turbidites are common in Campos Basin and huge oil accumulations have been found in this type of reservoir. Reservoirs have excellent permo-porous conditions with good lateral continuity. Brazil has many areas to explore and it is probable

Maria das Graças Foster, Petrobras

Local content and zero leaks

Recently, in a television interview, you stated that Petrobras’s reserves today would be around 31 billion

34 T&B Petroleum # 32

40

Special: 2012 Perspective

mercado aquecido

Perfuração onshore na bacia de Solimões (AM) para a Petrobras

that many discoveries are still going to be made in turbidite reservoirs. In the past, you mentioned other important areas that deserve more attention, such as the Brazilian equatorial margin and the south of the country. What are the prospects for investors in the Brazilian equatorial margin? The Brazilian Equatorial Margin presents a highly promising potential for oil given the numerous findings detected in the sedimentary basins of this region and the production fields of Potiguar basins – offshore and Ceará; confirmed by the recent discoveries off Western Africa and by the offshore discoveries of neighboring countries (Guyana, French Guyana and Suriname). Moreover, the oil detected in these basins is light oil of excellent quality, similar to light Arab oil. Lastly, the Brazilian Equatorial Margin is next to the world’s biggest oil consuming markets (USA and Europe). And what are the attractions in the south of Brazil? Infrastructure; South America’s biggest consumer market. What is ANP’s strategy to incentivize exploration in onshore areas of Brazil? What are the most promising onshore scenarios? To incentivize onshore exploration, the ANP has been systematically investing in the acquisition of new geological and geophysical data through the Multiannual Plan of Geological and Geophysical Studies. The PPA of the ANP was implemented in 2007 and since then the Agency has invested some R$ 500 million. Ten projects are under contract and in progress (3 seismic surveys; 2 geochemical surveys; 3 MT surveys; 1 geological evaluation project, 1 former seismic data processing) that combined amount to T&B Petroleum # 32

41

35

Magda Chambriard, ANP

Tough stance at the ANP


shipbuilding Industry

A

With the boom in the oil & gas industry fueled by Petrobras and other domestic and foreign companies, orders in Brazilian shipyards continue to pick up. Construction of offshore platforms, modules, rigs and vessels is intensifying. New shipyards are springing up in the country to provide more support to this growing industry.

SHIPYARDS IN FULL SWING Photo: Keppel Fels image bank

by Rodrigo Miguez

44 T&B Petroleum # 32

ccording to data of the Brazilian Union of Shipbuilding, Ship repair and Offshore Industries (Sinaval), the number of orders placed with Brazilian shipyards stands at 312 shipbuilding and platform projects, which amount to 6.2 million deadweight tons (DWT). Of the 18 oil-producing platforms under construction, 13 will be built in Brazil. Moreover, 28 rigs for Petrobras are going to be built in Brazil, which changes the notion that this type of equipment could only be made overseas. This opens the way for a new realm of business opportunities for Brazilian shipyards. Financing priorities approved at the two meetings of the Administrative Board of the Merchant Marine Fund (FMM), in 2011, amount to US$ 8.3 billion for shipbuilding and US$ 2.8 billion for the implementation of eight new shipyards and the expansion of three existing ones. In December 2011, the Aliança Offshore industrial unit, which will build blocks for the construction of maritime support ships at Aliança Shipyard, in Niterói (RJ), was inaugurated in São Gonçalo (RJ). According to the Brazilian Association of Shipbuilding and Offshore Companies (Abenav), Brazil’s shipbuilding and offshore industry has recently increased its contribution to the country’s economy, and is headed toward sustainability and international competitiveness. “We estimate that in the near future industry demand will be on average a million tons a year, taking into account the orders of Petrobras until 2020. Considering the shipyards in operation today, expansion projects and new projects being implemented, Brazil T&B Petroleum # 32

44

Leadership in Offshore Class and Related Services

e-mail: absrio@eagle.org • 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

45

shipbuilding Industry

Shipyards in full swing

52

OGX: First Oil

event

Photos: T&B Petroleum Image Bank

Focused on new sector technologies and operational safety, the 43 rd Offshore Technology Conference (OTC) marks the 13 th consecutive participation of the Brazil Pavilion. It is also the first time that Petrobras is not going to have a stand at the event, which has already awarded the company two of the most important international awards.

OTC 2012 Safety is top priority

Exhibition area: 568,000 square feet Visitors: 73,000

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

OTC 2012

56

Companies: 2,400 Contries: 40

by Rodrigo Miguez

S

till feeling the effects of the global crisis that has hit most of the Western world, the Offshore Technology Conference (OTC) brings together players from all over the world to Houston, USA, from April 30 to May 3, to discuss, among other topics, 54 T&B Petroleum # 32

issues of hydrocarbon exploration safety in the new scenarios, such as the pre-salt. The 43rd edition of the world’s main oil & gas offshore sector event, for the first time in a very long time (for at least more than a decade) is not going to have a Petrobras stand, which has been the highlight as one of the most sought after players in the fair.

Petrobras did not disclose why it was not going to reserve an area and simply stated that the decision was made after an internal analysis. Despite not having a stand, with technical sessions and exclusive lectures and visits to assets in the United States, professionals from Petrobras will take part in various technical sessions, presenting works on the challenges and advances made in developing important projects for oil & gas exploration and production in Brazil, for both the pre-salt and post-salt. One of the sessions will be dedicated to Marlim field, with highlight to the subsea separation system used by the company in this mega-reservoir T&B Petroleum # 32

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Safety is top priority article 78 Self-lubricating sliding bearings, by Hubert Hilp. Collaboration: Wanderley Egídio and Jorge Amaral

Year XII • Issue 32 • May 2012 Photos: Petrobras Agency and ANP OIL I GAS I BIOFUELS

opinion

Establishing a new company in Brazil, by Luiz Cezar Quintans, Brazilian Lawyer at G. Ivo Advogados.

Special 2012 perspective: High optimism Shipyards in full swing OGX: First oil Year XI • May 2012 • Issue 32 • www.tbpetroleum.com.br

80 Local Content and the current trends in the Oil & Gas sector, by Paulo Valois and Danielle Ludwig

sections 5 editorial 6 hot news 56 events 64 professional profile 66 company profile

68 products and services 83 meeting 84 coffee break 87 opinion

Graça Foster, Petrobras and Magda Chambriard, ANP

Made it to the top

Self-lubricating sliding bearings, by Hubert Hilp. Collaboration: Wanderley Egídio and Jorge Amaral

Local Content and the current trends in the Oil & Gas sector, by Paulo Valois and Danielle Ludwig Special interview:

Tommy Bjørnsen, director of Operations South America at DNV

R&D assures more value and quality

T&B Petroleum # 32

3


Energy as the main theme. Rio as the scenario. And You as the guest.

Rio Oil & Gas. 30 years. An event not to be missed!

September 17-20, 2012 Riocentro - Rio de Janeiro - Brazil

www.riooilgas.com.br

Gold Sponsorship:

4 T&B Petroleum # 32

Silver Sponsorship:

Bronze Sponsorship:

Copper Sponsorship:

Clube de Ideias

03/12

Organization:


editorial

Rua do Rosário, 99/7º andar Centro – CEP 20041-004 Rio de Janeiro – RJ – Brasil Tel/fax: 55 21 3221-7500 www.tnpetroleo.com.br tnpetroleo@tnpetroleo.com.br PUBLISHER Benício Biz beniciobiz@tnpetroleo.com.br NEW BUSINESS DIRECTOR Lia Medeiros (55 21 8241-1133) liamedeiros@tnpetroleo.com.br EDITOR Beatriz Cardoso (55 21 9617-2360) beatrizcardoso@tnpetroleo.com.br ART and CULTURE EDITOR Orlando Santos (55 21 9491-5468) REPORTER Karolyna Gomes (55 21 9187-7801) karolyna@tnpetroleo.com.br Maria Fernanda Romero (55 21 8867-0837) fernanda@tnpetroleo.com.br Rodrigo Miguez (55 21 9389-9059) rodrigo@tnpetroleo.com.br INTERNATIONAL AFFAIRS Dagmar Brasilio (55 21 9361-2876) dagmar.brasilio@tnpetroleo.com.br GRAPHIC DESIGN Benício Biz (55 21 3221-7500) beniciobiz@tnpetroleo.com.br PRODUCTION GRAPHIC and WEBMASTER Fabiano Reis (55 21 3221-7506) webmaster-tn@tnpetroleo.com.br Marcos Salvador (55 21 3221-7510) marcossalvador@tnpetroleo.com.br TRANSLATION Rick Toledano (55 21 9880-9905) COMERCIAL José Arteiro (55 21 9163-4344) josearteiro@tnpetroleo.com.br

Lorraine Mendes (55 21 8105-2093) lorraine@tnpetroleo.com.br Bruna Guiso (55 21 7682-7074 bruna@tnpetroleo.com.br Lorena Kayser (55 21 7629-3422) lorena@tnpetroleo.com.br Luiz Felipe Pinaud (55 21 7861-4828) l.felipe@tnpetroleo.com.br SUBSCRIPTIONS Rodrigo Matias (55 21 3221-7503) matias@tnpetroleo.com.br PRINT Walprint Gráfica DISTRIBUTION Benício Biz Editores Associados Member of ANATEC The articles are the responsibility of the authors, not necessarily representing the opinion of the editors. T&B Petroleum is directed to engineers, geologists, technicians, researchers and buyers in the oil industry. SEND RELEASES Suggestions of themes or articles should be sent via fax: 55 21 3221-7511 or e-mail: tnpetroleo@tnpetroleo.com.br

Women in power

T

he appointment of two women – who have made their careers in the oil industry and who have strong technical backgrounds – to assume the presidency of Petrobras and the general management of the National Petroleum, Natural Gas and Biofuels Agency (ANP), is much more than a statement of women in power in Brazil, under the leadership of Rousseff: it is confirmation that the industry that has been responsible for economic growth – oil and natural gas – will have, from now on, strong and uncompromising leaders, who are as tough at negotiating as they are in penalizing those who attempt to break the rules of the game. As the first woman to take over the state oil company, which is one of the six largest in the world, engineer Maria das Graças Foster has reiterated more than once that E&P remains a top priority. “The divestment designed by Petrobras in the 2011-2015 Business Plan amounts to US$ 13.6 billion is not restricted to any segment or business area of the company. Most investments (57%) are dedicated to offshore exploration and development”. With a reputation of being a tough negotiator, Graças Foster has made clear that she intends to ‘step on the gas’ in reference to the Mobilization Program for National Oil and Natural Gas (Prominp), to meet local content requirements and advance projects in the refining and fertilizers area. Behind the scenes, besides using all of the company’s purchasing power to obtain more competitive prices and better results, she is going to demand better delivery terms from suppliers. Civil engineer Magda Chambriard, who was appointed by President Dilma without major opposition from Congress, has indicated that she intends to maintain the same

unyielding posture of when she was the Agency’s Superintendent of Exploration: firm action-taker, penalizing those who do wrong with little patience to hear excuses in the event of incidents such as Chevron’s, or of irregularities in the sale of fuel. This can be seen in this issue’s exclusive TN Petróleo interview. Under the control of these two ladies, the oil & gas industry will continue to drive the Brazilian economy. The Organization of Petroleum Exporting Countries (OPEC), which accounts for 30% of world output, whose projected increase in demand had a small drop in the first quarter, credits the growth to countries outside the Organization for Economic Cooperation and Development (OECD), including China and Latin America, especially Brazil. Brazil’s output continues to rise, higher than demand, achieving consecutive records in both oil and natural gas, as reported by the National Petroleum, Natural Gas and Biofuels Agency (ANP). These factors have lead the market to have optimistic expectations for 2012, as evidenced by the cover story in this edition of T&B Petroleum, which listened to representatives of various segments of the oil & gas commodity chain. Even the 2.7% growth in the Brazilian GDP in 2011 did not upset this optimism: despite being well below that of 2010, the country took over as the 6th largest economy in the world, surpassing Britain. It is against this background that the country effectively gets set to start 2012, hoping that the ‘season’ of delays or uncertainties about the distribution of royalties, new bids for areas and for projects has come to an end, which endangers this important sector of the Brazilian economy. This is just the first challenge.

Benício Biz, Publisher

T&B Petroleum # 32

5


hot news

BP grows Brazilian presence with four deepwater E&P concessions BP announced that the Brazilian National Petroleum Agency (ANP) has approved its farm-in to four deepwater exploration and production concessions operated by Petrobras in the Brazilian equatorial margin. BP Energy do Brasil is taking a 40 percent interest in each of the blocks located in the Barreirinhas and Ceará basins from Petrobras. The move will give BP access to four new concession blocks in Brazil: BM-BAR-3 and BM-BAR-5 in the Barreirinhas basin, and BM-CE-1 and BMCE-2 in the Ceará basin. Together, the blocks cover a total area of 816 square miles (2,113 square kilometers). “BP is building on our strengths in exploration and the deepwater and

these four new blocks bring exciting new exploration opportunities, adding to the already significant position we hold in Brazil,” said Bob Dudley, BP group chief executive. “I am pleased that this also deepens our strong relationship with Petrobras, one of the world’s leading deepwater operators.” “Over the past year, in addition to acquiring 10 upstream concessions from Devon Energy in May, we have made major investments in biofuels and expanded our aviation business in

Brazil. I am delighted with this continued growth of our presence in Brazil,” said Guillermo Quintero, BP Brazil President. Following the farm-in, BP will hold concessions in 14 blocks in Brazil, operating six. BP will be a partner with Petrobras in nine of these concession areas: the Xerelete field, BM-C-34 and BM-C-35 (in the Campos basin); BT-PN-2 and BT-PN-3 (in the Parnaíba basin); BM-BAR-3 and BM-BAR-5 (in the Barreirinhas basin) and BM-CE-1 and BM-CE-2 (in Ceará basin).

Petrobras: third unit for gas plant in Bolivia With an investment of US$ 115 million, Petrobras Bolivia (35%, the operator of the San Antonio Block), in partnership with YPFB Andina (50%) and Total (15%), inaugurated the third natural gas processing unit - known as the “Third Train” - at the Sábalo Gas Plant. The president of Bolivia, Evo Morales, the Bolivian Hydrocarbons and Energy Minister, Juan José Sosa, and the CEO of YPFB, Carlos Villegas, attended the ceremony held on February 28. This undertaking materializes the commitments made for the second phase of the Development Plan approved for the Sábalo field, which includes the drilling of three wells (SBL7, SBL-8 and SBL-9), the first of which went on stream last December. The other two are expected to start producing in 2012 and 2014, respectively. The Plan, which had a total cost of approximately US$ 300 million to be implemented, also called for the revamp of the existing trains I and II. Since January 2011, the project al-

6 T&B Petroleum # 32

lowed gas production to be increased by 15%, equivalent to more than 2 million cubic meters per day (MMm³/d). Together with the two existing trains, the Third Train at the Sábalo Gas Plant eliminates contaminants and separates and stabilizes the gas before it is delivered to YPFB which, in turn, supplies the product to both the domestic and foreign markets. The processing capacity is 6.7 MMm³/d. With the plant coming on stream, production at the San Antonio Block

rose to 17 MMm³/d in January 2012. As of next June, when well SBL-8 is scheduled for completion, the production volume will reach 19 MMm³/d. There will also be a positive impact on the production of liquids, which is slated to increase from 16,900 to 20,000 barrels per day as of June 2012. The third natural gas processing unit is fitted with an innovative high-tech control system. Operations got underway after tests to check the gas output quality, as well as the engines and safety systems capacity, were approved. Managed by Petrobras Bolivia, the works demanded more than 2.9 million man-hours to be completed. During this period, there was no record of any incident causing sick leave injuries; demonstrating not only the high level of commitment to and compliance with the health, safety and environment standards that govern the Company’s operations, but also the contractors’ adjustments to working under this system.


Maersk Supply Service wins three major contracts in Brazil Maersk Supply Service has won three new major contracts with the Brazilian state owned oil company Petrobras. The total contract value is approximately DKK 1.6 billion. All three contracts will have a duration of four years commencing December 2012 and include anchor handling tug supply vessels Maersk Leader, Maersk Lancer and Maersk Launcher. The vessels will be involved in ultra deep water anchor handling with both conventional and torpedo anchors. “Brazil is a strategically important growth market for Maersk Supply Service, and these contracts reinforce our strong relationship with one of the industry leaders in deep water exploration and production,” says Carsten Plougmann Andersen, CEO of Maersk Supply Service. Maersk Sup-

ply Service has a significant position in the Brazilian market with currently 11 vessels operating offshore Brazil for Petrobras and 5 vessels for International Oil Companies. “We have been working with Petrobras since 1977 in ever increasing water depths requiring high safety, environmenta, specialized operational performance and the most advanced and powerful vessels. We look forward to continue the deep water-journey together,” Carsten Plougmann Andersen says.

OGX delivers first shipment of Waimea oil to Shell OGX, the Brazilian oil and gas company responsible for the largest private-sector exploratory campaign in Brazil, thas delivered its first shipment of approximately 600,000 barrels of oil to Shell Western Supply and Trading Ltd. (“Shell”). On March 27, 2012, the company initiated the process of offloading the first shipment of OGX’s oil. At the conclusion of the procedure, a Bill of Lading was issued certifying that the shuttle tanker had taken possession of the oil. This shipment is bound for Europe, where Shell intends to

process the oil in one of its refineries. On October 2011, OGX signed its first sales contract with the AngloDutch partner, for the delivery of 1.2 million barrels of oil in two batches of 600,000 barrels each. “The shipment of the first batch of oil to Shell represents the beginning of OGX’s cash generation and an important step towards the establishment of the Company as a major player in global E&P,” commented Paulo Mendonça, general Officer and Exploration Officer of OGX.

Skanska to expand natural gas plant in Rio de Janeiro

Skanska has been awarded an Engineering, Procurement and Construction contract to increase in 25 percent of the natural gas treatment & compression capacity of the Cabiúnas Terminal (TECAB) in Rio de Janeiro, Brazil. The total amount of the contract is R$1.3 billion, of which Skanska’s share is 33%, amounting to a total of R$450 million. The customer is Petrobras, one of the world’s leading Oil & Gas companies and one of Skanska’s repeat customers. Skanska will lead the consortium responsible for the detailed engineering and construction of the facilities, including civil works and electromechanical installations. The contract also encompasses the procurement of equipment and materials and Skanska will also provide technical assistance for the commissioning and the start-up phases of the various units within the new plant. The project relates to increase the natural gas processing capacity of the Cabiúnas Terminal (TECAB) in more than five million cubic meters/day by means of the installation of seven new processing units and their respective interconnections with the existing units (off-sites). It will also take the advantage of utilizing the natural gas produced by the so-called “Pre-Salt” oil and gas fields explored by Petrobras. Works are scheduled to commence immediately and the project is expected to be completed in the fourth quarter of 2014.

T&B Petroleum # 32

7


hot news

Mayors of Rio and Houston sign cooperation agreement Accompanied by a delegation consisting of about 25 U.S. business leaders, Paes and Parker signed a Bilateral Agreement Partner Cities, aiming to increase the levels of cooperation and commercial activities between the two cities. The agreement is based on multiplying the business opportunities in education, health, logistics, sustainability and information technology in the energy sector and oil and gas. “Rio and Houston have common interests and are strengthening our ties in the areas of trade and exchange of knowledge and technology will bring benefits to the residents of both cities”, said Paes. “I know of many cities in the world that just discovered Brazil. But I remember that for us, this relationship is not new. Houston grew connecting businesses. And we’re not only interested in investing in the country, but also to take Brazilian companies there”, said Parker. During the morning, the mayor of Houston was at the offices of AmCham-Rio (American Chamber of Commerce Brazil-United States), for a presentation

Photo: Courtesy

Mayor of Houston, Annise Parker, came to Rio to meet the mayor Eduardo Paes, which took place in the early afternoon of March 28th, at the City Palace.

of Rio Negócios and the American Chamber of Commerce, and exploring business opportunities between Houston and Rio. The chief executive of Rio Negócios, Marcelo Haddad, elaborated on areas of investment opportunities and the work Rio Negócios Agency does facilitating business. “Rio is a global city. Last year, 37% of work visas issued in Brazil came to the city. We see a strong correlation be-

tween lifestyle and innovation”, said Marcelo. Jeff Moseley, president of the Greater Houston Partnership, a Houston organization that operates along the lines of Rio Negócios, liked the opportunity for interaction between the energy capital of Brazil and the United States – and members of the World Energy Cities Partnership, a group that gathers cities leaders in the Energy sector.

T&B Petroleum Newsletter Every week, on your computer screen, the news from the shipbuilding and offshore industry. Subscribe at www.tbpetroleum.com.br 8 T&B Petroleum # 32


Georadar Holding receives R$ 143 million from BNDES The total value is the highest ever released to oil and gas companies since the development of O&G program from BNDES (National Bank for Economic and Social Development) and it will be applied in seismic projects bidden by ANP (Brazil’s National Petroleum Agency) The National Bank for Economic and Social Development (BNDES) has approved a transfer of R$ 143 million to Georadar, a company which is specialized in onshore and offshore jobs for geophysical surveys, via the Support Program to the Development of Goods and Services Supply Chain related to Oil and Gas (O&G BNDES). This is the biggest operation involving large and medium-sized companies ever since the creation of the program (in September, 2011), which will pay out R$ 4 billion in the next four years, and it is the first one carried out through a transfer by a financial institution – Brazil Bank. The money will be applied in three projects in the north of the country, two from Brazil’s Natio-

nal Petroleum Agency (ANP) and another one called ESPEC, from a consortium between Petrobras and a Portuguese company, Petrogal, developing in Amazonia. The seismic studies for ANP in Acre, in Cruzeiro do Sul region, start this semester with a team of 500 people, and they will be concluded this year. In Para, Georadar was given the environmental permit by the governor Simão Jatene to begin the project around Santarem, which should also involve 500 professionals. The job will be finalized in 2012. According to the financial director of Georadar Holding, Luiz Nagata, several national companies from the oil and gas chain

need financial support to meet demands from the sector, dominated by multinationals. “Foreign companies have access to credit abroad. The new line of BNDES creates financing opportunities for Brazilian companies at a moment of high demand”, he states. “The loan also means that Georadar conquered space and credibility with BNDES, and it is acknowledged by its outcomes, services, performance and governance policy. Our portfolio of projects for 2012 is estimated in R$ 600 million, which is a significant value”, says Nagata. The contracts also reinforce the company ’s goals to operate abroad. “We are studying the opportunities in Paraguai and Angola”, affirms the CEO.

Saudi Arabia International Oil & Gas Exhibition SAOGE 2012, the 4th edition will take place from 24-26 September 2012 and continues to be the largest oil & gas industry exhibition, ever staged in Saudi Arabia, offering clients unique access to the regions oil and gas sector.   The 3rd Saudi Arabia International Oil and Gas Exhibition (SAOGE 2010) was held on 10-12 October 2010 at the Dhahran International Exhibitions Center in Dammam, Kingdom of Saudi Arabia.   Under the patronage of His Royal Highness Prince Mohammed bin Fahd bin Ab-

SAOGE 2010 Statistics Total Exhibition Space: 9250 sqm - 15% growth! Total Exhibiting Companies: 254 Number of Countries represented: 34 Total Participating attendees: 7797  dul Aziz, Emir of the Eastern Region, SAOGE 2010 was opened by Mr. Zareeb bin Saeed Al-Qahtani, Under-Secretary of the Eastern Province. 2010 SAOGE drew

its largest ever attendance, with over 260 companies and an excellent global representation from 34 countries.  After a very successful 23% increase, which was witnessed in 2009 - with over 6800 industry representatives present, SAOGE 2010 exceeded expectations with a record attendance of 7,797 and additional growth of 15%. Building on the continued growth of SAOGE 2010, exhibitors are booking their places for the next edition. T&B Petroleum # 32

9


special interview

R&D assures

more value and quality by Maria Fernanda Romero

A globally recognized leader in classification and certification, Det Norske Veritas (DNV) has a history of success and significant contributions throughout its 38 years of operations in Brazil.

In Brazil, the organization invests to find solutions for the challenges of the offshore and oil & gas markets, and sees labor qualification as the biggest and most worrisome hurdle of the sector. Focused on the significance of high investments in research & development (R&D) on a global scale, DNV intends to continue its partnership with universities in Brazil and in the future seeks to enhance its participation with a research center in the country. TN Petróleo – What are DNV’s main achievements and accomplishments during its 38 years of operations in Brazil? Tommy Bjørnsen – DNV’s history in Brazil can be divided into four stages: in 1974, when we officially opened our first office in the country, designed to mainly work with fixed platforms in the shallow waters of the Northeast; during the 1980s, when we entered the shipbuilding market, at which time we also began to classify ships built in Brazil; in the mid-1990s, when ISO 9000 emerged and DNV became one of the biggest players in Brazil with a big market share of ISO 9000 certifications, followed by ISO 14000, and other standards successively; and in the 2000s, with the offshore revival, now more focused on deep waters and DNV’s involvement with both offshore platforms and maritime support vessels and in the subsea area. There are many similarities between the deepwater operations in Brazil and those of the North Sea, where DNV has an excellent track record. This is the reason why many Norwegian companies have come to Brazil, have set up operations, are doing well, and more companies continue to come. All the experience that DNV has attained to this point is being adapted to the specific local requirements and is being applied here in Brazil. What is DNV’s business priority in South America, notably Brazil? What are the company’s objectives and goals for 2012? DNV’s priority has been the maritime and oil & gas segments. The services we provide focus on the classification, in this case, mainly with the ambitious program to build rigs, FPSOs and maritime support vessels especially for the pre-salt. We also provide other services such as risk analysis, technical analyses and verification of equipment, not related to class. Our objective for 2012 and for the years to come is to enhance our participation in these markets.

