#62
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interview
John A. Prestbo A TALK ABOUT CORPORATE SUSTAINABILITY
environment
MAPPING FAUNA AND FLORA IN BRAZIL AND ABROAD
OPTIMIZING RESOURCES, RECYCLING MATERIALS THAT WOULD BE DISCARDED, REUSING PRODUCTS ONCE SEEN AS TRASH: THE WORLD REVIEWS WASTE MANAGEMENT’S LOGIC
business
PETROBRAS INVESTS TO GROW STRONGER AT THE ETHANOL MARKET
around the world SINGAPORE: ECONOMIC MIGHT AND URBAN INNOVATION
#62 / 2012 - a quarterly publication by Petrobras Corporate Communication www.petrobras.com/magazine
_RETHINK EXECUTIVE MANAGER FOR CORPORATE COMMUNICATION_ WILSON SANTAROSA | INTERNATIONAL COMMUNICATION MANAGER_ IZEUSSE DIAS BRAGA JUNIOR | RELATIONSHIP MANAGER_ GILBERTO PUIG | SPECIAL PROJECTS MANAGER_ PATRICIA DE MELLO DIAS | MULTIMEDIA MANAGER_ PATRICIA FRAGA DE CASTRO E SILVA | EDITOR AND COORDINATOR_ ESTEPHANI BEILER ZAVARISE | EDITOR AND MULTIPLATFORM COORDINATOR_ ERIC MOREIRA SILVA | EDITORS_ BRUNA OLIVEIRA BAFFA, CLAUDIA GISELE PERES MARTINS, JÚLIA GOULART JERONYMO, LEONARDO QUEIROZ DE SÁ, MONIQUE BENATI RANGEL, PAULA ALEXANDRE SCHUABB | ADMINISTRATIVE AND LOGISTICAL SUPPORT_ JOÃO LUIS DOS REIS MARTINS PENA | INTERNS_RAPHAELA ARAUJO DE ARAUJO, RENATA SOUZA FARO, STEPHANIE SILVA DE OLIVEIRA editorial staff
ADRIANO FERREIRA LIMA_ SOCIAL RESPONSABILITY | EDUARDO GUTTERRES VILLELA _EXPLORATION AND PRODUCTION AUGUSTO LEONARDO DE GOES TIRRE_ INTERNACIONAL AREA | GUSTAVO MELIONE ABREU_DOWNSTREAM | LIZA RAMALHO ALBUQUERQUE_ RESEARCH CENTER MARIO ADRIANO VIEIRA CAMPANILE_ CORPORATE IMAGE AND BRAND | MARIZA PELEGRINETI LOURENCO GRYNSZPAN_ ENGINEERING | NILTON MARLUCIO DE ARRUDA_ HEALTH, SAFETY, ENERGY EFFICIENCY AND THE ENVIRONMENT | ORLANDO COSTA GONÇALVES JUNIOR_ INVESTOR RELATIONS | PATRICIA ALVES DO REGO SILVA_STAFF RELATIONS | PAULA DE OLIVEIRA ALMADA MORAES_PRESS SANDRA VASCONCELLOS CHAVES_GAS AND ENERGY | VALÉRIO TITO GAMA_PETROBRAS BIOCOMBUSTIVEL production
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PUBLISHER_ FLAVIO ROZEMBLATT | CUSTOMER SERVICE DIRECTOR_ PALOMA BRAGANÇA CREATIVE DIRECTOR_ MARCELO CORTAZIO | PROJECT MANAGER _ PAULA WIEDERKEHR EDITOR_ MARCO ANTONIO BARBOSA | REPORTERS_ANDRÉIA GOMES DURÃO / FRANCISCO BARBOSA / VINICIUS MEDEIROS DESIGNERS_ CIBELE BUSTAMANTE / PRYSCILLA BRITTO | WEB DESIGNER_ DIOGO ADIALA CUSTOMER SERVICE_ NATASHA BRUST | MULTIMEDIA PRODUCER_ ANDRESSA XAVIER FINANCIAL MANAGER_ ROBERTA FERRAZ | TRANSLATION_ MÔNICA LOUREIRO | REVISION_ KATHIA FERREIRA Petrobras Magazine is not for sale. To request a subscription, information or to send letters or suggestions, contact the editorial staff: Petrobras/Comunicação Internacional Av. República do Chile, 65, sala 1001 • Rio de Janeiro – RJ | CEP: 20031-912 Brasil E-mail: petromag@petrobras.com.br Web: www.petrobras.com/magazine The contents of this issue were finished at February 28th, 2012 Complete or partial reproduction of the articles published herein is authorized by mentioning the source. © Copyright 2012 by Petrobras. Affiliated to the Brazilian Association of Business Communications.