10 T&B Petroleum # 32


Tommy Bjørnsen, Director of Operations South America at DNV

In the mid-1990s, when ISO 9000 emerged and DNV became one of the biggest players in Brazil with a big market share of ISO 9000 certifications, followed by ISO 14000, and other standards

Photos: T&B Petroleum and Glêyser Azevedo

successively.

About 6% of DNV’s total revenue is invested in R&D worldwide. Do you plan to continue the partnership with Brazilian universities and research centers? How is this going to happen? We maintain partnerships with some Brazilian universities, mainly the Pontifical Catholic University (PUC) and the Federal University

of Rio de Janeiro (UFRJ) in some specific projects. At the moment, together with our partners, we are looking into the possibility of financing master’s and doctorate programs for students focused on projects of mutual interest. We also maintain constant communication with Petrobras’s Research Center (Cenpes) (“Centro de Pesquisas

Leopoldo Américo Miguez de Mello”), and other research centers that are being set up at Fundão Island, in the Technology Complex of Rio, for the implementation of R&D in Brazil. Another way we have to apply R&D is through Joint Industry Projects (JIP), a concept in which we identify a market need and, if there is an interest, we manage and coordinate projects with participation from interested companies to identify new standards and new methodologies to simplify the operations of these processes worldwide. Some Brazilian companies have been participating in some JIPs, but what is most interesting is that last year we achieved the first Brazilian JIP solely with domestic companies in order to analyze horizontal directional drilling of pipelines. DNV Brasil employees are coordinating the project. Moreover, throughout the year, our CEO, Henrik O. Madsen finances what he calls ‘extraordinary innovation projects’, which, along with a group T&B Petroleum # 32

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special interview

of DNV employees, identify market needs. A group of DNV professionals with distinct specializations is then assigned to analyze the matter and, in the short run (four to five months), comes up with an ‘extraordinary concept’ that can be applied in the short run. An example is project X-Stream, a concept for a deepwater gas pipeline, which adjusted some existing technologies in order to reduce pipeline thickness and reduce installation costs, while maintaining a level of safety. We launched this project in London and Houston (USA) at the beginning of the year and we are going to launch it in Brazil on March 13. In January 2012, DNV inaugurated a deepwater technology center in Singapore. Is DNV thinking of opening a similar center in Brazil in light of the country’s growing deepwater market? Yes, we are keen on opening a research center in Brazil; however, one of our challenges is to achieve the maximum return from the current situation in which many companies are investing in R&D. We realized that one of our main problems is going to be skilled laboratorial labor and researchers. However, we are seriously considering opening a DNV center in 12 T&B Petroleum # 32

we are keen on opening a research center in Brazil; however, one of our challenges is to achieve the maximum return from the current situation in which many companies are investing in R&D. We realized that one of our main problems is going to be skilled laboratorial labor and researchers.

Brazil, which will focus on deepwater operating challenges, above all, in the pre-salt. Concerning Brazilian legislation, what are the main deficiencies or challenges regarding market regulations? How do they affect the activities and services provided by DNV? The regulations of the National Petroleum, Natural Gas and Biofuels Agency (ANP) that came into effect in the past few years were a big step toward enacting more specific market legislation. After the accident at Macondo, in the Gulf of Mexico, DNV conducted some studies on the matter. One of the studies was a comparison between the Norwegian regulatory system and the American regulatory system. The

other was a study that disclosed aspects that the DNV deems relevant to be part of a more effective offshore safety regulatory system. Last year, we did something similar by comparing DNV’s view against the Brazilian regulation. We noticed that here the regulations are more advanced than in other countries, but we also noticed that there is still room for improvement and we realize that it is important for the ANP to communicate with the industry in order to make adjustments. Which DNV certified projects in Brazil would you consider innovative? Why? Some examples are: the new exportation system of the Guará and Lula NE fields through submerged buoy; the first steel catenary riser installed in platform P-55, which includes new materials such as clads; the riser of P-52, the first hybrid riser installed in Brazil; P-51, the first semisubmersible platform built entirely in Brazil; the first pipe laying ship; the largest ships built in Brazil, Docefjord and Tijuca at 305,000 deadweight tons. All are considered innovative because they are the first and/or the biggest in the sector. Do you know how many vessels and platforms DNV have classified in Brazil? Rather than talk about numbers we need to talk about market share. Our market share varies according to sector units, we do not have an exact number for each one, but we reckon that DNV’s market share in Brazil ranges from 20% to 60%. If we include the number of merchant vessels, we are close to 20%, and we have 60% of the maritime support vessels in the Brazilian market. We realize that this is a significant volume, considering the market.


R&D assures more value and quality

What are the greatest challenges for classifying new projects, such as deepwater and ultra deepwater platforms? Has Brazil ‘created’ or required the creation of new international classification rules due to the accelerated pace of project development (such as the FPSOs, which are widespread in Brazil). The challenge for the classification societies is similar to that of the industry, which is mainly the lack of skilled labor. The issue is how Brazil as a whole is going to satisfy this demand for skilled labor. Our contribution in this new bold construction plan focuses on providing assistance, participating along with shipbuilders, in order to execute construction projects and make sure they operate with the necessary level of quality to prevent problems. Our experience in Asia has shown that another critical point is the commissioning of units, because their construction is incorporated with increasingly complex systems. In this regard, DNV was the first classification society to launch a specific notation called Integrated Software Dependent Systems (ISDS), which seeks to integrate the communication between the systems employed in a platform, thus facilitating the test period. How can classification help ‘safety’ and risk management? The very own philosophy of classification is based on risk management, which is guided by experience acquired over the years, combined with technological development. This exercise takes place by evaluating the critical elements during the approval stages of offshore unit and ship projects, certification of main components, monitoring during construction and operation. Therefore, classification can help ‘safety’ and risk manage-

ment, because since the classification society is an independent and neutral entity, we can verify if the main aspects of the vessels were evaluated and accepted for a specific established standard. Does the sector’s local content requirement make it harder for foreign companies to do business in Brazil? Local content is not exclusive to Brazil; other countries have similar requirements. We think this policy allows foreign companies to do business and grow in Brazil, which is a positive thing. The biggest challenge we see is how to supply a labor force for a huge number of fast-paced projects. The policy in itself does not make it harder; the challenge is how to supply skilled labor in the necessary amount and speed, but the policy is an opportunity to improve our industrial complex and create jobs and taxes. DNV and Kema created a leading global company in consultancy and certification services in clean energy, sustainability, power generation, transmission and distribution. How is this company going to operate in Brazil? The new company, DNV Kema Energia e Sustentabilidade, began operating on March 1. It has 1,800 employees from Kema and an additional 500 employees from the sustainability and renewable energy area of DNV, which add up to 2,300 employees worldwide. Kema already operates in Brazil and we are now going to combine our personnel from these areas to establish the new company’s office in Brazil. Services encompass the energy value chain from the source up to the final user, including renewables, reduction of carbon emissions and energy efficiency, generation, transmission

and distribution, in addition to tests, inspection and certification. What are the main contracts that currently involve DNV? In the risk management and analysis area, we have contracts with Petrobras and rig operators aimed at achieving satisfactory performance in aspects of safety and health. The reliability studies for Petrobras, which are designed to improve operational performance, are also worthy of mention. In the subsea area, the verification of the pre-salt exportation system through submerged buoy. In the class service, we are mainly classifying the construction of maritime support vessels, currently in five shipyards, and FPSOs P-58 and P-62, which are being converted by Queiroz Galvão (Rio Grande) and Camargo Corrêa-Iesa (Suape), respectively. In the certification of materials and components, our main contract today is to supply the needs of P-58 and P-62. In certification, we have the contract for the regasification plant of the Bahia terminal for Petrobras and the contract of the first five fixed platforms for OSX. In the technical analyses area, we have the Gien project with Petrobras. Another important activity that has experienced significant growth is the certification of offshore containers. Moreover, we are highly involved with services related to the verification of the local content, since DNV is ANP authorized to certify local content requirements. In which phase is the certification process of the regasification plant of the Bahia terminal for Petrobras? And the classification of FPSOs, P-58 and P-62? We have completed the certification of the basic project of the Bahia terminal and we are waiting on the detailed project for certificaT&B Petroleum # 32

13


special interview tion; then, construction is going to get underway, which we are going to monitor to certify the terminal, including the civil engineering part (pier), expected to be completed by December 2013. Regarding FPSOs P-58 and P-62, both hulls arrived in their respective shipyards in Rio Grande and Suape last year, and we are now verifying conformity of the new phase, which is the construction of the top sides, integration and commissioning, and in parallel, certifying materials and components. With the execution of a classification service contract with Eisa for four Supply Vessels, DNV Brasil broke two records: 17 contracts executed in one year and the most contracts with the same company (ten contracts with Eisa). What is the significance of this contract for DNV? What kind of business is expected to take place with Eisa in 2012? These two records are very important, but they serve as recognition of a job well done and of the dedication of our employees at

Area, we have certified three regasification terminals: Bahia, Pecém and Guanabara Bay. We also classified the ships of the two regasification UNITS.

the shipyards. These contracts are essential because they provide a vision of sustainability; if there is increased demand, you can achieve the necessary skilled labor capacity with a long-term perspective. We can honestly say that today we broke another record in January,

OPERATIONS IN BRAZIL With offices in Rio de Janeiro, São Paulo, Salvador, Santos, Macaé and Caxias do Sul, in addition to providing classification, technical consultancy, risk analysis consultancy, and verification services for the maritime and oil & gas markets, DNV has a highly competent professional staff of about 300 professionals, of which 63% are college graduates, 26% have master’s degrees and 4% have doctorates. DNV also provides services for the industry as a whole in the following areas: certification of management systems; clean development mechanism; renewable 14 T&B Petroleum # 32

energies, and in the commercial area; technical support and naval engineering software training and risk & reliability. Now, with DNV Kema, we provide services in power generation, transmission and distribution, as well as energy efficiency. Main projects in progress • Classification of FPSO (P-58 and P-62) conversion for Petrobras, including approval of plans, certification of materials and components, verification of top

What has DNV done in the natural gas area in Brazil? What does the company do to secure the supply of gas? In the natural gas area, we have certified three regasification terminals: Bahia, Pecém and Guanabara Bay. We also classified the ships of the two regasification units already operating in Brazil. We are conducting a long-term study designed to evaluate the necessary improvements to optimize the natural gas network of Petrobras and, consequently, secure the supply of gas. How about in the thermoelectric area? In this area, we are focused on reliability and availability studies. We have conducted a pilot study for one of the units, and we plan to expand to other units of Petrobras.

Photo P-56: Petrobras Agency

DNV today in Brazil

when we executed a contract with ETP to classify the construction of 12 FSV (Fast Supply Vessel). It is the first time we executed a contract for 12 units.

side construction, integration and commissioning. • Verification of project and construction of four new submerged buoy systems for exportation at Guará and Lula NE fields for Subsea 7. • Naval Engineering Integrated Management for DNV classified floating offshore units for Petrobras. • Technical services applied for optimization, reliability and availability studies of process and power generation units for Petrobras. • Certification of the Bahia Regasification Terminal for Petrobras. • Certification of the two first fixed platforms for OSX. • Construction classification of many sophisticated maritime support vessels in five shipyards for different operators.


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T&B Petroleum # 32

15


special: 2012 especial: Perspective

Perfuração onshore na bacia de Solimões (AM) para a Petrobras

High opti Brazil has many reasons to celebrate the start of 2012. In 2011, oil & gas output was a record-setting 2.66 million barrels of oil equivalent (including natural gas), which exceeded 2010 output levels and 2011 output forecasts. With an average daily output of more than 2.2 million barrels/day of oil and 71 million m3 of natural gas, the oil & gas industry has good reasons to be optimistic for the commodity chain of suppliers of goods and services, which has its eyes on the US$ 225 billion in investments allocated in the Petrobras Business Plan until 2015. 16 T&B Petroleum # 32


mercado aquecido

mism O

il & natural gas output figures released in February by the National Petroleum, Natural Gas and Biofuels Agency (ANP) adds to the atmosphere of optimism. To be exact, Petrobras along with 24 companies extracted 919 million barrels of oil equivalent (boe) in 2011 from Brazil’s subsoil (offshore and onshore) – Petrobras continues to dominate with some 90% of the

by Maria Fernanda Romero

output. This is equal to nearly a billion barrels of oil per year. Not surprisingly, the US Energy Information Administration has named Brazil the world’s main oil production frontier by 2030. Compared to 2010, oil output rose 2.5% and natural gas output rose 4.9%. From 2002 to 2011, oil output rose 45% and natural gas output rose 55%. Petrobras has been in the forefront of this evolution: the company’s oil output in Brazil has nearly doubled – from 1.2 million barrels of oil/day

in 2000 to more than 2 million barrels/day in 2011. Petrobras’s total reserves have also risen from 9.6 billion boe (based on SPE/Society Petroleum Engineers criteria) in 2000 to more than 15.7 billion boe in 2011. During this period, Brazil significantly expanded and diversified its energy matrix. However, oil is still responsible for turning the wheels of the economy, despite the world crisis. For the past five years, the oil & gas commodity chain has been qualiT&B Petroleum # 32

17


special: 2012 Perspective fying itself in order to capture a bigger share of the investments of Petrobras. The growth of resources has created many opportunities for expansion of the whole sector, ranging from suppliers of goods and services in the exploration and production stages (E&P) to undertakers of projects in the petrochemical and shipbuilding sectors. Today, the shipbuilding industry has a large number of orders for platforms, support vessels and oil tankers. A study released by Robert Half, a recruitment consultancy, found that the wave of business optimism will persist in 2012. According to the study, businesspeople are more willing to continue to invest in Brazil. The study foresees a significant rise in new oil, gas & energy contracts in light of the opportunities and emergence of new careers. Moreover, the consultancy adds that most Brazilian businesspeople expect the World Cup, Olympics and pre-salt investments to significantly improve Brazil’s economy – further fueling the oil-driven atmosphere of optimism and the number of orders and discoveries. In January and February of 2012, Petrobras announced new discoveries in Espírito Santo (Golfinho Field), Amazonas (Solimões Basin), Campos Basin (Pão de Açúcar prospect) and Santos Basin (Carioca Sela area), where commerciality was declared at Tiro and Sidon fields.

Sector will absorb large volume of resources At the start of last year, the president of the Brazilian Devel18 T&B Petroleum # 32

opment Bank (BNDES), Luciano Coutinho, forecasted investments equivalent to 23% of GDP (Gross Domestic Product) by 2014: a sum of R$ 3.2 trillion. “This is an appropriate figure to support long-term economic growth without causing inflationary pressures. The funds include pulverized investments, such as those carried out by small companies, in construction, industrial and infrastructure projects”, stated Mr. Coutinho. According to Mr. Coutinho, Brazil is experiencing a solid cycle of growth, with job creation and income distribution, which leads to many business opportunities with guaranteed return and reduced risk. “There area many areas of interest, especially in oil & natural gas, energy and logistics, and solid infrastructure opportunities – notably ports and railways”. The most recent BNDES study states that most of the investments in Brazil during the next three years will be directed towards the oil & gas industry: the sector is expected to receive R$ 378 billion during this period in the exploration, production, refining, transport, gas and energy segments. Some R$ 614 billion is expected to be invested until 2014 in the oil & gas, mineral extraction, steel making, chemical, paper and cellulose, automobile, electro-electronic and textile/clothing industries. In other words, according to BNDES, 62% of the estimated amount is expected to go to the oil & gas segment.

Loans BNDES expenditures amounted to R$ 140 billion in

2011, down 17% from 2010 (R$ 168.4 billion). Last year, oil & fuel projects received R$ 4.5 billion and R$ 16.3 billion was spent in electricity and gas projects. According to BNDES, its most emblematic energy projects (unfinished) in the sector were hydroelectric plants Santo Antônio and Jirau, in addition to a solid investment portfolio in wind power. Among which are 26 wind energy farms in the Northeast totaling R$ 1.8 billion in financing. In the oil & gas area, Petrobras received funds for the construction of fixed maritime platform PMXL-1, which has the capacity to produce 15 million m³/day of natural gas, installed at Mexilhão Field. Other projects were financed such as the Alberto Pasqualini Refinery (Refap) for the implementation of a new diesel current hydrotreatment unit UHDT II and a new hydrogen generation unit UGH II for the production of hydrotreated diesel with reduced sulphur content and implementation and modification of systems and auxiliary facilities at Parque Indal da Beneficiária in Canoas (RS). In addition to direct lines of credit to oil & gas and of the Merchant Marine Fund (FMM), BNDES has the BNDES P&G Program dedicated to the chain of suppliers of the oil & gas industry. The program supports projects that increase the installed capacity of the industry, installation of new units and expansion and modernization of existing ones. Besides, offering lines to technological innovation projects. It also supports the internationalization of Brazilian companies and mergers and acquisitions of companies, primarily


high optimism

through equity investments. Another possibility is the financing for working capital of suppliers of goods and services for the P&G sector, which have executed a contract with medium-size companies of the sector. Moreover, BNDES reported net income of R$ 9 billion in 2011. Gross income (before taxes and administrative expenses) was influenced by the good performance of credit and variable income portfolios, which contributed for 94% of profits. The bond portfolio also had a positive impact, accounting for 6% of the bank’s income last year.

Federal Savings Bank (Caixa Econômica Federal) Credit transactions for Brazil’s Federal Savings Bank for the oil & gas sector amounted to R$ 10 billion in 2011. According to the bank, more than R$ 12 billion is expected to be allocated this year. The amount represents all the projects under analysis by the bank. It is estimated that some R$ 22.5 billion is going to be allocated to the oil, gas & shipbuilding sectors in 2012. According to the bank, some R$ 600 million has been loaned to big business groups for the financing of structure investments. An additional R$ 371 million from the Merchant Marine Fund (FMM) were invested in Transpetro’s ethanol transportation project by barges. Operations of the “Progedir Portal”, which allows suppliers of Petrobras and suppliers of the commodity chain related to Petrobras to receive advance payment from Petrobras totaled R$ 675 million.

R$ 378 bn The sector is expected to receive during this period in the exploration, production, refining, transport, gas and energy segments. According to regional superintendent, Eugênia Regina de Melo, who is responsible for the bank’s oil & gas superintendence, in 2011 the bank approved projects related to the oil, gas and shipbuilding industry to the tune of R$ 4.9 billion. In energy projects, the bank structured and approved operations worth R$ 6.64 billion - of which R$ 5.47 billion were loans, considering credit lines

of distribution and generation at wind energy projects and PCH. Some R$ 1 billion were loaned for ports. In addition to integrating the “Progredir Portal”, the bank is the financial agent of the Merchant Marine Fund (FMM) and its objective is to become the leading bank of the Oil, Gas, Energy & Shipbuilding sector, fueling industrial activity and sustainable development in the regions where projects are located. “We want to be the leading bank of the oil & gas sector much like we are the leading bank for housing credit today”, points out Eugênia. Brazil’s Federal Savings Bank started financing oil-related projects in 2008. So far, the bank has loaned R$ 10.1 billion to companies of all sizes. “The first big project was the creation of an area solely dedicated to companies, institutions and people related to the sector. Another important step was the synergy between the credit, product and service areas so that we could offer products according to the needs of the sector ”, comments Eugênia.

Innovation According to estimates of the Financing Agency for Studies and Projects (Finep), in 2011, R$ 310 million were allocated to the energy, oil and gas sector (including funds from the Ministry of Science and Technology/ FNDCT of R$ 150 million and funds disbursed in credit transactions, which amounted to R$ 160 million). Rogério Medeiros, technical secretary for Oil & Gas at Finep, expects at least to maintain the same level of 2011, expanding operations with the start T&B Petroleum # 32

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In 2011, Finep managed about R$ 4 billion. The goal is to get to R$ 6 billion in 2012.” Rogério Medeiros, technical secretary of Finep

of PAISS (BNDES-Finep Plan to Support Innovation of the Sucroenergy and Sucrochemical Sectors) and of the “Brasil Maior” Program. “In 2011, Finep managed about R$ 4 billion. The goal is to get to R$ 6 billion in 2012”, he points out. Medeiros adds that the oil & gas sector is one of the priorities of the “Brasil Maior” Program, which outlines coordinated plans of action to support and invest in sectors that have the potential to promote development and boost local content in the commodity chain of a given sector. “From an Innovation point of view, Finep is also structuring a Support Program that will be focused on R&D (research and development) to qualify Brazilian suppliers 20 T&B Petroleum # 32

through a policy that increases local content”, he affirms. In November 2011, Finep and BNDES announced the creation of a special line of financing for investments in pre-salt technologies and that it was going to be available in 2012. Medeiros states that negotiations with the bank are ongoing, but that the main objective is to finance R&D, technological absorption, production and/or commercialization of innovative products, processes and/or services. The purpose of the line is to develop Brazilian suppliers for the oil & gas supply chain and develop the pre-salt. Medeiros highlights that: “We anticipate investments of more than R$ 2 billion in four years. This amount would be complemented with funds from partners”. In January 2012, the lender announced a line of credit for companies that invest in technological innovation. The “Special Inova Brasil” Account will grant subsidized loans to companies that invest in research and development. “The idea is to grant lines of credit during five years, increasing the contribution of funds to companies that innovate according to the government’s objectives. We need to increase investment in innovation in order to support Brazil’s transformation into one of the five most important nations in the world,” he points out. Some flagship projects financed by Finep, and lines of credit and grants to businesses and economic resources of ICTs (FNDCT/Sector Funds), are still being carried out. Among them is the Brazilian multipurpose reactor, seismic processing and imaging of the sea floor of the pre-salt, electric vehicles, second

generation ethanol from sugarcane biomass, wind energy, and transmission of power. Medeiros also recalls that all the projects approved at the Public Call for the Pre-Salt are being implemented, which includes 58 projects worth R$ 110 million and those related to PAISS, expected to amount to R$ 1 billion by 2014.

National Confederation of Industry In 2012, Brazil’s economy should perform slightly better than in 2011. According to the National Confederation of Industry (CNI), Gross Domestic Product (GDP) is expected to reach 3% compared to 2.8% from 2011. Industrial output is expected to rise to 2.3% from 1.8% in 2011. According to the CNI, the global economic crisis is responsible for two simultaneous adverse effects: reduces demand for Brazilian manufactured products overseas and, with the straightening of the market, increases competition for imported products in Brazil. Nevertheless, given the rise in domestic consumption, forecast of lower inflation, which CNI expects to be 5.2% against 6.5% from 2011, and the depreciation of the real, Brazil’s outlook is positive. CNI stresses that Brazil must become more competitive, thus reducing the so-called ‘Brazil Cost’ – onerous and outdated labor laws, poor infrastructure, complex tax system, excessive bureaucracy – in order to radically change the domestic growth model. We have to prioritize investment, not consumption, as the leading force of growth. For the industry to become the dynamic center of the Brazilian economy and for Brazil to support a cycle


high optimism

of growth above the world average, consolidating a model of sustainable growth”, states CNI president, Robson de Andrade. Despite the challenges, the president of the National Confederation of Industry is optimistic regarding Brazil’s economic outlook for 2012. “I’m sure that, despite global economic instability, 2012 is going to be a great year, if not better than 2011”, he concludes.

Chemicals: high consumption, low production The balance of trade deficit for chemical products reached a record-setting US$ 26.5 billion in 2011. The Brazilian Chemical Industry Association (Abiquim) considers that the apparent domestic consumption (which is the sum of the production plus imports, minus exports, that is, all that was actually consumed in the country) grew between 8% and 10% in the year, while Gross Domestic Product (GDP) grew by 3%.

“Despite the apparent positive performance, who really benefited from the rise in demand were chemical product manufacturers overseas. Most of the increase in demand in 2011 was supplied by imports, while the idleness of Brazilian factories remained high, above 20%. Currently, imports account for 1/3 of all the demand for chemical products in the Brazilian market”, explains Fernando Figueiredo, executive president of Abiquim. Brazilian consumption continues to rise, but we are still largely dependent on intermediaries for fertilizers, pesticides and pharmaceutical products which, combined, represent nearly half (48.7%) of all of Brazil’s imports of chemical products. According to him, as to the intermediaries for fertilizers, the high price of the natural gas used as raw material, which costs about US$ 12/MMBTU in Brazil versus US$ 3.00/MMBTU in the USA, has been the main inhibitor of investments.

Based on information collected from industrial chemical product manufacturers and disclosed in the Annals of the association, Abiquim expects investments of US$ 4.8 billion for 2012 versus US$ 2.6 billion in 2011. According to Figueiredo, this amount is not enough to reduce the balance of trade deficit for chemical products. Figueiredo notes that the effects of the global financial and economic crisis, which has lasted since 2008 and severely affected the economic performance of Euro zone countries in 2011, has made emerging markets like Brazil attractive export markets of big international chemical producers. “We believe that the final demand for chemical products should maintain elasticity between 1.25 and 1.5 times GDP in 2012. We can’t miss the opportunity to transform this increase in demand into added value for Brazil”, he discloses. The executive president of the association states that there is lot of optimism regarding the Chemical/Petrochemical Competitiveness Council, however, serious problems still need to

Brastec receives a capital injection of R$ 70 million of the Modal FIP Oil and Gas fund. Interested in acquisitions and investments required for oil exploration in the pre-salt layer, Brastec Technologies, one of the main manufacturers of Engineering and Equipment for oil and gas industry. Entered into an agreement to receive a capital injection of R$ 70 million. Resources shall be invested by the private equity fund of the Modal Bank, which is to hold a minority share in the capital of the company.

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special: 2012 Perspective be worked out for the chemical industry to move forward with the investment opportunities included in the National Chemical Industry Pact, which amounts to US$ 167 billion over ten years. As to the revival of the petrochemical sector of the last decade, Figueiredo states that, despite all the hardships, the segment made the most investments in the past ten years in Brazil and the outlook is very promising due to the enormous presence of these products in practically all the industrial chains and supply increase of raw materials arising from the pre-salt, which could be made readily available to the domestic petrochemical industry, such as naphtha, gas, condensate, etc. “If you consider investments designed to increase capacity of basic petrochemicals and thermoplastic resins, the supply of products more than doubled. Note that Brazil’s per capita consumption of thermoplastic resins is significantly lower than other countries, including

some neighbors, which can represent opportunity for growth”, he says. Figueiredo also adds that the increase in ammonia and urea production, due to the investments provided by Petrobras, will undoubtedly have a positive impact in Brazil’s balance of trade. “Currently, almost 70% of the urea we need is supplied by imports. Ammonia, of course, has some safety procedures for handling. Nevertheless, we’re importing 25% of our demand. With these two products alone, Brazil sent US$ 1.5 billion overseas (value of imports, according to the Foreign Trade Office) in 2011. That is, these investments will reduce our imports, and, consequently, the deficit”, he concludes.

Electro-electronics: slow growth According to the Brazilian Electrical and Electronic Industry Association (Abinee), in 2011 sales of the industry grew 8% from 2010, totaling R$ 134 billion, which failed to meet the initial forecast of 13%.

Optimism remains high in Rio de Janeiro in 2012 and in the next few years. According to the state secretary for Economic Development, Energy, Industry and Services, Julio Bueno, the projects stretching from Angra dos Reis to Campos are going to have a profound affect on the industry in Rio. He is certain that the state’s economy is going to be much more solid in 2016. Brazil’s most important shipbuilding hub, the state of Rio de Janeiro has just received half of the orders of Petrobras for the con22 T&B Petroleum # 32

Foto: Banco de Imagens TN Petróleo

Huge investments in Rio

According to Paulo Sérgio Galvão, regional manager of Abinee in Rio de Janeiro and Espírito Santo, the main setbacks indicated by companies, and that influenced performance, were the appreciation of the real and the global economic crisis. “All segments experienced increased sales in 2011, notably telecommunications, which rose 17%. This rise was largely the result of the indiscriminate importation of cellular phones, which negatively affects domestic production”, stated Galvão. According to Galvão, Abinee has requested the government to compare the cost of the cellular phones coming from China (around US$ 12) against the products manufactured in Brazil, and to take appropriate steps to support the companies in Brazil. “The low cost most likely results from subsidies that the Chinese government grants to export companies, creating an unfair advantage against products manufactured in Brazil”, he points out. The Abinee manager explained that the appreciated real continued to cause victims in the struction of 26 deep water drilling rigs, which amount to investments of US$ 20 billion. “These new 13 construction projects are going to consolidate Rio’s participation in this industrial segment, creating jobs and business opportunities. This alone should attract a large number of companies to set up office here. But, we’re also expecting the domestic content guidelines that Petrobras is going to release this year, which will make the supply chain contract process more transparent”, states the secretary. Julio Bueno states that the anticipated availability of the Inhaúma Shipyard – which is being refurbished by Petrobras for the construction of ships and platforms – is one of the industry’s highlights in Rio for 2012.


high optimism

electro-electronic sector, as demonstrated in the balance of trade for cellular phones. He said that in 2007 exports of these products totaled US$ 2 billion and imports US$ 375 million, creating a surplus of US$ 1.7 billion. In 2011, however, exports fell 73% to US$ 558 million, while imports rose 168% to US$ 987 million. “With this volume of overseas sales, cellular phones lost their competitive edge, held for many years, and dropped to the number five position. At the same time, cellular phones were the seventh most imported product. We need to find ways to ensure the competitive isonomy of the products, including, reducing the high costs of domestic production”, he adds. For Galvão, the biggest setbacks that still prevent a greater share of the sector in big oil &

gas supply chain projects are “purchase packages”, almost always offered by international competitors at low interest rates and at unreal prices, whether because of the European crisis that reduced their markets, whether due to the ‘Chinese reality’. “Most of our companies can supply specific systems or set of products, but not the complete package that overseas companies provide. Rumor has it that the new president of Petrobras is going to correct this, in order for purchases to be done in systems – like before the rise of turnkeys, EPCs and integrators as suppliers of finished projects to Petrobras. When Petrobras bought directly in the market everyone had a chance to supply”, he emphasizes. Galvão recalls that inadequate infrastructure makes

domestic products more expensive. “This requires differentiated treatment through a local content policy that makes the domestic product equal to the foreign one. Today, foreign products are benefited from odd programs, such as the Special Customs System for Export and Import of Goods destined to Activities of Research and Mining of Natural Gas and Oil Deposits (Repetro), the Special Incentive for Infrastructure Development of the Petroleum Industry in the North, Northeast and Midwest Regions (Repenec) and the Special Brazilian System (REB), he says.” Regarding the domestic content issue, the Abinee manager points out that this has brought some benefits to E&P only, since bidding rounds have a binding instrument. “This advantage may lead to differ-

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The industry as a whole predicts growth of 13% compared to 2011. In the area of P&G (electrical, automation, instrumentation and control, fiscal measurement and telecommunications), the strengthening of the local content policy and requirement of compliance in all areas of activities that are related to it, such as shipbuilding, may lead to a new reality in the sector, far beyond what exists today.” Paulo Sérgio Galvão, regional manager of Abinee

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ences as of this year when purchases for the investments of the Seventh Bidding Round get underway, because only then will local content (CL) levels be measured by systems and sets of product. Previously, measuring only by the total investment concealed big lies, because the assertion that the CL of 70% had been reached, for example, hid the fact that electrical and electronic and machinery and equipment industries provided practically nothing, since their share in total investment ranges 5% at most, which did not give them any visibility”. He points out that the areas of supply/refining and shipping, do not have any binding instrument, which leaves them without any formal commitment to the issue of local content. “We hope that there will be a change of attitude with the new president of Petrobras, considering that she had an active role in all these local content definitions as a secretary in the Ministry of Mines and Energy (MME),” he hopes. “The industry as a whole predicts growth of 13% compared to 2011. In the area of P&G (electrical, automation, instrumentation and control, fiscal measurement and telecommunications), the strengthening of the local content policy and requirement of compliance in all areas of activities that are related to it, such as shipbuilding, may lead to a new reality in the sector, far beyond what exists today. Petrobras’s internal guidance, which recommends buying competitive local content products, will make a big difference in job creation and income generation in the country”, concludes Galvão.

Industrial Engineering For the Brazilian Association of Industrial Engineering (Abemi), the assessment is that 2011 was positive in terms of turnover for industrial engineering companies. The continuity of investments, projects and works planned and in progress, especially in the oil and gas segment, allowed the industry, as a whole, to keep growing. Carlos Maurício Lima Barros, president of Abemi highlights a positive event of 2011 for the area: the approval of the regulation of Law 12.431/2011, which established tax incentives for the development of the private market for longterm financing for infrastructure projects. “The measure may contribute to the creation of a credit market geared towards the sector, expanding the possibilities of funding for important projects for the country, which today are practically concentrated at BNDES”, he says. However, according to the executive, competitiveness is Brazil’s biggest hurdle, but other challenges still remain such as the high tax burden, high investment costs, logistical deficiencies, in other words, the structural problems grouped in the so-called ‘Brazil Cost’. “The training of skilled labor is the most important bottleneck that must be tackled jointly by the government and the private sector and that has a direct effect on increasing competitiveness, job creation and the ability of Brazilian engineering to execute projects on time. Brazil can over-


high optimism

come these obstacles through concerted actions and by investing in priority sectors with the harmonious engagement between government, private sector and trade unions”, he adds. The association indicates that the worsening global economic and financial crisis has negatively impacted the sectors that rely heavily on foreign markets, especially those related to steel, cellulose and paper. From the second half of 2011, we observed a much more careful analysis of companies in these sectors in relation to investment plans. For Abemi, the large volume of investments, the sectors of oil & gas, energy (hydroelectric, wind and thermal power plants, among other ventures), and mining were among the main contracting parties of industrial engineering. About 90% of the 140 Abemi associates are suppliers of the oil & gas sector, and in recent years, the companies have actively participated in the offshore and refining projects of Petrobras. According to Barros, the expected investment for our industry in 2012 is higher than what was invested in the previous four years, but the tendency for the

segment is for stable business, given that part of the projects have been contracted. “Considering the infrastructure sector, we see good opportunities, because the country needs to accelerate planned projects for stadiums, airports and urban transport, if you want to be reasonably prepared for the sporting events - the 2014 World Cup and 2016 Olympics”, he points out. The Abemi president emphasizes that within the competitiveness project, four priorities were established: Improving the Quality of Engineering Projects; Management and Leadership; Productivity Metrics; Qualification and Certification. Each theme has been discussed internally in Working Groups, which have the active participation of business associates. According to Barros, the works are in different stages, but many advances have been achieved in the last year and some practical results should be seen in 2012. “Soon, we should be executing a term of partnership between Abemi and NCCER (National Center for Construction Education and Research), a labor training

and certification organization, maintained by general contractors in the United States. The initial agreement between the entities provides for cooperation for the transfer of technology to enable Abemi to be responsible for the Training, Management, Certification and Accreditation of the NCCER System in Brazil. This agreement is going to allow the implementation of the Abemi program for the training and certification of labor on construction sites”, says Barros. In the area of Leadership and Management, the executive says that the first Foreman and Technical Project Coordination classes are scheduled for the second half of the year, which will be offered to associates. “Course curricula are being developed by identifying the major deficiencies of the professionals in both areas and by establishing an ideal profile of the professionals”, he says.

Machines and equipment Sales of mechanical capital goods totaled R$ 81.2 billion in 2011. Although this represents a growth of 9.1% compared to last year, according to the

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Complicated scenario for independents According to the Brazilian Association for Independent Producers of Oil & Gas (Abpip), 2011 was a difficult year for independent producers. Anabal Santos Jr., executive secretary of the association, points out that the market of independents was negatively affected by the discussion of the pre-salt, which monopolized the actions of the oil & gas authorities and onshore market issues were not prioritized. “Indeed, this was a setback, we usually say that there was a black out in 2011 for the oil & natural gas onshore market. We had no bidding round, we had significant loss of production, some companies laid off workers due to a lack of prospects for the sector”, he says. Another downside of 2011 pointed out by the executive was the intended outcome of the Eighth Bidding Round. Anabal explains that the onshore blocks in Bahia (Tucano Basin), which were bid before the cited round was interrupted, have not had their contracts executed. In addition, there have been rumors that they are also going to be affected by the cancellation of the round, despite being onshore and, therefore, have no relation to the pre-salt. Currently, independents produce about 500 bbd, but produced 2000 bbd in 2009. The Executive Secretary of Abpip explains that commercialization of the oil produced by independent remains an obstacle for the segment. “Thanks to the implementation of Dax Oil, a private refinery located in Bahia, we got 26 T&B Petroleum # 32

Photo: Sonagol Starfish image bank

However, not everything is rosy in the oil & gas sector

some breathing room to face the difficulty, but it’s a difficult solution for fields located in remote areas, such as Rio Grande do Norte and Espírito Santo, where the oil has to travel almost 2,000 km by land for commercialization”, he says. Anabal states that it is very important for the president to approve the policy to promote small and medium companies (PME), which has been approved by the National Energy Policy Council (CNPE), because it maps out the bottlenecks and describes how to solve them. Currently, there is much uncertainty in the market, because it gives a feeling that Brazil has not yet decided which model to adopt to explore and produce small fields and onshore blocks. “It is unfortunate that the Federal Government has not yet realized the benefits that this sector can bring to the impoverished areas of the Northeast where these fields are located”, he emphasizes.

The Abpip defends the importance of bids for marginal fields for the segment. According to the association, this is the entrance point for the small producer. Furthermore, continuing the bids is another aspect that supports the market with the entrance of new agents and expands the portfolio of existing agents, which creates business, jobs and income. Anabal emphasized that the uncertainty regarding the bidding of new areas, including the pre-salt, not only affects independent producers, but the country as a whole. “Oil companies need to renew their portfolio and their planning is long term, as rules in Brazil are not clear and bids do not take place on a regular basis. Thus, companies prepare to take part in bids elsewhere. After all, the world is not going to stop because of the uncertainties in Brazil”, he points out. For Abpip, bids of new onshore areas are essential if Brazil wants to get to know the other 95% of unexplored basins.


high optimism

Brazilian Association of Machines & Equipment Manufacturers (Abimaq), the sales mark of R$88 billion established in 2008 (before the crisis) has not been achieved. The order of capital goods used in the oil industry, compared to 2010, increased 6.2% (16.6% of sales) and decreased 5.9% compared to 2008. Pumps and motor pumps increased 6% (5.9% of sales) and, compared to 2008, increased 39.2%. Hydraulics and pneumatics increased 14.7% (2% of sales) and decreased 3.9% compared to 2008. Valves decreased 18.1% (1.4% of sales) compared to 2010 and decreased 11.6% in 2008 value. Regarding the technological deficiencies in the Brazilian industry, especially to meet the demands and challenges of the oil & gas sector in the pre-salt scenario, Alberto Machado, president of the Oil & Gas segment at Abimaq, believes that with some exceptions for equipment with proprietary technology or of low demand in international terms, the deficiencies that exist today

are perfectly able of being overcome, provided there is a joint effort between demanders and suppliers. “However, any and all national development must be linked to their economic viability and sustainability in terms of future supplies”, concludes Machado. According to the representative of Abimaq, the main contribution that the machinery and equipment sector can make to pre-salt development is the quality of demand information, not placed in financial terms, but placed in terms of quantity of machines and equipment and installed on schedule. The executive stressed that the Brazilian industry is already able or has the potential of being able to supply many of the products, however the sooner the information is available the better the chances of increasing the participation of the local industry in the market. “We also need some government actions to improve competitiveness in ways that are independent of the industry’s decision-making process, such as tax burden, currency exchange, interest rates, among others, which make the domes-

tic industry unable to compete against foreign companies”, proposes Machado.

Positive outlook in the naval area According to the National Association of Naval and Offshore Construction and Repair Industry (Sinaval), 2011 brought some very positive news for Brazilian shipbuilding. According to Ariovaldo Rocha, president of the organization, shipbuilding continues to expand production capacity in 2012. According to him, concrete facts that indicate an expansion of Brazil’s shipbuilding sector in 2012 are: approval of priorities by the Merchant Marine Fund (FMM) in the amount of R$ 8.3 billion for shipbuilding; implementation of the Inhaúma Shipyard in Rio de Janeiro for the conversion of four oil tanker hulls into FPSO platforms; the implementation of the Itaguaí Construções Navais (ICN) shipyard for the construction of five submarines; the announcement of the start-up of operations of Seven Brasil, which will manage

T&B Petroleum # 32

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special: 2012 Perspective 30 drilling rigs to be built in Brazil at the Atlântico Sul Shipyard (EAS/PE), Brasfels Shipyard (RJ), Rio Grande Shipyard (ERG/RS) and shipyards under implementation OSX (RJ), Jurong Aracruz Shipyard (EJA/ES) and Enseada do Paraguaçu Shipyard (EEP/BA). The union points out that the backlog of Brazilian shipyards today stands at 312 projects to build ships and platforms, representing 6.2 million DWT (deadweight tons that measure the capacity of a ship, about the same as 2011, but the great business transactions last year in the sector generate expectations of an even better year in 2012. Disbursements of the Merchant Marine Fund (FMM), according to the Comptroller General (CGU/Transparency Portal), totaled R$ 1 billion 857 million by November 2011. Most shipbuilding projects, implementation of eight new shipyards and expansion of three existing shipyards, has not turned into orders at the

shipyards and represent the prospect for the coming years. Statistical data on production and employment surveyed by Sinaval in the fourth quarter of 2011 show an increase in employment to 59,167 people, considering November 2011 data. The increase occurred in the Southeast, South and North. A decrease in the Northeast reflects adjustments made at the Atlântico Sul Shipyard (Suape/ PE) due to expected deliveries of oil tanker João Cândido and the hull of semi-submersible platform P-55.

Maritime support on high demand Due to the great achievements of 2011 and the expected demand thanks to the oil & gas discoveries in the pre-salt, Brazil’s maritime support market is expected to flourish in 2012. “We believe that the new board of Petrobras will continue to promote growth in the

The World Bank (WB) has reduced the prospects for global growth to 2.5% in 2012 and 3.1% in 2013, under the influence of the crisis in the euro area. In its latest estimates, in June 2011, the bank predicted a 3.6% rise in the global economy in two years. According to the WB, in 2012, advanced countries should grow 1.4%, while emerging economies will grow 5.4%. Previous forecasts indicated an increase of 2.7% and 6.2%, respectively. The International Monetary Fund (IMF) also revised down global growth this year to 3.3%, compared to 4% forecasted previously, in a context of sluggish growth and high financial risk in the Euro area. For Latin America, the IMF’s growth forecast changed from 4% to

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Foto: Banco de Imagens Stock.xcng

Global growth slows down

3.6% in 2012. The Fund also warned that this cut in global growth is very significant, 0.7 percentage point relative to the forecast in September, and therefore that all regions should be affected.

sector. We expect bids for the construction of support vessels of Petrobras to continue expanding the Brazilian fleet”, says Ronaldo Oliveira Mattos de Lima, president of the Brazilian Association of Maritime Support Companies (Abeam) and director of Companhia Brasileira de Offshore. According to the executive, although construction costs are high, mainly due to the ‘Brazil Cost’ and the effect of currency exchange, we are optimistic and the sector should hire PSVs of great capacity and AHTS that have more power and are equipped with high-capacity winches (HTS). “2011 was a good year for the offshore support market. The bids for new vessels took place in reasonable time, the number of foreign companies deploying their vessels here increased and the amount of contracts with other oil companies increased”, says Lima. The debt and public deficit problems in Europe were highlighted by the Fund, but at the same time, it recommended that austerity measures should not exacerbate the situation. Brazil’s growth was revised down 0.6 percentage point by the Fund to 3%, and Mexico was revised down only 0.1 percentage point to 3.5%. The forecast for the United States remained unchanged, with a planned expansion of 1.8%, but the European Union will enter a recession with a contraction of 0.5% (down 1.6 percentage point). In 2012, China will grow by about 0.8 percentage point less than 8.2%, and Japan is expected to grow just 1.7% (-0.6 percentage point). Spain’s economy should suffer a contraction of 1.7% in 2012 and a decrease of 0.3% in 2013. The Italian economy will decrease 2.2% in 2012.


high optimism

Ethanol: stable market in 2012 In 2011, ethanol suffered the effects of the global financial crisis of 2008. According to the Brazilian Sugarcane Industry Association (UNICA), grinding was down by more than 60 million tons of sugarcane, the result of adverse agricultural conditions in the last three harvests, combined with an aging sugarcane plantation (lack of crop renewal), which began with the crisis. As a result, some 3 billion liters failed to be produced and supplied to the domestic market. With the reduced supply of sugarcane, producers chose to produce more anhydrous ethanol, which was mixed with gasoline at a ratio of 25%, reduced to 20% in October, despite availability of the product to maintain the level. Moreover, according to Antonio de Pádua Rodrigues, technical director of Unica, the sector complemented the supply of ethanol by importing 1.2 billion liters. “This reduction in supply allowed hydrous ethanol to be marketed at good prices to the producer, especially the market of São Paulo, whose ICMS tax for hydrous ethanol is 12%, compared with 25% for gasoline. Outside São Paulo, ethanol made its way to Paraná, Goiás, Mato Grosso and Minas Gerais states, which have lower ICMS rates than gasoline”, he says. For Pádua, the ethanol market in 2012 should not undergo dramatic changes. “While we expect an increase in the supply of ethanol, we will also have a significant increase in the fleet of flex-fuel vehicles, potentially using ethanol, if ethanol prices are lower than gasoline prices”, he explains.

,

The representative of Unica states that the industry invested in crop renovation in 2011, and will continue to invest heavily, since the grinding capacity of the plants exceeds the current supply of sugarcane by more than 150 million tons. “In 2008, we had 30 new units in operation, down to just three units in 2011 and four new units are projected in 2012, therefore little expansion of grinding capacity and sugarcane supply in the short-term”, he stresses. According to him, after more than 30 years of protectionism, last year the U.S. market did not renew legislation that included heavy subsidies for the ethanol industry and a heavy tariff on the imported product. “Now, in 2012 Brazil will be able to export its ethanol”, he added. Pádua explains that the unrestricted movement of ethanol in the Brazilian and American markets can lead to the development of new businesses in both imports and exports, mainly Brazilian ethanol into the U.S. market. However, the executive emphasizes that this market is still ‘spot’, because there are no mediumand long-term sales contracts. “We will work in 2012 with the same volume of exports that we had in 2011: 2 billion liters, of which the majority has no use with fuel”, he says. According to Unica, from 2005-2011 Brazil had over 130 new units in opera-

tion, the result of a positive scenario in which the production margin of hydrated ethanol was positive, the growing domestic market of flex-fuels vehicles in 2003 and a promising export market. “The domestic market (car sales) continues its positive fundamentals and the foreign market with the end of the tariff is also promising, but there needs to be a clear set of ethanol policies to make it viable for the domestic market”, adds the Unica director. From 2005 to 2011, ethanol production costs rose significantly, losing its competitiveness against gasoline, since gasoline prices at the refinery are basically the same as 2007. For Unica, the option to control the price for consumers, exempting taxes on gasoline to recover the gasoline price levels of Petrobras, should also be practiced for ethanol, which has not occurred. Today, Brazilian consumers pay higher taxes per mile driven than gasoline in most Brazilian states. Unica says that the market does not recognize the positive externalities of ethanol, which includes environmental and health issues in large cities, and the best way to solve this equation would be by establishing clear public policies for the participation of both products (gasoline and ethanol) in the fuel matrix. “Both sectors need to make investment decisions, build new oil refineries and new ethanol producing units. Brazil is privileged because it has both products and one of the world’s cleanest energy matrix. You only need to decide what’s best for society”, says Unica director.

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special: 2012 Perspective Currently, around 40 companies are active in the offshore support market. The fleet operating in Brazil as of December 2011 totaled 420 vessels, among them 260 foreign and 160 Brazilian companies. The president of Abeam highlights that in light of the numerous challenges behind

the complex logistics of new deepwater discoveries, the main challenges that the offshore support market still faces is the lack of space to dock vessels. However, the biggest worry is the shortage of crew to operate these vessels, which may even hinder the development of pre-salt. The Navy,

which trains these officers in two schools, one in Rio de Janeiro and one in Belém, will not be able to meet short-term demand. “With so many new fields being discovered and the entry of new platforms, the trend is that there will be more than 500 support vessels

Increasing Petrobras’s participation in the ethanol market is one of the goals of the new president of Petrobras, Maria das Graças Foster. The idea is for Petrobras to become a leader in the segment within five years. “We’re going to increase our ethanol participation for economic reasons. However, it’s not that simple. It takes awhile to start working with ethanol. Two, three, four, five years to get to the number one spot in the market. We’re going to work very focused on the economic result of our ethanol output growth,” said Graças Foster, during her first news conference as president of Petrobras. Environmental safety in oil extraction and production in order not to repeat accidents that damage the environment, especially in pre-salt exploration is also one of the highlights provided by the new governance of Petrobras. The culture of prevention will be more rigid internally. The Director for Supply at Petrobras, Paulo Roberto Costa, expects Petrobras’s refining cost this year to be at least 5% lower than last year’s. He believes that the cost was high last year due to the expansion of Petrobras’s refining complex. “We put 14 new process units in operation,

30 T&B Petroleum # 32

Foto: Bia Cardoso

Petrobras: solid ethanol presence and lower cost of refining

which obviously means more people, more maintenance. The cost this year should be at least 5% lower. And our cost of refining will be comparable to any other oil company. We’re among the best companies in terms of refining costs”, said Costa. He assured that Petrobras will maintain the fuel price policy based on a long-term horizon, without reflecting the daily fluctuations in the international oil price market. “The market will continue growing. From January 2012 to January 2011, gasoline consumption increased 36%. But Petrobras will continue to fully supply this market”, he added.

Profit – Petrobras announced that net income for 2011 was R$ 33.3 billion, 5% lower than the previous year. According to the operating and financial results of the company, cash flow - which represents earnings before interest, taxes,

depreciation and amortization - has, however, slightly more than $ 62.2 billion in 2011. Petrobras notes that last year proved reserves in Brazil reached 15.71 billion barrels, with a replacement rate of 152%. Pre-salt output in 2011 increased from a daily average of 103,000 barrels in January to 201,000 barrels in December. The announcement highlights the commerciality declared in December at Guará, currently Sapinhoá Field, with a total recoverable volume estimated at 2.1 billion barrels. Also in the 2011 balance sheet, Petrobras mentions the start-up of five new production systems and 11 offshore drilling rigs. Another outstanding performance is the 9% sales increase of oil products in the Brazilian market, which reached 2,131,000 barrels per day in 2011.


high optimism

operating in Brazil by 2015”, adds Ronaldo Mattos de Oliveira Lima. According to him, based on a recent study conducted by Schlumberger, today there is a shortage of some 900 officers to operate vessels. For Abeam, a possible solution for this bottleneck is the loosening of two normative resolutions of the Ministry of Labor and Employment for at least five years: Resolution 72, which requires foreign vessels to hire two-thirds of Brazilians to work on board foreign vessels or platforms; and Resolution 80, which deals with the granting of work permits to obtain temporary visas to foreigners with employment in Brazil. “Loosening these

two resolutions will greatly contribute to the growth of the sector. Until the Navy is able to train a sufficient number of professionals”, Ronaldo Lima points out.

Fuel consumption below projection The growth in fuel consumption in Brazil was below the 7% projection of the National Petroleum, Gas and Biofuels Agency (ANP) in late 2010. According to data released by the regulatory agency, total consumption grew 3% in 2011, with the use of 121.4 billion liters. The year before, the rise in sales was 8.4% compared to 2009. The director of the ANP, Allan Kardec, points out that the low increase in consumption is mainly related to the “extraordinary” decline in ethanol consumption. Ethanol sales were down 13.8%. Hydrated alcohol alone fell

28.9%. Anhydrous ethanol (added to gasoline) consumption rose 18.3%. Allan Kardec attributes the decline to both crop failure in 2011 and the 2008 global crisis, which have impacted and slowed the pace of the domestic industry. He expects the scenario to improve this year. “We expect an increase of 10% to 20%. Fuel consumption is a thermometer. The increase is directly proportional to GDP. Since we expect growth, with economic expansion, we expect consumption to increase”, said the director. Diesel consumption rose 5.2% in 2011 compared to the previous year. In the same period, jet fuel rose 10.8%.

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special: 2012 Perspective Products such as biodiesel have registered higher sales despite high prices. From 2010 to 2011, biodiesel consumption rose 5.3%. With the decentralization of power plants, the

high optimism

product is expected to become more competitive. “From 2010 to 2011, there was decentralization [production plants] and, therefore, we expect more competition

in the market. Greater supply may increase competition and cost efficiency and can lead to lower prices”, said Dirceu Amorelli, Supply superintendent at ANP.

Investments in the oil & gas industry continued their upward trend last year, and forecasters predict this scenario to continue during the next ten years. The National Organization of the Petroleum Industry (Onip) points out that the number of new players and the expansion of the productive capacity of those who already produce in Brazil rose in 2011. Despite the positive outlook, the organization advocates coordinated action designed to make the industry more competitive by establishing specific industrial policy. “We need to support innovation and technological development, promote companies, establish fair tax systems and provide workforce training”, states the general director of Onip, Eloi Fernández y Fernández. These are some of the priorities pointed out by a study conducted by Onip, which prepared a Report on Competitiveness for the industry’s commodity chain Another important issue in 2012 is the resumption of the bidding process of new areas, which will have a direct impact in continued exploration investments in the future. In order to make domestic suppliers more competitive, besides Onip’s registration, Onip provides a Registry System of Suppliers to the Brazilian Segment of Oil & Natural Gas Exploration and Production (CadFor), which is exclusive for the sponsor32 T&B Petroleum # 32

Photo: Roberto Rosa, Consórcio Quip

Competitiveness: coordinated action

ing operators, Anadarko, BG, BP, Chevron, El Paso, Maersk, Repsol, Shell and Statoil and is a great way for domestic suppliers to come into contact with these big companies. In addition to CadFor, Onip also manages NaviPeças Catalog, which is designed for shipbuilding suppliers. The Technological Platforms (Platec) project is another initiative created by Onip designed to foster cooperation between demand, suppliers and research centers for the development of goods in Brazil, based on innovation and technological development, and is an excellent mechanism to structure the development logic of new suppliers, even for products with dominated technologies. The catalog has become an important tool for the growth of domestic suppliers, especially after March 2011, when shipyards/ ship repairers, shipbuilding workshops,

navigation companies and agencies and sub-suppliers of shipyards began to consult it more actively. Besides using the catalog to find suppliers, shipyards began recommending it to their suppliers and sub-suppliers, as an opportunity for new businesses. In 2011, Onip’s main achievements were the registration of 755 companies from 16 states - 267 companies from São Paulo, 138 from Rio de Janeiro, 58 from Paraná, 55 from Rio Grande do Sul and 44 from Espírito Santo and the execution of the 1st Business Round for the Navipeças Catalog, in December, which generated an expected volume of business of R$ 51.2 million for 2012. In 2012, Onip will continue conducting technical visits to shipyards, and is going to participate in two Business Rounds, in Pernambuco and Rio Grande do Sul.


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Photos: Petrobras Agency

Petrobras

34 T&B Petroleum # 32


Interview with Maria das Graças Silva Foster, Petrobras President

Local content

and zero leaks

With a projected volume of recoverable oil in the pre-salt layer of some 15 billion barrels of oil equivalent - equal to the total proven reserves of Petrobras - the Brazilian oil company puts into operation the first oil and gas production FPSO in the Gulf of Mexico, betting on its consolidated deepwater expertise in Brazil. by Beatriz Cardoso “Our goal is zero leaks”, said Maria das Graças Silva Foster, the first woman to become president of Petrobras. In an exclusive interview with T&B Petroleum, Graças Foster said that, in spite of an expected divestment of 13.6 billion in the 20112015 Business Plan, which she sees as normal in any review process, the company will continue to allocate resources in exploration and production in both the pre-salt and post-salt, increasing the local content of its projects, whenever possible. “Our studies indicate that it is possible to increase the local content of some sectors that supply goods and services. However, this requires the secondary chain of suppliers to become part of this significant movement of the industry”, reckons the executive. T&B Petroleum – Petrobras consolidated another milestone in deep waters in early March by initiating production of the Cascade field in the Gulf of Mexico, through an FPSO, the first to operate in the Gulf of Mexico. What does this represent for the company, which is internationally recognized for its deepwater offshore expertise? What is the most significant aspect of the start of production for Petrobras on the world stage? Maria das Graças Silva Foster – The start of production at Cascade

with the FPSO consolidates Petrobras as one of the major international players in deep waters of the Gulf of Mexico, as already occurs in the Brazilian coast. Petrobras is the first company to develop an oil field using these technologies in the Gulf of Mexico. The first FPSO (floating production, storage and offloading platform) operating in the region is capable of processing 80,000 barrels of oil and 500 cubic meters of gas per day and store 500,000 barrels of oil. It has a disconnectable mooring system, which allows it to go sheltered areas during hurricanes and storms, ensuring crew safety and preservation of the environment and integrity of equipment. What makes Petrobras’s management different when it comes to offshore operations, which minimize the risk of incidents such as those that occurred in the Gulf of Mexico (BP) and in Brazil (Chevron)? How do you avoid incidents in offshore operations that are carried out by service firms? Through greater control and supervision of all activities being carried out by contractors in the intervention of a well, for example, or any other action? Our endless goal is to have zero leaks. We created a working group responsible for identifying the best

practices on how to achieve it, improving a set of initiatives that were adopted in the last decade. Petrobras is working proactively to prevent any accidents. We have a culture that prioritizes the operational safety and especially prevention. We invest in extensive training, integrity of facilities and process safety, and require that suppliers do the same. We adopt strict safety standards, which allow the worker to stop if s/he is unclear about something. This is the most important point. All major projects receive a report from the Health, Safety and Environment area for all solutions. Well projects, for example, have best practices that ensure safe operation. Offshore drilling units working for Petrobras are equipped with systems that can provide immediate and automatic closure of the wells, which prevents out of control scenarios. There are gas detectors in key locations of the platforms, alarms linked to the excess of process parameters and wellhead, circulation and fluid injection safety systems. Well closing and control simulations are conducted periodically at which point crew and equipment response times are measured. Recently, in a television interview, you stated that Petrobras’s reserves today would be around 31 billion T&B Petroleum # 32

35


Petrobras

On December 31, 2011, we reported that the appropriated reserves in Brazil, according to SPE criteria, reached 15 billion 706 million barrels of oil equivalent (boe). During the past year 1 billion 242 million boe were appropriated, sufficient to offset the total produced in 2011, which was 919 million boe, and increase proven reserves by 423 million boe, representing an increase of 2.8% as compared to 2010. We also announced an estimated recoverable volume of 15 billion based on information obtained so far from the pre-salt discoveries. barrels. Does this volume represent the sum of the most likely proven reserves (15.7 billion/SPE)? When do you expect to reach this volume, in terms of proven reserves? On December 31, 2011, we reported that the appropriated reserves in Brazil, according to SPE criteria, reached 15 billion 706 million barrels of oil equivalent (boe). During the past year 1 billion 242 million boe were appropriated, sufficient to offset the total produced in 2011, which was 919 million boe, and increase proven reserves by 423 million boe, representing an increase of 2.8% as compared to 2010. We also announced an estimated recoverable volume of 15 billion based on information obtained so far from the pre-salt discoveries. Therefore, the proved reserves of the company in Brazil, according to industry standards, are 15.7 billion barrels of oil equivalent. We work hard to assess the pre-salt discoveries and transform the recoverable volumes provided in proven reserves, but we cannot set deadlines for completing this process. Is the future of Petrobras concentrated in the pre-salt or can we expect big surprises in the post-salt?

36 T&B Petroleum # 32

Or even in the Brazilian equatorial margin and onshore area? The future of Petrobras, with respect to Exploration and Production, will be sustained by the pre-salt and post-salt, where we have discoveries being evaluated and developed. Our portfolio contains 194 offshore and onshore exploratory blocks. During the next five years, in fact, great part of the increase in production will come from the post-salt. In 2011, we had seven major production platforms for the post-salt under construction, and two of them are already operating. The seven platforms combined represent over one million barrels per day of production capacity. By 2014, when all are operating, we will have an extra volume of production capacity in the post-salt equivalent to 50% of all our current production in Brazil. The increased participation of the pre-salt reservoirs will start in 2015, with the start up of eight platforms in the concession areas and four in the transfer of rights areas. The local content issue was a rather strong aspect of your role as executive secretary of Prominp, when you were head of the Oil and Gas

Secretariat at the Ministry of Mines and Energy (MME). Do you believe that we are reaching a limit in relation to local content requirements (it cannot be 100% Brazilian) or is this something that can still be expanded and incorporated into other activities of Petrobras beyond Upstream? What areas or activities can increase their domestic content without jeopardizing the goals of Petrobras? The measures being implemented is the result of the Local Content Policy throughout all the areas of the Company. There are dozens of projects in the E&P, Supply and Gas and Energy sectors, whose local content is around 65%. All were calculated based on the criterion of the ANP’s Local Content Policy. We have studies that indicate that it is possible to increase the local content of some suppliers of goods and services. But, this requires the secondary chain of suppliers to become part of this expressive movement of the industry. We are currently working at the limit of what we call possible local content. This concept reflects the index that can be achieved taking into account our commitments to term, internationally competitive prices and


Local content and zero leaks

manufacturing capacity and service offers currently demonstrated by the domestic industry. We are working with a current picture of the capabilities of our industry, and this scenario always strives for local content in all our contracting processes. A few years ago, you stated: we must create a culture of gas. And you played a key role in this whole process, from TBG to the executive board for Gas Natural. What are the major challenges that still need to be overcome in order to achieve self-sufficiency in natural gas? Is this self-sufficiency fundamental or ‘not necessarily’ in a globalized world? Does shale gas represent a good opportunity? The significant growth in domestic gas supply seen in recent years is the result of a series of investments in development projects in natural gas production through the Gas Production Anticipation Plan (Plangás). Since 2008, several new fields have begun producing in Espírito Santo, Campos and Santos basins. Petrobras set a new record in the delivery of natural gas to the market in 2011, reaching an annual flow of 37 million m3/d of domestic gas offered. The company also registered new monthly and daily records: in December 2011, the flow offered reached the mark of 42.4 million m3/d; and on the 23rd of that month, 46.1 million m3 were offered. The significant increase in the supply of natural gas in 2011 was made possible by the start of production of Mexilhão, Uruguá and Tambaú fields, in Santos Basin and the start of operations of the Caraguatatuba Gas Treatment Unit and of the Caraguatatuba-Taubate Pipeline in São Paulo.

Also in Santos Basin, the beginning of the use of gas from the pre-salt, with the production flow from Lula field, contributed for the increase. Besides Plangás, two other factors were critical for the cited records: the success of the Natural Gas Utilization Optimization Program (POAG), which has improved the performance of the operating units in the South and Southeast regions, and increased gas delivery for thermoelectric generation in the North. Today, we have a total supply of gas to the market of 106 million m3/d, comprised of 30 million m3/d from Bolivia, plus 21 million m3/d from LNG regasification terminals in Guanabara Bay (RJ) and Pecém (CE), plus 55 million m3/d from our own production of domestic gas. The company is building a new regasification terminal in Bahia with capacity to process 14 million m3/d as of January 2014, and will increase the capacity of the terminal in Guanabara Bay (RJ), from 14 to 20 million m3/d in 2013, so that in 2015, the company will have an LNG regasification capacity of 41 million m3/d. Petrobras does not expect Brazil to become self-sufficient in natural gas. The country will continue to import gas from Bolivia and LNG, to a greater or lesser extent, depending on the gas orders for thermoelectric plants by the ONS (National Electric System Operator). We do not believe in the pursuit of self-sufficiency in gas as being a fundamental factor for the sustainable development of this industry in Brazil. Maybe it is just the opposite, given the volatile nature of Brazil’s natural gas market. Given this aspect, we seek both security and flexibility to meet de-

The measures Being implemented is the result of the Local Content Policy throughout all the areas of the Company. There are dozens of projects in the E&P, Supply and Gas and Energy sectors, whose local content is around 65%. All were calculated based on the criterion of the ANP’s Local Content Policy. We have studies that indicate that it is possible to increase the local content of some suppliers of goods and services. mand. We have good relations with Bolivia, and a 10-year contract. LNG terminals allow access to the main exporters of natural gas from the Atlantic Basin and the Middle East. The increasing domestic production of associated gas ensures the competitiveness of our product. In addition, we have a solid transportation network, connecting all sources of supply to markets in all regions of Brazil (except the North). The production of unconventional gas, such as shale gas, is a reality in

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T&B Petroleum # 32

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Petrobras

Today, we have a total supply of gas to the market of 106 million m3/d, comprised of 30 million m3/d from Bolivia, plus 21 million m3/d from LNG regasification terminals in Guanabara Bay (RJ) and Pecém (CE), plus 55 million m3/d from our own production of domestic gas. The company is building a new regasification terminal in Bahia with capacity to process 14 million m3/d as of January 2014, and will increase the capacity of the terminal in Guanabara Bay (RJ), from 14 to 20 million m3/d in 2013, so that in 2015, the company will have an LNG regasification capacity of 41 million m3/d. the US and has made the American gas market disconnected from the world market. There is no evidence that Brazil might follow a similar

course in the medium term. We need to gather information and analyze more exploratory data before considering the development of shale gas in Brazil.

We know that you want to reexamine the Petrobras Investment Plan to see where and when to start the divestment, since resources cannot be increased in the long run. Do discoveries of new reserves and E&P of oil production continue to be more important than natural gas? Offshore will continue to be a priority or does Petrobras intend to make onshore investments in the future? The divestment designed by Petrobras in the 2011-2015 Business Plan amounts to US$ 13.6 billion. A review of the Strategic Planning is done annually and is not restricted to any segment or business area of the company. Petrobras’s focus is to increase oil output, as provided in the 20112015 Business Plan. This is, therefore, our priority. Most investments, as provided in the Business Plan, are dedicated to offshore exploration and development.

under new management presidENT

Maria das Graças Foster direCTORS Engineering, Technology and Materials

Renato de Souza Duque

Financial

Almir Guilherme Barbassa

38 T&B Petroleum # 32

Exploration and Production

NEW

José Formigli Filho

NEW internaTional

Jorge Luiz Zelada

Gas & Energy

José A. Santoro Martins

NEW

Downstream

Corporate and Services

Paulo Roberto Costa

José Eduardo Dutra


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Photos: Courtesy ANP

ANP

President Dilma Rousseff and Magda Chambriard

Tough stance at the ANP

by Beatriz Cardoso

With an impressive record as exploration superintendent at the National Petroleum, Natural Gas and Biofuels Agency (ANP), Magda Chambriard, new general director of the agency is expected to maintain a tough stance, from the well all the way up to the office, literally. 40 T&B Petroleum # 32


Interview with Magda Chambriard, general director of the National Petroleum, Natural Gas and Biofuels Agency (ANP) “You’re correct when you say that our laws are too soft. The Law of Penalties was done for the fuel supply and resale sector. It did not include the upstream segment”, states Magda, who took over as ANP general director in a ceremony attended by President Dilma Rousseff, and Petrobras President Graça Foster. “In Magda, Brazil has a symbol of people who are promoted based on merit, ability and dedication”, stated Ms. Roussef during the investiture ceremony of the former Petrobras oil worker who has promised to be rigorous with inspections and punish those who commit violations and accidents. Due to her tough stance, similar to the stance of Petrobras’s president, the market is beginning to say that the Brazilian oil industry is now under the command of iron ladies. And, which is completely adequate for a sector that has such an impact on many different segments of the economy and society. TN Petróleo – You have stated that everything is ready for the new bids. Does that apply to the different types of bids: pre-salt, offshore and onshore exploratory blocks, marginal fields? Magda Chambriard – Only the 11th Bidding Round, which was approved by the National Energy Policy Council (CNPE) at the end of April 2011, is ready. We are waiting approval from the Federal Government to go ahead with it. The other rounds are not ready yet. The ANP continues to conduct studies of the areas with oil and gas potential in Brazil. We are expanding our knowledge of the Brazilian subsoil by carrying out the Multiannual Plan. We are planning to invest R$ 1.5 billion from 2007 to 2014 in geological and geophysical studies and surveys of 22 Brazilian sedimentary basins. Which bids are first? When? I believe the 11th Round is going to be first. We are still waiting for decisions from the government to carry out the others. In your opinion, which areas are expected to attract the most attention? Or due to the lack of bids during the past three years, is there a huge demand? I believe any area offered in Brazil is going to attract a lot of attention. The oil industry is going

through a very promising moment. We have many areas with huge potential. In Mato Grosso, we have gas seeps in a stretch of 800 meters of Rio Teles Pires. There are also good gas prospects in Maranhão, Piauí and Minas Gerais. I am also very optimistic about onshore sedimentary basins. The pre-salt is a huge attraction due to its promising carbonate rocks as the most promising at the time. However, some say that there might be surprises in the pre-salt? Do you believe this or has the era of turbidites ended? The Brazilian pre-salt area has the potential for huge discoveries, especially the cluster area of Santos Basin, which has unique geological features that favor the accumulation of huge oil deposits (Lula, Iara, Guará, Franco, Libra, among others). The main geological difference is the presence of a huge structure called the “São Paulo Plateau” and the presence of great layers of salt. The presence of carbonate reservoirs have been known to exist in Campos Basin since the 1980s. Turbidites are common in Campos Basin and huge oil accumulations have been found in this type of reservoir. Reservoirs have excellent permo-porous conditions with good lateral continuity. Brazil has many areas to explore and it is probable

that many discoveries are still going to be made in turbidite reservoirs. In the past, you mentioned other important areas that deserve more attention, such as the Brazilian equatorial margin and the south of the country. What are the prospects for investors in the Brazilian equatorial margin? The Brazilian Equatorial Margin presents a highly promising potential for oil given the numerous findings detected in the sedimentary basins of this region and the production fields of Potiguar basins – offshore and Ceará; confirmed by the recent discoveries off Western Africa and by the offshore discoveries of neighboring countries (Guyana, French Guyana and Suriname). Moreover, the oil detected in these basins is light oil of excellent quality, similar to light Arab oil. Lastly, the Brazilian Equatorial Margin is next to the world’s biggest oil consuming markets (USA and Europe). And what are the attractions in the south of Brazil? Infrastructure; South America’s biggest consumer market. What is ANP’s strategy to incentivize exploration in onshore areas of Brazil? What are the most promising onshore scenarios? To incentivize onshore exploration, the ANP has been systematically investing in the acquisition of new geological and geophysical data through the Multiannual Plan of Geological and Geophysical Studies. The PPA of the ANP was implemented in 2007 and since then the Agency has invested some R$ 500 million. Ten projects are under contract and in progress (3 seismic surveys; 2 geochemical surveys; 3 MT surveys; 1 geological evaluation project, 1 former seismic data processing) that combined amount to T&B Petroleum # 32

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ANP

The Brazilian pre-salt area has the potential for huge discoveries, especially the cluster area of Santos Basin, which has unique geological features that favor the accumulation of huge oil deposits (Lula, Iara, Guará, Franco, Libra, among others). The main geological difference is the presence of a huge structure called the “São Paulo Plateau” and the presence of great layers of salt. some R$ 250 million in investments. The PPA is financed by the Federal Government’s Growth Acceleration Plan (PAC) and is designed to acquire data from basins in the exploratory frontiers. The studies carried out by the ANP have obtained some highly positive results in the Parnaíba Basin, Parecis Basin, São Francisco Basin and even in the Acre Basin. In the Parnaíba Basin, the ANP has invested more than R$ 100 million and continues to invest. All the blocks in the Parnaíba Basin were bid in 2007 and two gas fields have declared commerciality. In the past five years, where have the ANP and operators acquired more data thus expanding the database of Brazilian basins? Data acquisition by the ANP Parnaíba Basins (aerial survey + 2 2D seismic + geochemical), São Francisco (aerial survey + 2D seismic + geochemical + BAFRAN), Paraná (= aerial survey + 2D seismic), Parecis (2D seismic + geochemical + MT), Amazonas (aerial survey + 2D seismic + MT), among others. Moreover, the Equatorial Margin has gotten the attention of Data Acquisition Companies (EAD). 42 T&B Petroleum # 32

And, in the near future, which areas are going to be prioritized for data acquisition, mainly by the ANP, to fill existing gaps? We are primarily thinking about continuing our investments onshore, with the aim of discovering more gas inside the country. However, there is also the exploratory effort provided for the pre-salt. Brazil has a large number of mature fields, which have been explored for more than four decades. Do you think most of them are going to go to independent producers or, as stated by Graça Foster, if they lack resources and operational and flow infrastructure, Petrobras should not get rid of what it has? I would not put it like that. Small producers, just like big producers, need a vision of the future. No one goes into a business without a prospect for growth. For me, it is very important to have a huge basin ready for exploration, in addition to revitalized mature ones. Independent producers complain that the biggest hurdle is in the supply, transporting production, mainly gas. What does the ANP and the

government plan to do to lessen this problem, which has been affecting independent producers? At the end of April 2011, the CNPE approved a draft resolution that establishes a policy for small and medium-size oil companies. This draft contains some important measures for small producers, such as the permanent offer of areas in mature basins. These measures still need presidential approval. Enhanced recovery has been a focus of Petrobras, which makes heavy investments mainly in mega fields, such as Marlim. Do you believe these fields, despite their maturity, are going to support the increase in production and that Brazil has technology to further expand the in situ oil recovery index, behind the impressive Norwegian benchmark of 62%? I am not sure what you are calling enhanced recovery at Marlim.


Interview with Magda Chambriard, general director of the National Petroleum, Natural Gas and Biofuels Agency (ANP)

The best way to prevent these incidents is through inspection and monitoring so that accidents do not happen. After they happen, we have to learn from our mistakes. But, you are right when you say that our fines are too low. The Law of Penalties was done for the fuel Magda Chambriard and Graça Foster, Petrobras But, there is certainly room for new exploitation of huge oil producing fields such as Marlim. Everyone knows that accidents happen, but, in this industry, prevention is necessary. What are the gaps in the legislation and in the inspection of exploratory activities that could reduce the risk of these accidents, so that accidents are reported faster? Concessionaires report accidents right away. Since 2009, when the period for companies to adjust to Resolution 43/2007 ended, the ANP has intensified offshore inspection activities. ANP technicians received extensive training in Brazil and overseas. I do not see gaps in the legislation, but I think there is always room for improvement. This is an international debate. We are also establishing a better working relationship with risk regulating agencies from other developed countries. This exchange of information is very important for us to remain updated. In Australia, for instance, the exploratory framework recently underwent changes. The same happened in the USA, because of the accidents in Montana and Macondo. Do you believe that fines and penalties are still too lenient against

supply and resale sector. It did not include the upstream segment. companies responsible for accidents that lead to loss of human life and environmental damages? Should they be more severe? How can these incidents, such as the one involving Chevron in Brazil, be prevented? The best way to prevent these incidents is through inspection and monitoring so that accidents do not happen. After they happen, we have to learn from our mistakes. But, you are right when you say that our fines are too low. The Law of Penalties was done for the fuel supply and resale sector. It did not include the upstream segment. Moreover, the fines we apply to a small LPG reseller are the same as the one we apply to a big distributor, such as BR or Cosan. We have to adjust this law for the huge diversity we have in Brazil. Lastly, the ANP may prohibit an oil company from operating within the country in extreme cases of violations or incidents. Does this violate the principle of isonomy, since the market is open to all those capable of operating offshore? We plan to work emphasizing the “culture of safety”, and increase scrutiny on risk analyses, change management and personnel training. We are also thinking of ways to empower Brazilian branches. It

is impossible to conduct operations outside of São Ramon or New Delhi, for example. Brazilian legislation establishes rules that determine if the operator is A, B or C. To be an A operator, the company has to prove to the ANP that it is capable of deep water and ultra deep-water exploration. The requirements are conducive to the risk that the operator is going to assume. Moreover, when a company operates a concession it confirms to the country whether it is capable or not. Lastly, to avoid huge accidents, mainly in complex areas such as offshore, the ANP could toughen rules regarding fines and penalties but, also, regarding the qualification of companies that operate in deep and ultra deep water? That is: make the “qualification” process more demanding, including, among others, record of incidents (or of HSE) of the oil companies requesting authorization to operate in offshore areas? The accidents took place in operations of big oil companies with proven international experience. The operational safety regulation in Brazil is one of the advanced in the world and will be improved whenever necessary. T&B Petroleum # 32

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shipbuilding industry

With the boom in the oil & gas industry fueled by Petrobras and other domestic and foreign companies, orders in Brazilian shipyards continue to pick up. Construction of offshore platforms, modules, rigs and vessels is intensifying. New shipyards are springing up in the country to provide more support to this growing industry.

Shipyards in full swing by Rodrigo Miguez

44 T&B Petroleum # 32


Photo: Keppel Fels image bank

A

ccording to data of the Brazilian Union of Shipbuilding, Ship repair and Offshore Industries (Sinaval), the number of orders placed with Brazilian shipyards stands at 312 shipbuilding and platform projects, which amount to 6.2 million deadweight tons (DWT). Of the 18 oil-producing platforms under construction, 13 will be built in Brazil. Moreover, 28 rigs for Petrobras are going to be built in Brazil, which changes the notion that this type of equipment could only be made overseas. This opens the way for a new realm of business opportunities for Brazilian shipyards. Financing priorities approved at the two meetings of the Administrative Board of the Merchant Marine Fund (FMM), in 2011, amount to US$ 8.3 billion for shipbuilding and US$ 2.8 billion for the implementation of eight new shipyards and the expansion of three existing ones. In December 2011, the Aliança Offshore industrial unit, which will build blocks for the construction of maritime support ships at Aliança Shipyard, in Niterói (RJ), was inaugurated in São Gonçalo (RJ). According to the Brazilian Association of Shipbuilding and Offshore Companies (Abenav), Brazil’s shipbuilding and offshore industry has recently increased its contribution to the country’s economy, and is headed toward sustainability and international competitiveness. “We estimate that in the near future industry demand will be on average a million tons a year, taking into account the orders of Petrobras until 2020. Considering the shipyards in operation today, expansion projects and new projects being implemented, Brazil T&B Petroleum # 32

45


Photo: Estaleiro Mauá image bank

Inhaúma Shipyard, RJ

Photo: STX OSV image bank

Mauá Shipyard, Niterói

Photo: Marcos Almeida, Petrobras

shipbuilding industry

will be able to meet this demand”, guarantees Augusto Mendonça, Abenav president. For Mendonça, domestic shipyards have to make investments in technology and R&D in order for Brazil’s shipbuilding industry to grow and compete against Asian shipyards. “Brazil is beginning to

46 T&B Petroleum # 32

STX OSV Shipyard, Niterói invest in research, development and innovation. Every country that became a leading player in shipbuilding and offshore production has research centers and laboratories especially designed to meet production,” he stated.

Order Book Atlântico Sul Shipyard (EAS – The Atlântico Sul Shipyard (EAS) currently has a solid order book and year after year becomes one of

the main drivers of Brazil’s shipbuilding industry. EAS is the only shipyard in the country to join the select group of fourth-generation shipbuilding plants, equal to the most modern Asian shipyards. The company is able to process some 100,000 tons of steel a year, thanks to the Goliath cranes, which are able to hoist 1,500 tons, at a height of 100 meters – equivalent to a 33-storey building – and a span of 164 meters. They can be operated simultaneously and reach a capacity of 2,700 tons. EAS is the first shipyard in Brazil to use mega-block technology, which substantially reduces dry dock time. EAS’s orders include 22 oil tankers (14 Suezmax and 8 Aframax), the first seven drilling vessels built in Brazil and naval services at platform P-62. Suezmax João Cândido will be the first ship delivered by EAS at the beginning of the year. Zumbi dos Palmares, another Suezmax, is scheduled for delivery in the second half of 2012. The drilling vessels are in the initial phase of project preparation and detailing. According to EAS, the first drilling vessel will be delivered in 2015. Rio Grande Shipyard – Another shipyard with important orders from Petrobras is Rio Grande Shipyard, which, in addition to platform P-55, has an order for eight new hulls that will be used at FPSOs P-66, P-67, P-68, P-69, P-70, P-71, P-72 and P-73, which will explore the pre-salt of Santos Basin. According to Rio Grande Shipyard, the first P-66 hull is slated for delivery in the second half of 2013. In order to improve its operating capacity, the shipyard recently acquired a second gantry crane to complement the 600-ton capacity, 133 wide gantry crane in operation. Slated for operation at the end


shipyards in full swing

of the 2013, the new gantry crane will have a width of 210 meters, and will have an additional side area for pre-building and handling of blocks of up to 2,000 tons. It is currently being manufactured in Finland and South Korea. Mauá Shipyard – One of Brazil’s oldest and most traditional shipyards, Mauá also has a lot of work to do in the upcoming years. Its order book includes eight ships for Transpetro, which are part of the Fleet Modernization and Expansion Program (Promef). Four 48,000 DWT ships designed for the transportation of Light Products and four 72,900 DWT ships designed for the transportation of Light and Dark Products. Of the 48,000 DWT ships for the transportation of Light Products, the first one was delivered in November last year, and the other

three have already been launched and are being completed at the dock. Delivery of the second and third ships should take place this year, and the last one is due at the start of 2013. Of the four 72,900 DWT ships for the transportation of Light and Dark Products, the first ship is in the building stage in the slip, with launching slated for the end of July 2012 and delivery due in March of next year. The second ship is in the steel processing and block manufacture phase, while the third and fourth ships are in the steel and equipment order phase. The last three ships in this batch will be delivered by mid 2014. In addition to these orders, Mauá Shipyard executed contract with Transpetro for the construction of eight more oil tankers. According to the shipyard, these new contracts are in the initial phase of request-

7

21

ing financing with the Merchant Marine Fund (FMM). Delivery of the first vessels is due at the end of 2014 and the last is slated for the second half of 2016.

Renovation and construction OSX – During the revival of the shipbuilding industry in the past ten years, many companies felt the need and the opportunity to build new shipyards, and investments have been growing to this end. In July 2011, shipbuilding company OSX, an EBX group company, began building the Açu Shipbuilding Unit (UCN Açu) – the biggest shipyard of the Americas. Currently, 52% of the work is under contract, and the project is in the earthmoving, work site setup, construction of the access channel and breakwater phases, at the area of the Açu

T&B Petroleum # 32

47


shipbuilding industry Super port Industrial Complex, in São João da Barra (RJ). With investments of US$ 1.7 billion, UCN Açu will have a total area of 2.5 million m², expandable to up to 3.2 million m², and a dock of 2,400 meters, with capacity for expansion to up to 3,525 meters. The focus of OSX Shipbuilding is the process, manufacture, assembly and integration of hulls, as well as the manufacture of topside modules for offshore units such as: FPSOs, fixed production platforms (WHPs) and floating platforms (TLWPs), drilling vessels and oil tankers, with emphasis on operational efficiency and state-ofthe-art technology. During the initial phase, UCN Açu will be able to integrate up to six FPSOs and build up to eight fixed platforms (WHPs), simultaneously. Moreover, it will process 180,000 tons of steel per year, expandable to 400,000 tons per year, and integrate 220,000 tons per year. At the end of February, Sapura Navegação Marítima ordered a Pipe-Laying Support Vessel (PLSV) from OSX to the tune of US$ 263 million, to be built

drilling rigs 7 for the Pre-salt: in the Atlântico Sul Shipyard

21 for the Pre-salt and

other locations: 6 in the Keppel Fels Shipyard, 6 in the Paraguaçu Shipyard, 6 in the Jurong Shipyard, 3 in the Rio Grande Shipyard and 2 in the OSX Shipyard (under negotiation)

and delivered at UCN Açu. The PLSV is designed to lay and install

Completion of platform P-55, which will have capacity of produce 180,000 barrels of oil and four million m3 of natural gas per day, is taking place in Rio Grande (RS). The Atlântico Sul Shipyard (EAS) built the hull in Pernambuco and integration and completion of the structure will be carried out at the Rio Grande Shipyard (ERG) by Quip, at the cost of US$ 900 million. The hull of platform P-63 should arrive by mid 2012 and, like P-55, will also be implemented by Quip. The P-55 hull contract marked EAS’s debut in the offshore industry and permanently consolidated the company’s entry in the sector. The

48 T&B Petroleum # 32

Foto: Divulgação Estaleiro Atlàntico Sul

P-55: almost ready

lower hull – with 25,000 tons, 44 meters in height and a base of 94 meters x 94 meters – is the biggest semisubmersible platform (FPU) hull ever built in Brazil. Production of this hull added know-how and value to the company and the region. We created a

flexible submarine lines on the seafloor. Inhaúma Shipyard – Leader of ship and platform orders, in 2010 Petrobras signed a 20-year lease for the former Ishibrás shipyard, now called Inhaúma Shipyard, and, which at first is going to be used for hull conversion of four FPSOs platforms for the fields of the Transfer of Rights in the Pre-salt of Santos Basin, which currently takes place overseas. With a 7-meter draft, the site will also serve as a support base for Petrobras’s barges, in addition to being used to support various operations, taking advantage of its draft. Since last year, Kromav, which specializes in engineering projects and services, has been revitalizing the shipyard so that it becomes suited for the needs of the state company. “We’re going to change the layout of the shipyard’s machine and equipment warehouses”, said Kromav director Ricardo Vahia. new frontier for the country’s offshore industry. P-55 will be installed at the Roncador field in Campos Basin, and its project stands out because of the Mating operation of the Lower Hull to the Deck box, one of the biggest and most complex hoisting operations in the world. In the operation, the Deck box weighing more than 17,000 tons will be lifted to a height of about 50 meters (equivalent to a 14-storey building), in an operation unmatched in the world due to its dimensions. Construction of P-55 has impressive numbers given the handling of 13 million kilos of metal structures, two million kilos of pipelines, 270 km of electric cables and 230 km of logic and instrumentation cables.


According to Petrobras, the revitalization of Inhaúma was divided into various jobs through different contracts. The restoration of Dyke 2, which includes the revitalization of the civil structure, supply and installation of the new ship maneuvering system, is due to be completed by May 2012. Currently, demolitions are practically over and setup and concrete projection on the dyke walls are getting underway. The renovation and facility adaptation contract involves the recomposition of the infrastructure systems, reconstruction of Dock 1, construction of the industrial kitchen and cafeteria, renovation of the reception and installation of new industrial cranes to support Dock 1 and 2 and Dyke 2. All these services are due to be completed by March 2013 and, currently, the cranes are being manufactured in

China, and the detailing project and demolitions are underway. The plate handling, cutting and welding workshops – required for shipbuilding work – will be restored and equipped by the contractor to convert the hull of the Transfer of Rights, whose bidding process has not yet been completed. Lastly, dock drainage, turning basin (area in front of the shipyard where ships are maneuvered) and access channel works are in the environmental licensing phase. The first platform of the new Inhaúma Shipyard will be P-74, whose ship to be converted into the hull is moored at the Port of Rio de Janeiro and should be transported to the shipyard in June. By 2013, work on P-75, P-76 and P-77 will also get underway. Promar Shipyard – Group STX OSV, which is building the Promar

Shipyard at the Suape Industrial Complex, in Pernambuco, at an area of 250,000 m2, is also in full swing. The shipyard will have capacity to process 20,000 tons of steel per year and will have compartments for painting blocks. Vessels will be built in two areas of 150 meters x 40 meters and sea launch will be through Load Out, using Floating Dyke. Finishing will be done at the 212-meter long and 8-meter draft dock. The shipyard is expected to start operating in the second half of 2013 by starting construction on eight gas tankers for Transpetro in parallel to the completion of the shipyard. Others – Other shipyards under construction are the Rio Grande 2 Shipyard (ERG-2), which is in the construction phase of the block factory for 8,500 tons/month and the Rio Grande 3 Shipyard (ERG-

T&B Petroleum # 32

49


shipbuilding industry

Ilustração: Divulgação UCN Açu

FPSO

6 P-57, Cidade de UCN AÇU Shipyard, São João da Barra 3), which is in the phase of obtaining the Installation License (LI). Jurong Aracruz, in Espírito Santo state, is another shipyard that is going to be built to meet the demand of the oil & gas sector. With an R$ 800 million project, the shipyard was hired to build six rigs for Petrobras and, according to the company, the shipyard should be totally finished by 2014 – but in 2013, it will have the necessary conditions to operate. In addition to these projects, “Estaleiro” do Brasil (Shipyard) (EBR), which will be next to the Rio Grande Shipyard, is also

going to be built in southern Rio Grande do Sul state. Located in São José do Norte, the shipyard will require investments of US$ 420 million, and will have three times the area of ERG and a steel processing capacity six times higher. The work will take two and a half years, but environmental licenses are still pending, which are due for the second half of the year. The new maritime platform construction area, equipped with a dry dock, will occupy 1.5 million m2 and will be able to process 110,000 tons of steel per year.

Heavyweight order Thirty rigs for six shipyards With only a year of existence, Sete Brasil won the charter bid for 30 rigs that will operate in the presalt – 28 are for Petrobras and two spot – with delivery for 2020. With an investment of US$ 27 billion, the rigs will be built by six shipyards; three have been hired (Keppel, Jurong Aracruz, Atlântico Sul) and the others are in the negotiation phase (Enseada do Paraguaçu, OSX and Rio Grande 2). The operation of the rigs being built will be carried out by Etesco, Odebrecht, Odfjell, Petroserv, Queiroz Galvão and Seadrill. With charter contracts of US$ 530,000/day, the company will be the biggest fleet manager in the world. Sete Brasil is made up of eight investors - Petros, Funcef, Previ, Valia,

50 T&B Petroleum # 32

Bradesco, BTG Pactual and Santander plus Petrobras with a 10% stake. The company has R$ 1.9 billion in capital, and stated that Luce Drilling and EIG are two of the company’s newest investors that will contribute up to R$ 800 million if needed. The rigs will be owned through a partnership of Sete Brasil with shipyards, which Sete Brasil hires to build the rigs. Rigs will have an average local content of 62%. “We want to be part of this enormous opportunity that is the pre-salt”, stated the president of Sete Brasil, João Carlos Ferraz,

Paraty and Cidade de São Paulo: Brasfels Shipyard; P-58, P-62, P-63: Quip cosortium.

rumunerated as4 onsignment: Inhaúma

Shipyard (P-74, P-75, P-76 and P-77)

8 hulls/replicas: Rio Grande Shipyard (P-66, P-67, P-68, P-69, P-70, P-71, P-72 and P-73)

who assured that the company is in the business of investing and does not plan to operate equipment. “Sete Brasil is an investment company designed to build rigs, we’re not operators, we’re not going to be and don’t want to be equipment operators. We want to manage the portfolio. Our business model will always be based on a partnership with an operator, where we go in with our expertise”, he concluded. Monodrilling type rigs, which require less crew for operation, will be built. According to João Carlos Ferraz, projects will be alike, so less time and resources will be spent on them. Of the seven rigs, the first ones will be built at the Atlântico Sul Shipyard (EAS) and of the batch of 21, the first ones will be delivered by Brasfels. By the end of April, Sete Brasil should have executed all the contracts with the shipyards. Delivery of the first rig from this batch of 21 is set for June 15, 2015.


Photos: MCS Image Bank and Petrobras Agency

shipyards in full swing

Installation contractor for offshore industry Services Modec International LLC: installation contractor for the projects FPSO Cidade do Rio de Janeiro, FSO Cidade de Macaé, FPSO Cidade de Niterói and FPSO Cidade de Santos – mooring and risers installations procedures; logistics and materials specifications; anchors installation surveyor. Prosafe: FPSO Polvo – Mooring Masters for towing and positioning. Petrobras: four more Pelikelos (350 ton) to perform torpedo lauching, mooring services on onshore terminals; oil spill booms; oil spill recovery. MCS is authorized to operate as a Brazilian shipping company by Antaq – The National Agency of Maritime Transportation.

Av. Nilo Peçanha, 26 - grupo 904/905, Centro ISO 9001

CEP 20.020-100 – Rio de Janeiro – RJ – Brazil Phone: +55 21 2524-0296 – Fax.: +55 21 2532-4671 mcs@mcsengenharia.com – www.mcsengenharia.com T&B Petroleum # 32

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ogx

first oil

Photos: Divulgation OGX

With OSX starting oil production, Brazil’s oil & gas industry has entered a new stage, in which an increasingly number of Brazilian companies are joining a sector previously dominated by Petrobras. by Rodrigo Miguez

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“OGX’s first oil, after discovering Waimea just over two years ago, represents a rupture of another paradigm in the oil industry and demonstrates the speed of execution and result-oriented focus of EBX Group”, commented OGX CEO, Eike Batista. “With Waimea, OGX becomes the first Brazilian private operator to produce offshore oil in the country”, added Batista. The Waimea accumulation was discovered in December 2009, and is OGX’s first field to start producing in shallow waters in Campos Basin. Following the injection of fluids, which got underway at well OGX-26 on January 28, the well was opened for production on January 31, 2012, in block BM-C-41. The LDT at Waimea also marks the start of the company’s cash generation with the sale of two shipments (600 million barrels each), to Shell executed last October, which amount to 1.2 million barrels. The oil is going to be processed in one of Shell’s refineries. Over the next few months, the company’s production team is going to test different flow rates in an attempt to stabilize well production at around 15,000 barrels per day. According to company estimates, the declaration of commerciality at Waimea will take place in the first half of the year, following the acquisition of additional and conclusive reservoir data. The produced oil will be stored and treated at FPSO OSX-1, which is able to process 60,000 barrels of oil per day and has a storage capacity of 900,000 barrels. The oil will then be transferred to a relief tanker en route to commercialization. After confirmation of the

reservoir ’s commercial viability through LDT, OGX is going to start the production development phase, which will include two additional production wells connected to this FPSO. Two water injection wells may also be used in order to help maintain the reservoir ’s pressure levels and optimize production, thus increasing levels between 40,000 and 50,000 barrels per day through the second half of 2012.

Well specifications Directional well – 3,746 meters deep Horizontal well – 1,000 meters in extension Productivity index (pi) – 100 m³/day/kgf/cm² Selective acidification in eight intervals The drilling of OGX’s first production well was carried out using state-of-the-art technology and had the unique experience of its technicians and partners,

which includes, among others, multinational company Schlumberger. Through an innovative model of integrated services offered to OGX, Waimea well achieved all operational expectations. In the total project, Schlumberger’s integrated services reached a high level of efficiency with an NPT (non-productive time) record of just 2%, which led to economic benefits for operations management and cut well costs for OGX. Schlumberger developed the entire well engineering and design, including all services starting with the drilling up

to completion and execution at Waimea. The company also installed the wellhead and stimulated eight sections of the openhole horizontal completion. All services were carried out using FlexSTIM, a modular offshore stimulation vessel recently made available in Brazil to provide support to OGX’s operations in Campos Basin. A technological milestone achieved during the operation was the first horizontal completion in multiple stages in a T&B Petroleum # 32

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ogx

Timeline December 2009 – Discovery of Waimea accumulation via well OGX-3. February 2010 – Execution of formation test at well OGX-3. August 2010 – Start of customization of FPSO OSX-1 in Singapore. September 2010 – Drilling of first offset well for Waimea accumulation. October 2010 – Well OGX - 21D confirms extension of Waimea reservoir. January 2011 – OGX receives first wet Christmas tree. February 2011 – Drilling of well OGX26 completed, first Waimea production well. Boomercables for the anchorage system of FPSO OSX-1 arrive in Brazil. March 2011 – Disconnectable buoy becomes ready in Indonesia. April 2011 – Arrival of stakes for anchorage system of FPSO OSX-1. May 2011 – Delivery of steel cables for anchorage system of FPSO OSX-1. July 2011 – Public hearing held for production licensing. August 2011 – OSX-1 and disconnectable buoy en route to Brasil. September 2011 – OGX obtains preliminary license and installation license for Long Duration Test at Waimea. October 2011 – Execution of first commercialization contract for Waimea oil. FPSO OSX-1 arrives in Rio de Janeiro. December 2011 – Equipment installation completed and OSX-1 leaves Port of Rio. January 2012 – OGX obtains Operation License for start of production. OSX-1 en route to Campos Basin. Start of Long Duration Test and first oil production.

54 T&B Petroleum # 32

carbonate formation in Brazil. As a result, the well was completed with a horizontal section of 1,000 meters, which allowed 74% contact with the reservoir. Looking to maximize reservoir oil flow, OGX also used a complex process of selective acidification in eight well intervals, which enabled better stimulation of the 1,000-meter horizontal well extension. “Extracting the first oil is fruit of rigorous work by all of the company’s work fronts, which we see being reproduced in the various Brazilian basins where we have discovered accumulations”, commented OGX managing

director for Exploration, Paulo Mendonça. For the successful extraction of OGX’s first oil, the company used a set of equipment, such as a disconnectable buoy of 17 meters in height, 14 meters in diameter weighing more than 700 tons. In addition to an anchorage system made up of stakes, boomercables and lines. The project’s undersea system is made up of flexible pipelines supplied by Wellstream used for the well’s production flow, and flexible pipelines from Oceaneering, made up of hydraulic hoses and electrical cables that control the valves of the wet Christmas tree (WCT), provided by GE Oil & Gas and a submerged centrifugal pump supplied by Baker Hughes, installed inside the well to assist oil production and flow. According to OGX, the next accumulation to start producing is going to be Waikiki, located in block BM-C-39, in Campos Basin, in 2013, thus intensifying the development of the company’s oil production in the region.

Chemtech wins project for OSX platform Leading the consortium with Kromav and Exactum, Chemtech has prepared basic and detailed engineering projects for the implementation of the OSX Flex concept in FPSOs of the EBX Group company. The project will be used to build the first FPSOs at OSX’s shipyard at Açu Port, in São João da Barra, northern Rio de Janeiro state. The engineering projects will be developed at Chemtech and should be completed within 18 months. The CKE Consortium will also be responsible for technical assistance during building and assembly of the

units and for the technical assistance during the supply of material and equipment. “OSX Flex is an innovative proposal. This project is going to standardize the contract of modules and consequently speed up ship engineering and construction, it will also facilitate the planning of the production operation”, explains Chemtech’s commercial leader, Hermano Ferreira. The CKE Consortium participated in other important projects for domestic platforms, namely P-58 (basic project) and revitalization of PCH-1, both belong to Petrobras.


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event

OTC 2012 Safety is top priority by Rodrigo Miguez

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Photos: T&B Petroleum Image Bank

Focused on new sector technologies and operational safety, the 43 rd Offshore Technology Conference (OTC) marks the 13 th consecutive participation of the Brazil Pavilion. It is also the first time that Petrobras is not going to have a stand at the event, which has already awarded the company two of the most important international awards.

Exhibition area: 568,000 square feet Visitors: 73,000 Companies: 2,400 Countries: 40

S

till feeling the effects of the global crisis that has hit most of the Western world, the Offshore Technology Conference (OTC) brings together players from all over the world to Houston, USA, from April 30 to May 3, to discuss, among other topics,

issues of hydrocarbon exploration safety in the new scenarios, such as the pre-salt. The 43rd edition of the world’s main oil & gas offshore sector event, for the first time in a very long time (for at least more than a decade) is not going to have a Petrobras stand, which has been the highlight as one of the most sought after players in the fair.

Petrobras did not disclose why it was not going to reserve an area and simply stated that the decision was made after an internal analysis. Despite not having a stand, with technical sessions and exclusive lectures and visits to assets in the United States, professionals from Petrobras will take part in various technical sessions, presenting works on the challenges and advances made in developing important projects for oil & gas exploration and production in Brazil, for both the pre-salt and post-salt. One of the sessions will be dedicated to Marlim field, with highlight to the subsea separation system used by the company in this mega-reservoir T&B Petroleum # 32

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event

of Campos Basin. In another lecture, technicians from Petrobras’s economic area are going to discuss the evolution of oil & gas reserves considering fluctuations in oil price. Organizers expect that the number of participants is going to surpass last year’s total of 2,520 companies from 41countries, which occupied an area of 56,000 square meters at Reliant Park, in Houston, Texas. Two hundred, ninety-one technical projects were presented in 48 conference panels and 78,645 people from 110 countries attended the event.

Brazil Pavilion Organized by the Brazilian Petroleum, Gas and Biofuels Institute (IBP) and by the National Organization of the Petroleum Industry (Onip), the Brazil Pavilion, which is in its 13th edition, will have 54 companies, including trade associations that represent the oil & gas sector, 20 participants more than last year. Of the 54 participating companies, 10 are debuting in the event, which last year had 46 Brazilian companies. Actually, 2012 will have two Brazilian pavilions, in addition to the Brazil 58 T&B Petroleum # 32

area, with an area reserved for Brazilian companies 140 m² bigger than in 2011, with the addition of another stand. Due to Petrobras’s absence, the Brazil pavilion was expanded, allowing more companies to participate in the 2012 edition. According to Onip superintendent, Bruno Musso, the 2012 pavilion is going to have important Brazilian institutions, with extensive participation in the sector, such as Sebrae-RJ, Firjan and Port of Suape. “The Brazil pavilion is an initiative geared towards promoting exports of Brazilian companies that supply goods and services for the oil sector, and these institutions will perform a complementary task of identifying possibilities for institutional cooperation and cooperation between companies, in addition to attracting investments for Brazil”, stated Bruno Musso. Organizers expect to expand business opportunities for companies and sustain the growth of Brazilian companies in the international market.

According to Onip, Brazil has become the center of attention in various segments, which makes companies more interested in doing business with Brazilian companies. “As a whole, foreigners are now beginning to study Brazil. They want to know the rules that regulate the sector, have a better understanding of the issues concerning Local Content and they also have a lot questions about taxes”, concluded Musso. Another area that has been arousing interest from foreigners is how to invest in Brazil, in terms of partnerships and direct investment. For the Onip superintendent, the OTC is an exceptional tool to promote Brazilian products and technologies. Moreover, the company that exhibits in the Brazil pavilion receives special attention in the international market. Firjan (Federation of Industries of the State of Rio de Janeiro) is going to perform the role of promoting the competitiveness of Brazilian companies. This is one of the main reasons behind its unprecedented participation at the 2012 OTC. Focused on disclosing its edu-


OTC 2012: safety is top priority

Exhibition area: 8,500 square feet Booth: 1117, 1317, 1325 Companies: 30 Organizations: 8 Organization: ANP; IBP; Onip; CTDUT; Sebrae; Firjan; Abimaq; Abenav Participating Companies: Altona; Altus; Chemtech; Cotema; Flexomarine; Forship; Grupo GP; Grupo IFM; Jaraguá; Keppel Fels; Kromav; LabOceano; MCS Engenharia; Nuclep; Oceânica; Orteng; Petrolab; Poland; Porto de Suape; Radix; Rio Engenharia; Schulz; Soflex; Subsin; SSB; Technofink; T&B Petroleum Magazine (TN Petróleo); Tomé Engenharia; Vanasa; WEG

cational endeavors, through the National Industrial Education Service (Senai-RJ), innovative solutions in virtual, enlarged and 3D simulation used in the training and specialization of oil & gas sector professionals will be presented at the Brazil pavilion. In addition, Firjan expects to attract investments to the state of Rio de Janeiro and disclose innovative solutions available to the market, stated Glícia Curti Sant´Anna Carnevale, Oil & Gas Market Strategy manager at Firjan. “We expect this to be the first of many opportunities, and in the

near future, through structured actions, we expect to be able to support local businesspeople that are looking to expand internationally. We are very optimistic and look forward to a successful event”, concluded Glícia. Schulz, which is participating in the fair for the second time, is going to present seamless pipes manufactured in the United States, with Brazilian raw material and clad pipes, the company’s new focus in the offshore area. The company wants to show its solid market presence with tubular and forged products. According to the company, the OTC is an important opportunity to make contacts in this segment, in addition to being a “start-up” for future orders. One of the main reasons for the company to participate at the OTC is to solidify Schulz in the offshore market by introducing products developed by its R&D department.

Technology & Research In the 2012 edition of the OTC, the Pipeline Technology Center (CTDUT) will focus on Loop 14, a pipeline dedicated to testing equipment and technologies for the pipeline transport

sector. This will be the fifth participation of the CTDUT at the event, which has been part of the Brazil Pavilion since 2007. In addition to Loop 14, the Technology Center is going to present its new laboratories, such as the completed Cathodic Protection and Casing Laboratory and the future laboratories of Tanks, Liquid Metrology, Accelerated Corrosion of Pipelines, Valves, Tests of Inspection Tools for Offshore and Onshore Pipelines and Multi-size Loops. For the CTDUT, the most important reason for participating in the OTC is the contact with a large number of potential clients in the US market, disclosing to operators, equipment manufacturers and service providers, the immense potential of the CTDUT to conduct tests and research. Another important player of the oil & gas technology development and research sector is the Oceanic Technology Laboratory at Coppe/UFRJ (LabOceano), which marks its fifth appearance at the 2012 OTC. LabOceano professionals will be at the Brazil pavilion presenting technological development and research projects in the naval and offshore secT&B Petroleum # 32

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event

tors developed along with big sector companies. Once designed, large-size systems and new vessel models should be tested and that is why LabOceano has the deepest tank in the world, with wind and wave generators and plans to install a system of currents. According to Paulo de Tarso Esperança, executive coordinator

at LabOceano, after the consolidation of the pre-salt in Brazil and the search for more efficient, far-reaching facilities, new technologies became necessary, and cooperation between technological centers

Foreign relations Created by Sebrae with the objective of promoting micro, small and medium size companies of the oil & gas commodity chain in the international market, Prointer (Internationalization Program for the Oil & Gas Commodity Chain) is dedicated to companies that wish to prepare for internationalization, improve their competitiveness and create partnerships with companies from other countries. To bring these companies even closer to their potential clients, Prointer is going to take a group of 41 Brazilian companies to the OTC in 2012, with the objective of fostering the technological development of small- and mediumsize Brazilian companies by exposing them to more advanced technological environments, and identify technologies applicable to them. 60 T&B Petroleum # 32

“In all the fairs that ProInter has taken part, our companies have made good contacts for the establishment of partnerships, joint ventures and technology transfer”, recalled ProInter coordinator, Miriam Ferraz. Sebrae has participated in the OTC since 2009 and expects to repeat the success of previous editions. The entourage is made up of successful companies with tradition in the domestic offshore market such as Mauá Shipyard, GComex Óleo e Gás, Liderrol and Tecnofink According to Miriam, the companies are looking forward to the event and have received all the support and

from around the globe became essential. He expects the event to be highly positive. “We plan to show the world the work developed in Brazil and to attract more technical, scientific and commercial partners to Brazil and to the laboratory”, stated Paulo. Petrolab, which has been part of the Brazil pavilion since 2004, will promote its products in the area of petroleum chemicals, notably “H2S Sequesters”. The company sees the OTC as an important chance to expand international business opportunities. Today, the company has operations in the Middle East, South East Asia and Africa. Moreover, the event is good for business, an ideal place to meet suppliers of raw materials and equipment. Traditional engineering company Kromav is going to present in the expo area of the Brazil pavilion, the company ’s guidance from the organizers. “We are preparing them for what to expect at the event and to make them aware so that they have meaningful meetings”, she completed. The general programming of the OTC 2012 includes presentations on new applications and solutions for the global market of Liquefied Natural Gas (LNG), new norms for platforms and innovations for FPSOs. Another issue that is going to be discussed at the event will be cementation of well in ultra-deep waters, which received international importance mainly after the accidents in the Gulf of Mexico and at Frade Field (Chevron) in Brazil. The OTC will also explore the latest developments in the offshore wind energy sector and energy generation for offshore exploration plants, in addition to discussing the direction of alternative energy.


OTC 2012: safety is top priority

main services for recently executed projects, such as the basic project of FPSO OSX-4 (a joint venture with Chemtech and Exactum) and the manufacturing project of a fixed platform for Techint. According to Kromac director, Ricardo Vahia, expectations of good contacts for future projects are high. “We expect to prospect new businesses overseas or even in Brazil and to create possibilities for new technological partnerships”, he stated. The company ’s main objective is to consolidate its name among the participants in Brazil that are actively taking part in the event and to establish deeper ties with Petrobras America.

Engineering With 26 years of offshore experience, in Houston, MCS Engenharia is going to present its experience in installing offshore units (FPSO) and technical support, consolidated by the services provided to Modec, Sofec, Devon and Shell. The ANP’s high local content requirements in oil & gas sector projects entice Mário Jorge Coutinho, of MCS. Since it is 100% Brazilian, the company expects to get potential clients during the event that need services from domestic companies to participate in its projects. “The OTC is a great opportunity to increase our international network of clients, who are interested in investing in

the Brazilian offshore market”, stated Mário Jorge. Another company that will have an important participation in the Brazil pavilion is Chemtech. Recognized as one of the most innovative companies and one of the fastest growing companies in the country and consequently in the oil & gas sector, Chemtech is going to present the progress of various upstream projects and will provide details about the Siemens/ Chemtech Research & Development Center for the oil & gas sector, which is being built at the Technology Complex of the Federal University of Rio de Janeiro (UFRJ). The center is expected to be completed in November of 2012. “For Chemtech, participating in the OTC in Houston is an opportunity to present new innovative solutions and our portfolio of offshore engineering services”, states Alex Freitas, commercial director at Chemtech. In 2012, Chemtech is engaged with the projects carried out with Cenpes (Petrobras Research Center) for the development of basic and conceptual projects for oil platforms and terminals for various exploration & production units of Petrobras, mainly in the pre-salt layer. Other highlights include basic and detailed engineering projects for the implementation of the OSX Flex concept, developed for the first FPSOs platforms to be built by the OSX Shipyard, at the Açu Superport Industrial Complex in São João da Barra, Rio de Janeiro. T&B Petroleum # 32

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3 rd Rio Gas Forum

event

Gas:

Great outlook & indecision

Photo: Courtesy

by Maria Fernanda Romero and Rodrigo Miguez

Brazil’s gas sector continues to do well: last year natural gas supply rose thanks to the start of production in the fields of the Santos Basin. The LPG and shale gas (unconventional gas) are now part of the country’s reality. However, the market is still skeptical about the future of this commodity, opportunities for new uses and production challenges at the pre-salt fields. To add to this discussion, for the third consecutive year, Rio de Janeiro hosts Rio Gas Forum, which is designed to foster the debate on global gas markets, especially the Brazilian market and its opportunities. 62 T&B Petroleum # 32

T

he meeting, sponsored by CWC Group along with Petrobras, allowed an analysis of the latest technologies to improve Brazil’s gas resources, in order to ensure that Brazil remains one of the global leaders in the gas sector. On the first day of the event, which was held in March at the Copacabana Palace Hotel, the Marketing & Commercialization executive manager for Gas & Energy at Petrobras, Antônio Castro,

highlighted the company’s advances in the sector – record profits last year, in addition to the start of gas extraction from the pre-salt. In 2011, Petrobras reached the record of 37 million m³ of gas per day delivered to the market. In December, monthly and daily records were established by supplying 46.1 million m³ to the market. “The rise in natural gas supply in 2011 was possible thanks to the start of production of Mexilhão, Uruguá and Tambaú fields, at Santos Basin”, stated Castro.


Another highlight was the start of the production flow from Lula field in September of 2011. According to Antônio Castro, gas from the pre-salt is now a reality in the Brazilian market and in Petrobras’s operations. In 2011, Petrobras ended a cycle of investments in the natural gas transport network, which totaled US$ 15 billion since 2007. Last year, operations of the Caraguatatuba-Taubaté Gas Pipeline and the Gas Treatment Unit in Caraguatatuba, both in São Paulo, got underway. With these investments, Brazil now has 42 compression systems and 173 points of delivery, with a gas pipeline network of 9,700 km of extension. Marcelo Castilho, a geology and geophysics specialist and assistant superintendent of the National Petroleum, Natural Gas and Biofuels Agency (ANP), highlighted the investments that Petrobras has been making since 2007 through the Multi-Year Plan of the Brazilian Sedimentary Basins, created to obtain more data on areas of exploratory interest, mainly natural gas. Data is being obtained through 2D and 3D seismic acquisition, an investment of R$ 1 billion by the end of the year. During his lecture, Marcelo pointed out that Brazil’s proven gas reserves stand at 423 billion m³, and that gas output in 2011 was 66.7 million m³ per day. According to him, onshore fields are the new exploratory frontier in Brazil’s natural gas sector, mainly Amazonas, Parnaíba and Paraná basins. Concerning the 11th Bidding Round of the ANP, Castilho said that the National Energy Policy Council has already authorized it, but that it still needs to be published in order to move forward. He mentioned that the round is going to bid 168 blocks, 84 onshore and 84 offshore. The commercial vice-president of BG Brasil, Marcelo Menicucci, is less optimistic. He says that Brazil is going to continue to import natural gas during the next years in order to supply domestic demand. “The pre-

salt gas infrastructure needs to be developed in order to make it viable for the market”, he stated. UOP LLC, a Honeywell group company, also attended the lectures during the first day of the event. In her lecture, Rebecca Liebert, vice-president and general manager of the Gas and Hydrogen Processing division at Honeywell UOP, talked about UOP’s Separex technology, membrane system and absorbent technology, which has been increasingly used in natural gas processing on FPSOs. The role of natural gas in energy generation was the first theme covered on the second day of the event. Marcelo Prado, Marketing director at GE Energy Latin America, presented the gas resources available in Brazil, and how the market is handling this demand. According to Marcelo, the role of natural gas in the market is increasingly more relevant and will be an essential source for Brazil’s energy generation. “During the next ten years, natural gas is going to play a more important role for domestic development, especially in Brazil and in Latin America. Thermoelectric generation will be used intermittently and as a complement, along with renewable energy – especially wind and solar – similar to what happened in Europe and the United States”, he stated. Prado stressed that gas turbines should have more flexible and efficient operation. The importance of natural gas for industrial growth was covered by Antônio Castro, marketing and commercialization executive manager for Gas & Energy at Petrobras. Brazil’s industrial gas consumption rose 14% from 2007 to 2011. According to Castro, industrial demand leads the market. “The foundation of Brazil’s solid and continuous gas consumption is the Brazilian industrial sector”, stated Castro. Castro talked about gas production in the pre-salt: “The gas that will lead to an increase in

production during the next ten years is going to come from Santos Basin”. He assesses that this gas will be used primarily to reinject wells, optimizing oil production. Another part will be used to offset decline in current production of other fields in the long-term. And a third part will go to new markets, such as fertilizer plants, refineries and petrochemical complexes. Eric Eyberg, Gas & Energy consultant at Wood Mackenzie, talked about development opportunities from unconventional gas (shale gas) in Brazil. He presented results and conclusions of various consulting studies recently prepared for consumers and producers on the São Francisco Basin. The analysis confirms the great potential of the region, which could be equivalent to Marcellus, in the US, in terms of size and resources. “Minas Gerais is an important hub in the existing infrastructure industry and sector such as high voltage power lines and the proximity to new gas resources could lead to expansions in other gas intensive industries”, he points out. The company believes in the global development of shale gas, with huge opportunities in Poland, China and South America. “Despite the favorable scenario in Brazil there are hurdles such as labor shortage, lack of an onshore services industry, technology for application, commercialization and regulatory system”, indicates Eyberg. In the same panel, Juan Jasson, LNG Business consultant at Shell, indicated LNG as a good option for Brazil given its competitiveness, accessibility and non-corrosion, and presented the company’s projects that use innovative technologies for application in the gas. Financial and regulatory issues that affect Brazil’s gas market were discussed by Luiz Daniel de Souza, manager of the gas department at the Brazilian Development Bank (BNDES) and by attorney Godofredo Mendes Vianna, partner of the law firm Kincaid Mendes Vianna Advogados.

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professional profile

A professional

of the world With 30 years of experience in the oil & gas sector, mechanical engineer Ricardo Chagas talks about his successful career path from his time as an intern to becoming director at Chouest and president of C-Innovation LLC in the United States. by Rodrigo Miguez

Photos: Bank of Images TN Petróleo

R

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icardo Chagas’s professional life began early at the age of 14, when he joined Senai as a turning, adjustment, tooling, metrology apprentice, among other specialities. At Senai, he completed a Mechanical Technician course and at the age of 17 was already putting his skills to work; however, he felt the need to have a diploma, so he got a degree in Mechanical Engineering in 1983. His first job was also the longest of his whole career. He worked at Metalock for 14 years and gained experience first as an assistant mechanical technician, then as a mechanical, hydraulic and field machining technician, until taking over as the company’s technical manager. With a professional vision in which professional growth should be a constant search, Chagas believes that the union of theory and hands-on experience is strategic to compete against his professional opponents. He recalls that the beginning of his career was hard – he used to clean parts full of grease from vessels. The oil & gas sector has always been present in his life – one of his duties was the repair of platforms and vessels. As a result of his involvement with sector companies, Chagas was invited to work at Pan Marine, the biggest maritime support company in the world… but this time the work was completely different from what he had been doing, the job was in the commercial area. He agreed to take on the challenge and his career embarked on a new phase. During the two years that he worked at Pan Marine, Ricardo was responsible for the company’s commercial, marketing and administrative areas in Brazil. He worked as a negotiator and mediator with Petrobras, and the so-called ‘new players’ i.e., Shell, Esso, Texaco, etc, of the domestic market, following the break-up of Petrobras’s monopoly. For Ricardo, the break-up of the monopoly was crucial for the evolution of the oil & gas industry in Brazil. “The end of the monopoly ushered in


changes that made the sector very optimistic, especially the new laws that allowed international companies to come or consolidate their business”, he stated. “Today, Brazil is in the world’s showcase in terms of business opportunities in the oil & gas segment”, he adds. An overseas professional - Ricardo’s experience over the years took him overseas. Invited by the vicepresident and CEO of Tidewater Marine, he landed in Mexico in 2002 to take over as the company’s Commercial and Marketing Manager, with the mission to reestablish ties between the company in Mexico and Petroleos Mexicanos (Pemex). “My time at Tidewater Marine was very rewarding, and most certainly contributed to my everyday learning. I was able to see firsthand that Brazil has an advanced ‘oil & gas’” sector, he stated. For Ricardo, job opportunities in multinationals overseas is increasing every year, mainly because Brazil is in high demand in the international market and companies want to do business and be in good terms with the country. After Tidewater Marine, he joined Oceaneering International as managing director for South America, in the robotics and New Business development segment. However, in 2004, Ricardo was invited to come work at Edison Chouest Offshore (USA), so he relocated along with his whole family to Houston, Texas, where he lives until today. I n t h e US , C h a g a s h e l d positions of great responsib i l i t y, w h i c h w a s e x c e l l e n t for his professional growth, and led to a new phase in his career – he went to work in the segment of Offshore support vessels at a shipyard for t he c o ns t r u c ti on of offshor e

vessels and Logistic Support Bases. Moreover, he worked in the company ’s development in Brazil with international Oil &

Age: 46 Are you married? Do you have children? Yes, I am married to Adriana. We have a son, Matheus (19) and a daughter, Millena (17). Do you have any hobbies? I play tennis and swim... when I have some spare time. What is your favorite style of music and your favorite song? I do not have a favorite style; I like good music, it can be rock, country, Brazilian pop, samba... What is your favorite book? The monk and the executive, good reading for executives who think they are executives. Where do you prefer to go for relaxation? My small cabin in Maricá. How do you manage work and family? Family is priority; work is secondary. Has your family adjusted to life in the USA? I thought it was temporary, but my family adjusted very quickly and are no longer thinking about going back. What are the pros and cons of living in another country? I think that the cost of living, education, security and technology are the positive points of life in the US; the only disadvantage is being away from relatives, but we can go around that by taking a short plane ride to say hello.

Gas companies in Brazil and with Petrobras. “My experience in the US was enriching both from a professional and cultural standpoint. Things are a little bit easier there; we do have some cultural differences, however Brazil, like the saying goes around here, is in, which helped me adjust”, he commented. According to Ricardo Chagas, Edison Chouest Offshore continues to growth. In Brazil, the company has Bram Offshore, Alfanave, Island Offshore, in addition to some 74 vessels in operation with many clients with offices in Rio de Janeiro, Macaé and Natal. Another group company is C-Innovation LLC, which specializes in robotics and underwater construction. It has two ROV equipped vessels and a drilling rig with two ROVs, and the Navship shipyard, located in Navegantes (SC), which produces six vessels a year. Edison also operates in offshore logistics with SP Logística (São Sebastião), BLO Bahia Logística Offshore (Salvador and Ilhéus) and in construction with C-Port Brasil (Itapemirim/ES). Regarding the company’s logistic support base in Espírito Santo, Ricardo Chagas stated that the process is in the environmental licensing phase, and phase 1 operations are slated for June 2013. In addition to being a manager at Chouest, Ricardo Chagas is president of C-Innovation LLC. Despite holding important positions, Ricardo sees himself as just another associate of the American group. “I never liked titles, I try to apply a little of what I’ve learned over 30 years of business, always trying to improve myself and add value to the areas of offshore support vessels, robotics and underwater construction and offshore support base.” T&B Petroleum # 32

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company profile

CERTIFICATION:

an oil & gas must have

In face of the investments announced by Petrobras, even considering the oil low prices and world finance crisis, the oil & gas market is getting ready for a new expansion cycle. The whole productive sector is in movement, and service and product suppliers that add price to quality will run in the driver’s seat.

Rua Conceição, 233 - Sl. 2511 Campinas/SP, Brazil CEP 13010-916 Phone +55 19 3731-6990 Alameda Rio Negro, 1030 – Cj. 1101 CEP 06454-000 Alphaville, Barueri/SP, Brazil Phone +55 11 2699-2200 e-mail sales@ncc.org.br

www.ncc.org.br

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Quality means not only functionality or service: safety is a must. Certification is paramount to keep the international level of reliability. In Brazil the certification is mandatory and regulated by the National Institute of Metrology, Quality and Technology, Inmetro, and performed by a certification body. Inmetro, as part of the Federal Government, within its numerous activities regulates, controls, and surveys products certified and sold in the Brazilian market as well accredits the certification bodies (for product, quality systems and other certifications). As an institution independent from manufacturers and consumers, the CB performs the product and services certification according well defined criteria. The laboratories, also independent and Inmetro accredited as well, are CBs partners and perform conformity verification tests according to the applicable established criteria – the standards. Within every CB there are certification’s technical commissions, assembled by voluntary members, representing manufacturer’s associations, consumers and other institutions, aiming keep a balance of interests. Such commissions evaluate and approve all local market product certification. The activities developed by those institutions, in an ethical and professional manner, is what gives credibility to the Brazilian System of Conformity Evaluation (SBAC). Specifically for the Brazilian explosive atmosphere (Ex) market, the Inmetro Regulation no. 179, in place since 2010, sets the rules. Since the 1980’s Brazil is getting in sync with the European and North America countries regarding explosive atmosphere equipment certification. After getting full laboratorial capacitation and COBEI begun to closely follow IEC, our regulation has evolved. Nowadays the Brazilian legislation is similar to the European Union one. Now, the Brazilian supplier, eying the international market, has the possibility of utilizing an international Ex certification system, the IECEx. This system has as goal to facilitate the international explosive atmosphere product and services trade, keeping the required safety level. Performing conformity evaluation and issuing test and audit reports in a standard procedure, such processes costs and time are reduced. Besides, it makes viable the acceptance of test results and audits among peers, as IECEx has a multilateral agreement character. At the present time, NCC Certifications is the only ExCB in Latin America. A certification body works basically in four areas: product certification; quality management systems; product inspection services at


Photo: Stock.xcng Image Bank

the origin and pre-shipping; and visits for follow up, the post-certification. The certification process comprehends the following phases: preliminary evaluation – documents technical analysis; product tests; manufacturing process evaluation; and approval and follow up inspections, which occurs generally once a year. Such organizations have capacity to evaluate 16 thousand plus different products from diverse industry sectors, encompassing row materials, components, equipment, building and mechanics among others; with the goal of deciding if they constitute any kind of risk to the society and/or property. Billions of certified products are annually placed in the global market, with a large concentration in the electric and electronic sectors. In the certification process, the gas & oil industry is known as explosive atmosphere (Ex) and the evaluation phases of that equipment go through several verification steps of requirements, since an electronic circuitry to its enclosure. Such verifications objective to assure the equipment cannot, even under failure condition, become a source of ignition. The currently known sources of ignition occur due to sparking between energized parts, when friction and/or impact happens, between lightalloy parts, due to high temperatures or even for electrostatic charges buildup. An example of a possible accident that may occur due to electrical sparking happens under a circumstance where there is equipment with inadequate separation distance between terminals of different polarity, producing electric arcs with enough energy to ignite an explosive atmosphere.

Among the numerous appropriate situations for an accident, we can name the explosion of compounds without an ignition source, when the temperature rising reaches the fire point and the product inflames. To assure that this risk will not occur, practically all explosive atmosphere certified products bring a label with its temperature class, and this is split in the following classes: T6, T5, T4, T3, T2 or T1. Every class is a function of the maximum temperature at the equipment surface (respectively 85°C, 100°C, 135°C, 200°C, 300°C and 450°C); or better, a not evaluated motor can ignite a T5 atmosphere if reaches temperatures above 100°C. A third setting is the one of a product with a not evaluated plastic enclosure that, during its cleaning with a dry cloth, could accumu-

late electrostatic charges in its surface and detonate an electrostatic discharge in the explosive atmosphere, causing an ignition and initiating a fire. Thus, the absolute control of activities is cornerstone considering that the risk lies in an apparently banal circumstance as cleaning a surface with a cloth. Manufacturers, consumers and government will all be winners with certifications. With the conformity evaluation assured by an independent certification body, industry acquires accelerated competitiveness and facilitated market access; the choice criteria based on quality, reliability and safety standards improve the consumer ’s buying decision and the government has a powerful tool in the regulation of sales and utilization of such products.

Wilson Bonato is Electrical Engineer (emphasis in Electronics), with a degree from the Engineering School of Lins, Lead Auditor/Irca, certified Reliability Engineer (CREA/ASQ). ABCQ instructor for CQA, CQE and CRE certification classes. Coordinator of one of the COBEI’s Study Commission for explosive atmosphere electrical equipment standards. Currently is Engineering Manager for Association NCC Certifications of Brazil.

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products and services

Castrol

Full Castrol offer for Brazil Carmen Pino, Castrol Offshore Regional Director, Americas, Middle East and Asia, says that as many as 100 locally-produced grades can now be supplied direct to customers working offshore Brazil. In addition to the historic packaging (drums and pails), most main grades are now available in DNV (Det Norske Veritas) certified 1,000l-5,000l returnable totes. To enable these deliveries, Castrol has aligned with a group of partners, including LOCON, which specialises in the storage, handling and distribution of chemical products. While, at 2.5%, Brazil’s 2011 economic growth figures were greeted with disappointment by analysts, Mr Pino says that the nation’s offshore sector continues to grow, with particular focus on the large ‘subsalt’ discoveries. Business Monitor International, for example, has predicted in its first quarter 2012 report that crude production should add nearly 2mn b/d of output by 2016 and nearly 3mn b/d by 2021. Mr Pino says that Castrol Offshore’s latest investments demonstrate how critical the company believes it is that this growing market is supplied with the high performance lubricants and subsea production control fluids that will ensure reliable operation of FPSOs, subsea equipment and drilling rigs. Current supply agreements are

68 T&B Petroleum # 32

Photo: Castrol image bank

As Brazil’s oil and gas sector continues to grow, Castrol Offshore has built on an established in-country production presence to ensure that its full range of fluids is available.

already in place with several key industry participants. To support this new operation, Castrol has recently hired two technical sales managers and several support personnel to deliver their products and services in Brazil.“Castrol’s commitment to the region has resulted in an offer consistent with its historic supply positions in other parts of the world, including North America and the North Sea,” says Mr Pino. In fact, Castrol has been operational in Brazil since the 1950s, focusing on blending capability in the automotive and industrial sectors, which has meant that the offshore team has been able to access proven manufacturing resources immediately. Phil Michaelis, who became Castrol Offshore Regional Sales Manager, Americas this time last year, says: “In addition to the existing Castrol Transaqua and gear and hydraulic oils that have been blended

in Castrol’s Rio plant for years, core engine oils are now being manufactured in Brazil. “Subsea fluid manufacturing is on site, as is the expertise to manage different packaging specific to E&P requirements. As a subsea vendor operating in subsea basins worldwide, Castrol Offshore has an in-house global supply chain, of which Brazil is now an integral part.” Power to the People – A key part of Castrol Offshore’s strategy in Brazil has been bringing in expertise familiar with the local market, with the background to develop the personal relationships so highly valued by regional customers. After the appointment of Felipe Carvalho as Castrol Offshore Sales Manager, Brazil in January 2011, the company ’s regional operation has secured the services of a number of experienced industry personnel, via both internal and external routes.


Mr Michaelis says that recent appointments include Sean Komatinsky, a certified lubrication specialist. “With four years experience as a lubricant advisor to the E&P industry adding to a nine year tenure as a US Coast Guard Officer (as a mariner and marine inspector), Sean has been influential in bringing into focus the support necessary build on experience in Brazil to date, particularly in third party quality control,” says Mr Michaelis. Meanwhile, Sam Walker, who has many years of sales experience in the lubricants and industrial chemicals sectors, is now taking care of regional account management for Castrol’s surface and subsea products. Again, Houston-based Castrol Offshore certified lubricationbased specialist Tom Reynolds is bringing his 32 years of lubricant

Land-based opening beckons Castrol has established a strong base of business in land-based drilling in the Middle East and has also offered similar services in North America to drilling majors. “We have been winning contracts consistently in this market and there is clear potential for growth, and this is an opportunity to bring new focus to this demanding sector,” says Mr Pino. There are about 8,500 land-based rigs operational worldwide and, today, around 55% of them operating in the US. Mr Pino is casting the spotlight on the sector’s potential at a time when both the North American and global

markets are set to grow. However, he also notes that tapping into Castrol’s global business will form a key part in effectively servicing this developing market. “Given the opportunities that are out there, we are in what I believe is a unique position to combine our existing engineering team and its deep understanding of onshore drilling applications with our wider sales team, our global support and response network and our developed logistics capability,” he said. “In this way, we can cultivate a niche area of our expertise and a strong global business.”

support experience across several industries to bear on subsea products for Brazil. Most recently, Mr Pino says that Rodolfo Godoy has been

appointed as Technical Sales Manager for Brazil with responsibility for contractual obligations as global assets migrate to waters offshore Brazil.

TH Hill

Quality assurance services for drilling systems Bureau Veritas announces it has signed an agreement to acquire TH Hill, a worldwide leader in oil & gas drilling failure prevention and analysis services. The transaction is expected to be completed in April, upon clearance by the relevant authorities. Founded in 1980 and headquartered in Houston, Texas, TH Hill offers quality assurance, engineeringand training services to minimize the risk of structural and mechanical failure of both onshore and offshore drilling equipment. TH Hill also develops unique standards including DS-1®, a global standard for drill string design, manufacture, operation and inspection and STC-1 for the certification of drilling specialty tools. TH Hill operates in more than 50 countries and has offices in Canada and Brazil. It hasover 250employees and reported gross revenue of approximately$47 million in 2011.

Pedro Guimaraes, Bureau Veritas’ Chief Executive Officer, The Americas, stated: “The addition of TH Hill to the Bureau Veritas organization has provided a unique opportunity to further expand our conformity assessment and quality assurance services to the oil & gas industry. TH Hill’s highly-experience and proven drilling failure prevention management team adds industry-leading expertise in drilling failure prevention and analysis to Bureau Veritas’ vast pool of professionals and technical resources. The acquisition of TH Hill, in addition to the recent addition of AcmeLabs in Canada, shows Bureau Veritas’ commitment to continually growing our value

proposition for clients through the North American and global markets. Shawn Altizer, TH Hill, Inc., Chief Executive Officer stated: “All of us at TH Hill are excited to be joining a global leader in the oil & gas conformity assessment market. Bureau Veritas provides great opportunities for TH Hill and our employees, and our clients will be thrilled about Bureau Veritas’ strong global network and broad array of technical services that we can now provide.” Following this acquisition, Bureau Veritas will have 3,300employees in the United States. T&B Petroleum # 32

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products and services

ABS Group

ABS Group announces acquisition of Genesis Solutions ABS Group of Companies, Inc. announced its acquisition of maintenance and asset management solutions provider Genesis Solutions, headquartered in Ridgefield, Connecticut. In little more than a decade, Genesis Solutions has grown to become a leading provider of integrated Enterprise Asset Management (EAM) services to major pharmaceutical, energy, food and beverage, manufacturing and facilities maintenance customers. With operations in the US, Canada, Latin America, Europe and Asia, Genesis Solutions will align with ABS Group’s global footprint and complement existing Asset Management capabilities. Genesis Solutions will be combined with ABS Consulting’s existing Reliability and Maintenance Management group to form a new EAM competency center. According to ABS Group CEO, Tony Nassif, “The acquisition of Genesis Solutions will enable ABS Consulting to immediately expand our capabilities to deliver full-service EAM solutions to our

extensive customer base in the Maritime, Oil and Gas, Nuclear, Renewable and Government market sectors.” ABS Consulting President David Walker added that, “In particular, their systems and technology experience with all of the major EAM and Computerized Maintenance Management System software tools will equip AB S Consulting with a portfolio of solutions to directly improve customers’ bottom lines through reduced downtime, improved efficiency and reduced labor and material costs.” ABS Chairman Robert D. Somerville said that, “The Genesis Solutions

acquisition represents an important step in assisting our clients to maximize the return on their capital investments and increase operating efficiency.” He added, “We are pleased that this acquisition provides ABS Consulting the capabilities to enhance the delivery of services and programs to our clients.” Genesis Solutions’ Founding Partner and CEO Burton (Twig) MacArthur said, “The combination of Genesis Solutions and ABS Consulting will increase our ability to help clients realize a return on their assets through reduced maintenance costs and improved productivity.” He stated that, “This integration will help us reach a broader base of customers with a broader set of offerings, while also expanding the range of career opportunities available to Genesis employees.”

Schlumberger

Schlumberger announces agreement to acquire SPT Group Schlumberger announced in March that it has entered into an agreement with Altor Fund II to acquire SPT Group—a privately owned software company specialized in dynamic modeling for the oil and gas industry. The company provides a combination of software and consulting services for multiphase flow and reservoir engineering applications. Closing is subject to customary regulatory approvals. “The dynamic modeling and reservoir optimization software of SPT Group will complement the existing Schlumberger production software portfolio,” said Tony Bowman, President, Schlumberger Information Solutions (SIS). “In combination with the Petrel* E&P software platform and other SIS technologies, this will enable customers to further optimize production from reservoir performance to processing facilities.”

70 T&B Petroleum # 32

“This is a great testament to our employees and a remarkable opportunity for the company,” commented Tom Even Mortensen, Chief Executive Officer of SPT Group. He continued, “Combining the skills, abilities, presence and technologies of the two companies will further increase the scale of our activities and enable continued delivery of products and services with the quality and pace the market demands.” SPT Group Chairman and Altor Partner Reynir Indahl added, “We are proud to have developed a very successful company together with SPT Group management, and believe that

Schlumberger will be a great home for SPT and its employees.” SPT Group, founded in 1971, is headquartered in Norway and employs approximately 280 people in 11 countries worldwide. The company is a leader in dynamic modeling of multiphase flow and reservoir optimization through renowned software products and a global team of professional consultants. SPT Group has invested more than most comparable firms in developing cutting-edge technology. The company’s employees, global presence, close ties to industry research environments, and clear focus on customer needs have been important factors in its success.


MacArtney

Company fusion in North America creates MacArtney Inc.

Macartney Inc. has assumed responsibility for SubConn® sales in North America and augmented the sales organisation with additional products and expanded stocks. “The fusion allows us to connect the leading brand of underwater connectors to our broad range of trusted engineering services, terminations, slip rings, moulding, multiplexers and subsea systems and products providing our customers with full project solutions,” says MacArtney Inc. President, Lars Hansen, who brings more than 20 years experience with the MacArtney Group in Denmark and many years experience leading MacArtney Offshore in Houston. M.J. Stewart Associates has been the sales organisation for SubConn® wet mateable connectors in the US for over 15 years and MacArtney Group responsible for SubConn® sales for the rest of the world. The MacArtney Offshore office and workshop in Houston has been

Photo: MacArtney image bank

MacArtney Underwater Technology Group, a world leader in underwater services and support, has announced that it has expanded its North American operations. MacArtney Offshore and M.J. Stewart Associates have joined forces as MacArtney Inc.

offering a wide range of underwater technology systems and services since 1995. Now combined as MacArtney Inc., the offices and workshops in Boston and Houston provide an increased sales base in the US, giving customers larger stocks and capacity for even better service and faster delivery. Local support and global knowledge – “With the reorganised branch of MacArtney we provide strong local support and direct access to global knowledge, advice and services for all underwater technology needs - from single connec-

tors to complete launch and recovery and equipment systems”, explains Lars F. Hansen. “The Boston and Houston offices are the first step in our plans to provide better local access to global expertise from a network of offices and workshops in the US.” The MacArtney Group has more than 225 employees worldwide specialising in design, manufacture, sales and services of a wide range of systems to offshore operators, surveyors, the renewable energy sector, ocean sciences, security forces and navies across the world since 1978.

Ausenco

Ausenco acquires North American oil sands specialist Ausenco Limited announced in January it had acquired 100% of Reaction Consulting Inc., a Canadian-based specialist provider of engineering services in the SAGD bitumen and oil sands sectors. Ausenco CEO Zimi Meka said the acquisition would enhance Ausenco’s energy portfolio expertise

and provide an immediate strategic local Calgary presence pivotal to North America’s growing oil sands market. “We are committed to growing the Energy busi-

ness significantly and we anticipate 2012 revenues of between $5 and $7 million from this acquisition. The $3.8 million purchase price will be funded from Ausenco’s existing cash reserves.” Mr Meka said the Reaction team would be integrated into Ausenco’s Energy business line immediately.

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products and services

Cargotec

MacGregor bulk handling systems are to be installed on four OSV

At the end of November, Grandweld Shipyards in the United Arab Emirates ordered MacGregor bulk handling systems for two anchor-handling tug/supply (AHTS) vessels, hull Nos 389 and 390. They will handle cement, barite and bentonite for their owner Halul Offshore Services Company, in Doha, Qatar. Equipment for both vessels is scheduled for delivery at the end of June 2012. In December Cargotec received an order for MacGregor bulk handling systems to be installed on two PSVs (hull Nos 446 and 447) under construction at Astilleros Balenciaga S.A. in Spain, for North Star Shipping in Scotland, UK. The vessels will operate in the North Sea and will handle cement, barite and bentonite. The equipment is scheduled for delivery in June and November, 2012. “For the owners, it was important that the vessels were fitted with simple and well proven bulk handling technology, with a solid track record,” says Pankaj Thakker, Cargotec Sales Manager, Marine Selfunloaders. “Each installation will feature dust-free operation and low power consumption, making these some of the most environmentally-friendly systems available today.” 72 T&B Petroleum # 32

Photo: Cargotec image bank

In the last quarter of 2011 Cargotec secured contracts for MacGregor bulk handling systems for installation onboard four offshore support vessels (OSV) newbuildings belonging to two different owners; one in the UAE (two vessels) and the other in Spain (two vessels).

New command Pasi Lehtonen has been appointed as Senior Vice President of Cargotec’s Offshore business segment, effective from the beginning of January. Mr Lehtonen has worked with Cargotec since 1995, his most recent position being Senior Vice President of Finance for Cargotec’s Marine business. He will continue as a member of Marine’s management group. In an earlier announcement, Cargotec confirmed the appointment of Tom Svennevig as Vice President for its Offshore segment’s advanced load-handling business, and Ilpo Heikkilä as Vice President for its Offshore segment’s winch business. “Our competence centres for advanced load-handling in Kristiansand, Norway,

and for winches in Singapore, offer their services for our global customers,” says Olli Isotalo, Executive Vice President, Marine. “Pasi Lehtonen will bring vast general management experience, which will help speed up our growth in the offshore industry.” Cargotec offers MacGregor load-handling solutions to the offshore industry. The range includes marine, offshore and subsea cranes with active heavecompensation, fibre rope handling systems for ultra deepwater load handling, launch and recovery systems for ROVs/Ts, module handling systems, sophisticated rescue and deck-handling equipment, and advanced winches for anchor handling and towing and mooring operati.


Emerson

Roxar RMS 2012 Reservoir Modelling Solution

The launch sees the continued expansion of Roxar RMS into the geophysics domain through a completely integrated reservoir modeling workflow which includes seismic interpretation, reservoir simulation, reservoir behaviour predictions, and uncertainty management. “With average global oil & gas recovery rates at just 22%, the smallest percentage improvements can have a huge impact on both future oil & gas production and the bottom line”, said Kjetil Fagervik, managing director of Emerson’s Roxar Software Solutions. “Accurate predictive reservoir models that can realistically rep-

resent the underlying seismic data and that can offer a seamless route from seismic to simulation are absolutely central to efforts to improve oil & gas recovery today. These are the underlying goals behind Roxar RMS 2012.” The key new features of RMS 2012 include seismic inversion, seismic attributes, and field planning. Key features of RMS Field Planning include increased flexibility in importing and exporting multiple targets in Comma Separated Values (CSV) format files; a Target Generator which enables modellers to create multiple copies of a target input with horizontal or vertical distance;

Photo: Emerson image bank

Emerson Process Management has released Roxar RMS 2012, the latest version of its reservoir modeling software.

the automatic generation of planned trajectories through a new Well Assignment Table; and three new data objects which can be visualised or interactively edited in 2D or 3D. Emerson’s flagship reservoir modelling solution, Roxar RMS comprises 24 fully integrated software modules, including mapping, reservoir modelling, well planning, reservoir simulation and uncertainty modelling tools. RMS 2012 operates on Linux 64-bit, Windows XP and the Vista 32 and 64-bit platforms, as well as Windows 7 64-bit.

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Unconventionals

Deepwater Exploration

Mature Fields

Gas

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For more information on participating opportunities, please contact Gustavo Aranda Tel: +44 20 7978 0081 Email: garanda@thecwcgroup.com T&B Petroleum # 32

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73

m


products and services

ABS

ABS expands services in Singapore

Recognizing the growing role Singapore is playing as a global offshore energy center, ABS is moving key offshore leadership positions from Houston to Singapore and is strengthening its research and development (R&D) capabilities at the ABS Singapore Offshore Technology Center (SOTC). Growth in the deepwater sector will continue to be driven by advances in technology, and Singapore will be at the center of these advancements in the Asia-Pacific region as the country positions itself as a regional deepwater hub. The level of investment expected in the Asia-Pacific region (US $225 billion in capex through 2015*) will bring rapid growth in the deepwater arena that will require mature technical competence. “ABS has had a strong presence in Singapore for decades,” says ABS President and CEO Christopher J. Wiernicki. “Our expanded offerings in Singapore reflect the country’s growing role as a center for deepwater research.” ABS is undertaking a threepronged approach to expansion, relocating key offshore leadership positions, including its Chief Engineer for Offshore to the Singapore office, adding a Virtual Model Basin to its technical offerings at SOTC and expanding its relationships with local universities to support ABS Rule development and technology programs. ABS has had a dedicated team of offshore engineers and survey-

74 T&B Petroleum # 32

Photo: ABS image bank

ABS, the leading provider of classification services to the global offshore industry, announced the expansion of its presence in Singapore.

ors based in Singapore for more than two decades. The number of offshore professionals, which currently stands at 70, is anticipated to increase with the demand for ABS services. To strengthen ABS’ technical interface with clients and other key stakeholders in the region, industry veteran Joseph Rousseau will assume the position of Chief Engineer for Offshore and will be based in the Singapore office. “Even with all of our electronic communications, there is nothing more important than face-to-face dialog,” Wiernicki says. “Having our chief engineer for offshore on the ground in Singapore will allow us to continue to deliver the solution-driven service our clients expect and deserve.” The second component of the ABS expansion plan for Singapore is the creation of the ABS Virtual Model Basin at SOTC. With the introduction of this capability, ABS has formalized a selection of services to support

the offshore industry as it pushes into deeper water. New capabilities offered at SOTC will allow a broad range of advanced analysis that complements testing carried out in towing tanks and conventional model basins. “Adding to the capabilities at SOTC allows ABS to deliver more value in a country that is essential to regional development,” Wiernicki says. “A key strength of ABS has always been to effectively use technical innovations in providing the industry with practical and efficient solutions to their challenges – and this is the fundamental purpose of these capabilities.” Through the third component of the expansion, ABS plans to strengthen ties with local universities to enhance regional R&D initiatives and strengthen Rule development programs. To achieve this goal, ABS will be building on the relationships and programs underway at SOTC.


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products and services

Fores Engineering

Chemical injection systems for P-58 and P-62

Fores Engineering is a leading italian company specialized in engineering, construction, integration and supply of systems for oil & gas industry, both offshore and onshore, such as: wellhead control systems, oil & gas metering systems, chemical injection systems, fuel gas & diesel oil systems, control & safety systems, telecomunication systems and prefabricated control rooms. Thanks to the long experience of its skilled personnel, the deep knowledge of the technical requirement and the ability to work in international teams, Fores has acquired strong credibility over the years, thus becoming one of the main suppliers of several oil companies, such as Petrobras, and EPC Contracting Companies all over the world. The scope of supply, subject of both purchase orders, will be executed following the general specifications and technical standards requested by Petrobras and includes the engineering and supply of 32 tanks in stainless steel AISI 316L completed with level indicators and transmitters, 76 pumps double diaphragm type according to API675 code with flow rate from 1 lt/hour to 5.000 lt/hour and discharge pressure up to 225 barg, calibration 76 T&B Petroleum # 32

Photo: FPSO P-62, Claudio Fachel

At the end of a tender process during the last months, Quip, through the CQG Oil & Gas Contractor Inc. and CCI Oil & Gas Contractor Inc. companies (Queiroz Galvao, Camargo Correa and Iesa) awarded to Fores Engineering the purchase orders for the supply of chemical injection systems addressed to the FPSO P-58 and P-62.

pots, pulsation dumpers, valves, flow transmitters, pressure control valves and all the accessories necessary to achieve the requested performances. The systems will be able to inject chemical such as: hydrate inhibitor, anti corrosion, demusifier, oxigen scavanger, asphaltane inhibitor, h2s scavanger, biocide, xilene, inverted emuslion inhibitor, oil scale inhibitor and defoamer necessary for the production of the FPSOs. Fores will supply even the technical assistance for the pre-commissioning, commissioning, start-up activities on-shore and off-shore and the operator training. The supply will be completed, with the collaboration of Termopump which is Fores Engineering’s representative for Brazil, in 42 weeks only, thanks to Fores’s great experience in

chemical injection applications installed off-shore and specifically addressed to FPSO similar to the ones already supplied to Technip for the Akpo FPSO (offshore Nigeria) and to Saipem for Aquila FPSO (offshore Italy). The awarding of these projects allows Fores to show his potentiality in the co-operation with his Client, his operating skills, his technical ability synergistic with the brazilian EPC contractors and the stete-of-theart technology in the chemical injection systems. the Brazilian area represents for Fores an extremely important step for his International development and for his strengthening in the offshore leadership. Fores Engineering celebrates a 20 years of activity in 2012 and is fully owned by Rosetti Group, an italian EPC Contractor working in the offshore (platforms, plants and modules), on-shore (process plants and equipments) and shipbuilding (supply vessel, harbur & ocean tugs, anchor handling vessel) with a consolidated turnover around 400 million dollars. Platforms manufactured by Rosetti Group are installed in the Mediterranean Sea, Atlantic Ocean (West Africa), North Sea and Caspian Sea Area.


GE Energy

GE Energy launches new power conversion GE’s recently acquired Converteam buiness is renamed Power Conversion, which is at the heart of a global industrial trend to replace ageing and inefficient industrial motors with advanced electrical systems power conversion - in order to play a larger role in the applicatrion of power electronics and industrial automation processes for the natural gas, renewables, mining and metals industries. GE Energy (NYSE: GE), a world-leading supplier of power generation and energy delivery technologies, today announced the next step in the integration of its acquisition of Converteam by renaming the business Power Conversion. Power Conversion’s technologies in process controls, automation systems and highefficiency power electronics, motors and generators will enable the company to better meet the needs of customers looking to improve operational efficiency and productivity. The Power Conversion business will help GE maximize its deep domain expertise and expand its presence in the fast-growing energy efficiency, electrification and automation sector, which was valued at $30 billion and is growing above global GDP. “Today’s announcement is a significant milestone on our journey to deliver our customers more value. We are combining our technology and consultative offerings in systems integration to help the world’s fastest growing energy and industrial sectors improve the efficiency and profitability of their operations,” said Power Conversion CEO Joe Mastrangelo. “Our strengths in these sectors will

allow GE to lead by managing the entire energy lifecycle, where our customers want us to play a bigger role.” Large industrial companies are replacing mechanical processes with high-efficiency, customized electric alternatives that deliver better reliability, require less maintenance and create lower emissions in industrial processes. This mega-trend is called electrification, which is expected to double over the next 20 years. One of the trend’s leading drivers is the oil and gas industry, which is using electrical systems to extract and transport natural gas more efficiently. Approximately 25 percent of electricity produced globally is used to power electric motors in a wide range of industrial applications. Power Conversion’s solutions could help improve their energy efficiency by 30 percent,

helping to reduce electricity consumption, energy intensity and greenhouse gas emissions. Power Conversion, with GE’s Industrial Solutions business also will address all steps in the energy conversion chain with a robust portfolio built around rotating machines, power electronics, wind converters, solar inverters and process control technologies. “Power Conversion’s engineering expertise, systems focus and market customization make it a differentiator in today’s market because GE can scale its businesses and deliver new solutions to market faster than current competitors,” added Mastrangelo. The fastest growth in the industrial automation sector is expected to be in Brazil, Russia, India and China and the Middle East. The expansion will be driven by a demand in energy efficiency and integrated electrical and mechanical solutions critical to customers who are competing in highly competitive industries. Power Conversion and GE’s M&A Strategy – GE Energy acquired Power Conversion, then known as Converteam, in September 2011. The $3.2 billion deal is the latest in approximately $11 billion of acquisitions that have expanded GE Energy’s portfolio beyond the power generation sector into critical industries that rely on cleaner, smarter, more efficient energy.

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concession contracts

Local Content

and the current trends in the Oil & Gas sector

The beginning of the exploration, development and production in the areas located on the so-called Pre-Salt polygon poses a new challenge for the suppliers of the domestic oil & gas industry. The blocks located in ultra-deep waters demand a high level of technology and technical qualification from the companies which are a part of the goods and services sector in Brazil.

Paulo Valois Pires studied at the Université Robert Schuman, Strasbourg, FR, (Certificat des Hautes Études Européennes 1992) and has a Master Degree in International Law by the University of São Paulo (1999). Pires is a founding partner of the Schmidt, Valois, Miranda, Ferreira & Agel Laws. Danielle de Aquino Ludwig Pereira is a graduate of Universidade do Estado do Rio de Janeiro – UERJ and has a specialization in Oil and Gas business and regulation from the Fundação Getúlio Vargas. She is a parther of the Schmidt, Valois, Miranda, Ferreira & Agel Laws.

78 T&B Petroleum # 32

W

ithin this scenario, the debate concerning local content, which constitutes the sum of goods and services produced in the country and acquired by the concessionaires within the scope of the Concession Contracts (“Local Content”), regains strength. The Local Content percentage is defined in each Brazil Round’s respective Tender Protocol and represents one of the determining factors for the concession of the blocks by the National Oil, Natural Gas and Biofuels Agency (“ANP”). An important change to the Brazil Rounds was the introduction of the “Local Content Brochure”, prepared by the National Oil and Gas Industry Mobilization Program (Prominp – Programa de Mobilização da Indústria Nacional de Petróleo e Gás Natural), which serves as a tool to measure the percentages established in the Concession Contracts. To fulfill the Local Content percentages established by ANP rules and, at the same time, comply with the new demands of the oil & gas sector, the market is experiencing an increase of M&A’s involving the goods and services sector, boosting the national economic scenario. By structuring joint ventures and acquiring Brazilian companies, international suppliers are able to fulfill the Local Content requirements and, furthermore, they encourage investments and the introduction of new techniques in Brazil. The oil & gas goods and services market is pulverized and the majority of the companies that act in this sector are small and they are usually family-owned businesses. Therefore, the acquisition of corporate interest of Brazilian companies must be preceded by a thorough due diligence process, that reviews all of the tax, regulatory, labor, corporate, real estate and environmental aspects, not only to find the best structure for the operation but also to mitigate any possible issues which may arise due to the cultural differences between foreign and Brazilian suppliers. The due diligence process becomes even more complex depending on the activities performed by the target company, which shall comply with specific laws and regulations applicable to its respective areas of practice. There are several features to be taken into consideration before proceeding with the acquisition of the target company. Below are listed certain important issues to be evaluated in connection with the oil & gas goods and services market. Under Brazilian tax laws, the rendering of services in Brazil by a domestic company is subject to local Services Tax (“Imposto sobre Serviços de Qualquer Natureza - ISS”), which shall be established by the municipal authorities at a maximum rate of 5% on the price of the service. The sale of goods, however, is subject to taxation by the state tax authorities by means of the State VAT Tax on Transactions Related to the Circulation of Goods, Interstate and Intermunicipal Transportation Services, and on Communications Services (“Imposto sobre Circulação


Photo: T&B Petroleum Image Bank

de Mercadorias e Prestação de Serviços – ICMS”). The tax rate usually corresponds to 18%, but it may vary according to the state where the transaction takes place. The domestic sale of goods by a manufacturing company is also subject to Excise Tax (“Imposto sobre Produtos Industrializados – IPI”), which is a Federal tax. The tax rate varies according to the tax classification code of the good. In view of the above, it is extremely important to verify whether or not the target company has complied with all tax obligations imposed to its activities, as well as if ancillary tax obligations have also been duly complied with, such as book keeping, tax declarations and issuance of electronic invoices. According to the Local Content Brochure, the value of goods, to be computed in the calculation of Local Content, does not include VAT taxes, due on their acquisition. Additionally, even though the vast majority of the suppliers establish their headquarters in Rio de Janeiro or São Paulo, the natural tendency, as the business evolves, is to establish operational terminals in Macaé, the upstream operations hub. Therefore, a detailed evaluation of the property before the acquisition is vital. It is also important to perform an investigation on the title of the property, by means of the analysis of the certificates issued by the competent Real Estate Registry Office, as well as to confirm with the municipal authorities that all property taxes are duly paid. Furthermore, it should be confirmed whether or not all the facilities incorporated into the property have been duly registered with the Real State Registry Office. Another important issue is to verify whether or not the goods supplier or services provider is duly registered within Petrobras Corporate Registration, which is a database of goods suppliers

and service providers qualified to participate in Petrobras bids, as well as whether such registration is valid, as it must be renewed periodically. For purposes of getting registered and renewing such registration, companies need to submit several documents in order to comply with Petrobras’ legal, financial, managerial, HSE and technical criteria. This procedure is quite complex and time consuming. Therefore, by acquiring a company that already holds a valid Certification of Registration with Petrobras, the purchasing company will save time and be able to participate in Petrobras bids. However, this does not constitute a guarantee whatsoever that the company will execute an agreement with Petrobras, which will depend on the result of the bid. Moreover it should be noted that, in order to be able to import/ export goods, the company shall be duly registered with the Foreign Trade Integrated System (Siscomex – Sistema Integrado de Comércio Exterior), which is related to the Internal Revenue Service. Once the company is duly able to import/export goods, it should, depending on its activities, be in a position to apply for the Repetro regime. Repetro is the special customs regime for the export and import of goods used in the exploration and production of oil and gas. Its main purpose is to reduce the burden of federal taxes in the supply of such goods. Beneficia-

ries will have the exemption of Import Tax (“II”), IPI, Contributions for the Social Integration Program (“PIS”), Contributions for Social Security Financing (“Cofins”), as well as exemption or reduction of the calculation basis of the ICMS payable on the import of the equipment. Considering the complexity of the market, in order to mitigate potential problems, companies will need legal advice from specialized firms, so as to ensure not only that they comply with the Local Content Rules of each Round, but also that they are doing the best option by structuring joint ventures and acquiring Brazilian companies. Additionally companies will need assistance in order to perform a detailed due diligence of Brazilian companies to make sure that the company they acquire complies with applicable laws and regulations. Finally, with the advent of the Pre-Salt Layer, large investments are being expected in the Brazilian oil & gas sector. The current family-owned businesses structure could make it very hard for the Brazilian local suppliers to meet the increased demand. Therefore, we foresee that the oil & gas goods and services market will go through a significant transformation in the upcoming years, resulting in a process of opening capital as a way to gain resources in order to meet the demands of the activities in the Pre-Salt areas.

T&B Petroleum # 32

79


self-lubricating

Self-lubricating sliding bearings

Standard metallic solutions are complemented by High Tec composite material

S

elf-lubricating, maintenance-free bearings are considered a standard in offshore equipment for over five decades. Particular applications like Turret, Mooring and Jack-up systems, but also Pipe-Laying, tube handling, drilling, cranes and subsea equipment, represent a broad spectrum for the use of these materials. Reasons for the versatile use in the offshore sector are primarily the tremendous demands for safety and reliability. Self-lubricating bearings are used whenever conventional solutions such as greased bronze are not practical, can´t be realized for technical reasons or their function cannot be guaranteed. The focus will primarily be on applications with very high loads but low sliding speeds. The tribologic process within self-lubricating sliding materials, whether metallic or non-metallic is basically the same: Micro-movement generates the so-called micro-wear on the sliding surface where the embedded solid lubricant is released. This solid lubricant (which may be graphite, PTFE or certain sulfides) is transferred to the mating material (shafts with rotational or oscillating motions; plates with translational movements) where it forms a stable lubricating film between bearing and shaft and safeguards the function of a bearing system even at high loads.

Traditional solution

Hubert Hilp is Application Manager Offshore & Marine Federal Mogul DEVA GmbH Collaboration Wanderley Egídio, manager of the South American Federal Mogul DEVA GmbH, and Jorge Amaral, Petrobras engineer equipment (UN-Rio).

80 T&B Petroleum # 32

In recent years, users were relying almost exclusively on high-strength, corrosion-resistant aluminum-bronze in such cases, with self-lubricating properties generated by the insertion of solid lubricant plugs (usually compressed graphite). Those materials, like deva.glide® consist of highly wear-resistant copper cast alloys with sliding surfaces comprising uniformly distributed solid lubricant plugs according to the so-called “macro distribution“ principle. The arrangement of these plugs is depending on the movement direction. The general suitability of such solutions has recently been re-confirmed in an article of Edison s.p.a., Italy which was published on the occasion of the ONC in 2009 in Ravenna. In this paper Mr. Angelo Zuffetti, responsible project manager, extensively describes a project course in the Vega oil field in the Channel of Sicily (Italy). Until mid 2008, Edison s.p.a. operated their vessel “FSO-Vega,” which was continuously anchored for 23 years through a single point mooring system (designed by SBM Monaco). During the years 2008/2009 the “single hull” design vessel had to be replaced by FSO Leonis (double hull) according to the European Environmental Marine Regulations. During the necessary adjustment work on the existing mooring system also the large radial spherical bearings (design deva.glide ID 1200 mm) by Federal Mogul DEVA were overhauled and then brought back into use with FSO Leonis for another 15 years. This corresponds to a total operational life of 38 years!


Photo: Deva image bank

This proven bearing concept will be intensively used as well in the future with the main focus on large spherical bearings and cylindrical bearings with inner diameters of 500 mm to 3500 mm. From a technical point of view, however, it is most crucial to ensure that there is sufficient movement in this kind of bearing system over the entire life in order to achieve an “overlap” between the lubricant depots. Only this way a uniform lubricant film can be continuously built up on the mating material. Therefore it is technically no longer appropriate to use this system for applications with primarily small angular or micro-movements like in fair leads and fair lead chain stoppers.

Contemporary Solutions Improved alternatives to the “bronze with plugs” within the family of metallic materials are for instance deva.metal ® and deva.bm ®. Both materials produced by a specific sinter technology are essentially different as the solid lubricant is uniformly dispersed in the metallic matrix and their lubricant type & quantity can be customized for specific applications. Important selection criteria’s are typically the specific load, the sliding speed, size & number of movements, and of course for offshore, corrosion resistance due to the environmental conditions. Main advantage of these two modern systems over the traditional solution “ with plugs” is that always even during micro-movements - a sufficient amount of lubricant is supplied and the self-lubricating function is safeguarded, since solid lubricant are homogenously embedded in the sliding layers. Additionally, deva. bm ® as thin-walled design offers its user advantages when space is limited or a maximum allowable wear of ≤ 1.5 mm can´t be exceeded. Examples are universal joints, crane application, swivel stacks,

FSO Leonis moored at SPM System = 4 items

Cast bronze with graphite plugs Image 1 (deva glide +micrograph= 2 items)

Sinterbronze with fine distributed solid lubricant

Image 3 (deva.metal + micrograph) A family of self lubricating sliding materials each containing dry solid lubricants. The particular alloy will be adapted in accordance to the individual operating conditions.

offloading systems and smaller spherical bearings (≤ 300 mm) in general.

Advanced options by High Tec composite materials Meanwhile, however, not only metallic bearing materials are used in the offshore area. Moreover heavy-duty, durable polymeric composite systems play an important role in the decisive process towards a suitable bearing material these days. Their suitability also for applications involving sustained high loads, low sliding speeds in comparison with metal solutions is supplemented, where other properties are required. Significant increased demands in a very low wear rate, in a high corrosion resistance (especially seawater), in a low weight and, above all, in a most consistent coefficient T&B Petroleum # 32

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self-lubricating

Comparison between the main options for offshore applications Property

Unit

Brass + plugs

Sintered bronze with solid lubricant

Bi-metallic

Composite

300 0,4 1,5 180 / 300* 0,2-0,8 0,10-0,13* 0,08-0,12* low good good not not

260 0,4 1,4 180 / 45* 0,2-0,8 0,10-0,22* 0,09-0,20* low* good reasonable not yes

280 1 1,0-2,0* 180 0,2-0,8 0,05-0,18* 0,08-0,12* low** reasonable reasonable not yes

230 0,2 1,5 180 0,4-1,0 0,03-0,12 0,04-0,13 not excellent excellent not yes

Maximum specific load Mpa Maximum permissible speed m/s pU factor most Mpa x m/s Minimum hardness axis HB / HRC Roughness axis Ra (um) Dry Coefficient of friction*** Wet Galvanic corrosion Misalignment Resistance Mechanical shock Swelling by water absorption Suitable for micro-movements

* depends on alloy

Image 6 (Table): material comparison

Running-in film Bronze layer with graphite Steel backing

Image 4 (deva-bm + micrograph) A thin-walled bi-metal material comprising a steel backing (seewater resistant) with a sliding layer of deva.metal®. The latter is either graphite or PTFE.

Backing layer Wound glass-fiber embeddded in epoxy resin matrix Sliding layer Wound fibers with solid lubricants embedded in epoxy

Image 5 (deva.tex +micrograph) deva.tex® is a self-lubricating, glass-fibre reinforced composite bearing material which is produced using a special filament winding technology. The base material guarantees high strength, while the sliding layer contains special non-abrasive fibres and solid lubricants ensuring excellent tribological properties even in damp environment or in the event of edge loads. The solid lubricants were developed for underwater application to ensure extremely low friction coefficients and wear rates.

of friction at low levels have caused a shift of mind set in offshore applications. The keyword here is “Subsea”. Therefore alternative solutions based on “High-Tec polymers” are gaining increasing importance and approaching areas where metallic materials were used successfully for decades. deva.tex ® 552 as an example has been developed specifically for under water applications. Current examples for that kind of new approach in the offshore/subsea market are various riser applications like tensioning systems, hang-offs and connectors or sliding plates for turret systems, stab connectors for ROV´s just to mention a few. 82 T&B Petroleum # 32

** steel resistant to sea water

*** depends on the operating conditions

The currently most severe changes can be found in Fairleads / Fairlead-chainstopper. Valid for decades, solutions with plugged bronze are increasingly replaced by high-tec composites. Those kinds of applications shall be designed by today´s expectations for 20-25 years lifetime, therefore demanding essentially low friction values and wear rates. However, demands for safety and reliability are also valid for fiber-wound material, so form stability nondelamination & non-swelling properties are “a must” for a filament material! The simplified table below will show the main technical properties of the 4 choices and their general advantages / disadvantages as a first guideline. Many of the above mentioned material properties are dependent on the specific operating conditions. The coefficients of friction, for example, can vary significantly depending on load in some cases. Also, when designing “dry sliding bearing” solutions, criteria such as dissipation of frictional heat, corrosion, abrasive & shock loading and edge pressure play a crucial role in determining the most suitable bearing material. This is why only general information can be given in this report.

Conclusion: The completion of proven metallic bearing concepts with new, modern plastic composite systems allows the engineer to develop a technically more customized solution for any given task. This becomes increasingly important in order to meet environmental and economic requirements – provided of course that users / customers are reviewing traditional approaches accordingly and make themselves intensively familiar with the pros & cons of both material groups. Therefore, it is always recommendable to get in touch with the according vendors early enough to enquire for their technical support.


meeting

May

12 to 14 - Saudi Arabia 2012 Index Local: Jeddah Phone: +971 (0)4 438 0355 JaafarShubber@dmgevents.com www.dmgevents.com

22 to 25 - Brazil Subsea Forum Rio 2012 Local: Rio de Janeiro, RJ Phone: (+55 21) 2112-9000 eventos@ibp.org.br www.ibp.com.br

15 - Brazil Business Design Local: S達o Paulo, SP Phone: 11 3132-7250 inovacaohbr@infinityce.com.br www.hbrinovacao.com.br

21 to 24 - England 4th African - Gas LNG Local: Londres Phone: + 44.77.39.45.77.69 duncan@glopac-partners.com www.petro21.com

21 to 24 - Malasia Pipeline Pigging & Integrity Management Local: Kuala Lumpur Phone: +1 (713) 521-5929 info@clarion.org www.clarion.org

June

12 to 14 - Canada Global Petroleum Show & Conference Local: Calgary, Alberta ashifmerani@dmgevents.com www.dmgevents.com

24 to 26 - Canada Oil Sands - Heavy Oil Technologies Local: Calgary, Alberta Phone: +1 713 963 6242 bobt@pennwell.com www.pennwell.com

24 to 26 - Saudi Arabia The 4Th Saudi Arabia International Oil & Gas Exhibition Local: Saudi Arabia exhibition@saoge.org www.saoge.org

October

08 to 11 - England Gastech Conference & Exhibition Local: Londres Phone: +44 (0) 203 180 6550 johnbates@dmgevents.com www.gastech.co.uk

November 27 to 29 - USA Latin America Oil & Gas Local: Miami, Florida Phone: +44 20 79780336 kwetselaar@thecwcgroup.com www.cwclatamoilandgas.com

September

17 to 20 - Brazil Rio Oil & Gas 2012 Local: Rio de Janeiro Phone: (+55 21) 2112-9000 eventos@ibp.org.br www.ibp.com.br

24 to 28 - Canada IPC 2012 - International Pipeline Conference Local: Calgary, Alberta Phone: (403) 228-6374 laandmrb@shaw.ca www.shaw.ca

06 to 08 - USA Deepwater Operations Local: Galveston, TX Phone:+1 713 963 6256 sneighbors@pennwell.com www.pennwell.com

14 to 16 - China CIPTC 2012 Local: Pequim allen.wang@bmc-china.cn www.ciotc-top.com

27 to 29 - Australia Deep Offshore Technology Local: Perth, Australia Nicole Faeth Phone: +1 918 832 9347 annicolef@pennwell.com

Send your release to: tnpetroleo@tnpetroleo.com.br

T&B Petroleum # 32

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coffee break

Corallo chair Red chair Harumaki chair

Art of Campana Brothers

t

Humberto Campana Fernando Campana

84 T&B Petroleum # 32

on display in two major events in Rio by Orlando Santos

The Campana Brothers (Fernando and Humberto) have arrived and their artwork is on display at two separate locations. Their most complete collection, containing more than 200 pieces, covering the period of 1989-2009, is on display at “Centro Cultural Banco do Brasil” (Bank of Brazil Cultural Center), in downtown Rio. Until February 2010, their work had been on display at Vitra Design Museum, one of Germany’s most important museums, and later toured other European museums before coming to Rio. In Brazil, the exposition has been shown at Museu Vale, in Espírito Santo, at the CCBB in Brasília and São Paulo, where it was awarded one of the year’s best Visual ArtsDesign of 2011 by the São Paulo Association of Art Critics. Mathias Schwarz-Clauss, who is also the curator of Germany’s Vitra Design Museum, is the curator of the exposition titled “Anticorpos” (Antibodies) at the CCBB in Rio.


The second event of the Campana Brothers is the exposition “Arte de Sentar com arte”, (The Art of Sitting in Style”), which is open to the public at the Galeria Luciana Caravello Arte Contemporânea, in Ipanema. The exposition includes 11 chairs made by the brothers, among them the Rocinha inspired “Favela” (Ghetto), made in 1991. The exposition in Ipanema has attracted many visitors because of the originality and conception of the chairs, all are limited edition, made one at a time. “Anticorpos” focuses on the Brothers’ artwork, which consists of plastic arts, furniture pieces and jewelry, and explains their strategies, sources of inspiration and the different design approaches they use. While Humberto creates his objects as an artisan and selftaught artist, Fernando participates as an experienced architect.

Together, they ignore all traditional design conventions, play with the idea of functionality and compose their poetic objects from contradictory realities. Considered as the central figures of international design, the Campana Brothers have a visual language based on Brazil, with an extraordinary contrast of colors, forms and materials. Using intertwined or interweaved threads, cotton, plastic, copper, colorful patches and patterns in exuberant forms, the Brothers transform a chair into artwork. They understand that design is a cultural appropriation of influences, and the success of their creations transcends the boundaries between art and design, creating esthetic icons with unique, limited edition pieces. The retrospective presents most of the Campana Brothers’ work,

including private, institutional and the Campana Studio collections. It also has work of the designers created especially for “Anticorpos”, developed in cooperation with Vitra Design Museum. Among them, a number of experimentations in paper mache and a series of paper collages, which introduces each theme of the exhibition, in the order in which they were grouped. In parallel, numerous curious objects that the Campana Brothers have collected for a long time, sheds light into their personal world. A Movie showing images of the “Metamorphoses” ballet, which they designed, completes the exhibition. The ballet, inspired on the mythological texts of Ovidius and choreographed by Fréderic Flamand, was filmed during a presentation at the Théâtre National de Chaillot in Paris, in 2008.

Relief Favela chair Banquet armchair

T&B Petroleum # 32

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coffee break

The Campana Brothers Internationally known as the Campana Brothers, Humberto (1953) and Fernando (1961) were born in Brotas, in the countryside of São Paulo. Humberto got a Law degree and, with diploma on hand, started officially researching what he was most interested in since a kid: the infinite possibilities of handicrafts. During the 1980s, he set up a small studio of handicrafts. Fernando, who was an architect, was interested in investigating alternative methods for the materialization of design. He studied the power of communication and the synthesis of the outlines of Le Corbusier and Oscar Niemeyer as well as the small-scale construction of objects. After graduating, he in-

terned at the 17th edition of the São Paulo Art Biennial. At the end of 1983, Humberto asked his brother to help him deliver a large order. Ever since that day, they form one of the most prized teams in contemporary design. They are recognized for suggesting new codes of interpreting objects in addition to having contributed to changes in perspectives about everyday life. Their first exposition as a team was in 1989, at the Nucleon Gallery, in São Paulo. The collection of iron chairs was called “Desconfortáveis” (Uncomfortable), a selection of pieces that discussed the artistic aspect, error and poetry that are part of discomfort.

In 2009, ten years after their debut, Campana Studio was chosen to celebrate its anniversary at Vitra Design Museum, in Germany, which was also commemorating its 10th anniversary. Today, the Campana Brothers are known for their unmatched and sophisticated technical qualities: art design. Their work is part of the collection of the world’s main museums, including Vitra Design Museum in Germany, MoMA in Nova York, and Geroge Pompidou in Paris. Fernando and Humberto Campana were awarded the “Prêmio Especial Museu da Casa Brasileira” (Design Award of the Brazilian House Museum) in 2011 and Designer of the Year by Design Miami in 2008 Originally from São Paulo, the Campana Brothers are enjoying their two expositions in the city to get to know Rio de Janeiro, which they love.

Nazareth center table

Photos: Courtesy and Andre´s Otero

Anemone armchair

Expositions are on display in the following addresses: Centro Cultural Banco do Brasil Rua Primeiro de Março, 66 – Centro Rio de Janeiro Phone: (21) 3808 2020

86 T&B Petroleum # 32

Galeria Luciana Caravello Arte Contemporânea “Arte de Sentar com Arte” Rua Barão de Jaguaribe, 387 – Ipanema Phone: (21) 2523 4696


of Luiz Cezar Quintans, Brazilian Lawyer at G. Ivo Advogados. He represents International Oil Companies in the acquisitions of other Oil companies in Brazil; Assisted International Oil Companies in the preparation of studies relating to the development of business in Brazil.

opinion

Establishing a new

company in brazil There is no specific license or permit required to operate in Brazil in order to establish a new company (subsidiary or affiliate) in Brazil, as long as the company will be carrying out prospecting and drilling services, acting as contractor to perform prospecting activities and/or drilling services for concessionaires of services solicited by the National Petroleum Agency – ANP. However, concessionaires (and/or service companies) are required to use “local content”. Therefore, foreign investors often set up a local outfit via a Brazilian subsidiary, which provides them direct control over activities, management and personnel.

I

t is therefore noteworthy to mention that oil companies in Brazil must achieve high percentages of local content in certain phases of the operation. In light of the difficulties in creating a branch, foreign investors generally choose to establish a Brazilian subsidiary, since a company headquartered in Brazil – regardless of the fact that it is controlled by foreign capital – is a Brazilian company for any and all legal purposes and will thereby increase local content. The most common kind of company in Brazil is the limited liability company (called “limitada”). The Brazilian resident legal entity (as “Limitada”) needs at least two (2) partners, also known as quotaholders, there is no requirement for a local partner and therefore, both can be foreign resident individuals or legal entities. To constitute a limitada, the partners must sign the articles of association (contrato social) and comply with the registration requirements of the state in which the head office of the company is to be located. A partner who is not a Brazilian resident must be represented in its capacity as a quotaholder of the limitada by a Brazilian resident. Such attorneyin-fact has the power to: (i) attend, represent and participate at any and all events and resolution of any matters submitted to the partners of the company, including the exercise of voting rights; (ii) represent the partner before commercial and civil

registries; (iii) receive service of process on behalf of the partner with respect to company matters. Such attorney-in-fact will not have powers to represent the limitada but only the quotaholder while exercising its powers as a quotaholder of the company. The powers to be granted may be restricted to conform to the grantor’s interest. The Board of Directors must to be domiciled in Brazil too. The approval of the election of each director, with or without special nomination, will be automatic and he/she will assume the job as soon as the corresponding work visa to his/her permanence in the country is obtained, whose process will be ongoing at the competent public agencies. A power of attorney (and other documents) executed outside of Brazil must be notarized and stamped by the Brazilian consulate nearest to the jurisdiction where the power of attorney was signed before it can be used in Brazil2. The articles of association and any amendments thereto may be drafted to suit the purposes of the limitada and must include at least: (i) the name of the quotaholders; (ii) the name of the limitada, which must include its purpose and the expression “Limitada” (or its abbreviated form Ltda.) and cannot be identical or similar to the name of a pre-existing company; (iii) the address of the head offices; (iv) the company’s purposes, which must be clearly described; (v) the company’s duration, which may T&B Petroleum # 32

87


opinion be determined or undetermined; (vi) the company’s stated capital, whether or not it is fully paid in and, if not, the payment term therefore; (vii) each partner’s participation in the capital and that the responsibility of each partner is limited to the company’s subscribed capital; and (viii) the powers of the company’s managers including the corporate actions that require prior approval from the partners, in addition to those specified by law. The articles of association of the limitada must be filed with the competent state commercial registry and, in order to have legal effects retroactive to the date of its execution, be filed within thirty (30) days. The stated capital of a limitada is represented by units called “quotas.” The company’s stated capital is to be denominated in Brazilian currency and recorded in the articles of association, as amended from time to time to reflect any assignment and transfer of quotas and capital increases and reductions. The management of the limitada may be vested in one or more Brazilian residents, appointed by the partners in the articles of association or in a separate document. The limitada is liable for all acts performed on its behalf by managers acting within the scope of their powers. The articles of association of the limitada will establish the powers and limitations of the appointed officers. Prior to sending any money to Brazil, the newly formed Brazilian subsidiary needs to apply for an access to the Brazilian Central Bank system (called “SISBACEN”) and the foreign partners must obtain at SISBACEN an identification number which will allow them to log into the Central Bank’s information system to register their investments. Any amounts sent by the foreign partners must be registered with the Brazilian Central Bank within thirty (30) days from the date of entry of the funds. The registration is made electronically through online information system of the Central Bank. Registration with the Central Bank is important as it represents the investor ’s tax basis for its investment in Brazil and it will be used for calculation of capital gains in case of future repatriation of capital, without restrictions. Fur-

thermore, no currency exchange restrictions are imposed on dividends distributed to quotaholders domiciled abroad. The Brazilian tax system is mainly regulated by the Federal Constitution and by the National Tax Code (CTN), both of which establish general tax rules applicable to the Federal Union, the States, the Municipalities, and the Federal District. The Brazilian tax system comprises different categories of taxes, and the main ones may be classified as: (i) taxes on income and revenues, (ii) taxes on production and circulation of goods, and on services and cross-border trade, and (iii) taxes on financial operations. In order to hire foreign workforce in Brazil, a relevant work visa/permit must be previously requested by the newly formed Brazilian company. The proper visa depends on the activities that will be performed in Brazil. Depending on the characteristics of the relationship with the foreign labor a different type of visa may be applicable and, consequently, the Brazilian company may hire the individual as an employee, as a nonemployee officer or not maintain a formal relationship with the individual. Once the applicable visa is selected, the Brazilian company has to comply with certain rules in what regards the relationship to be maintained with the foreigners. Any visa issued to a foreigner may be extendable to his/her family and this should be requested in the visa application. The most common visas and respective relationships to be established between the foreigner and the Brazilian entity are: Type of Visa

Type of relationship

Temporary Visa

Employment

Permanent Visa

Employee officer or non-employee officer

Technical Visa Business Visa

No relationship between the foreigner and the Brazilian entity

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