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Photo: Paula
Alexan dre Sch uabb
Photos: Alcir da Silva
John A.Prestbo, executive director at the Dow Jones Sustainability Indexes: detailing the concept of corporate sustainability on an interview in New Jersey
Photos: Paula
Wiederk ehr
_we count on
Producing Petrobras Magazine’s Pro cov cover: aiming to translate to ima images themes linked to the was management waste
[2]
[1]
[3]
[4]
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[1] edu monteiro, photographer_ “Taking the photos for this issue’s cover was a great job! Besides achieving a cool aesthetic result, breaking glass and bottles is much funnier than it looks. It’s almost therapeutic.” [2] andré motta
de souza, photographer_ “While I was photographing at Urucu, I discovered a giant forest full of small details!”
[3] jack hagley, infographic artist_ “My first word was ‘tractor’, so any job I get that involves drawing one, such as the infographic about the second-generation ethanol, fills me with childish glee.” [4] alcir da silva, photographer_
“It was an interesting experience being able to photograph at Dow Jones Indexes’ office in New Jersey. The work environment is much calmer than the typical Wall Street routine.” [5] stefan hess, photographer_ “Visiting the Cruz Alta plant gives us the exact size of the potential of ethanol to the future of energy in Brazil.”
huabb ndre Sc ula Alexa Photo: Pa
_TO OUR READERS For the 62nd issue of Petrobras Magazine, we sought information in many places around the world to keep you updated about the universe of energy. Our team went to New Jersey (USA) to talk to John Prestbo, executive director at the Dow Jones Sustainability Index. The meeting yielded an objective interview, in which Prestbo speaks about corporate sustainability, management transparency and the importance of having executives committed to the stakeholders’ interests.
Photo: Andr é Motta de Souza / Petro bras
Image Bank
Leav Leaving the United States, we land at Petrobras’ base at Urucu, on the Brazilian Amazon, searching for a closer look at the forest known for its green immensity. Macrophotography was the ch chosen technique to capture the small details which reveal the ri richness of the Amazon’s flora and fauna. Here you will be able to see some of these unique, exuberant species. From the Amazon, we went to Singapore, the highlight of th Around the World section. The state-city is featured on this the ed edition because of its trading vocation and its innovative stance regarding urban development, among other reasons. Back to Br Brazil, we still had enough stamina to visit the Cruz Alta ethanol plan plant, at the state of São Paulo, aiming to show the perspectives for etha et ethanol in Brazil and throughout the world – and Petrobras’ growing participation in this market.
e Schuabb a Alexandr Photo: Paul
In Initiatives that are being developed in several places around the world worl are presented in our cover story regarding the global challenge wo involved in the management of waste. We show how companies, governments and citizens are looking to reuse, in an effective way, ma materials that would be discarded, using several types of waste as a ra material that generates new products – thus sparing money and raw natural resources. “Challenge” is also a key word to Maria das Graças Silva Foster, the first “C wo woman to assume Petrobras’ presidency. You will know more about this and other issues about the company on the News section.
Our team at Urucu, in the Amazon: a macrophotography essay to capture impressive details
In order to enable more English-speaking people to follow our content on the iPad, now the Petrobras Magazine app has a version in En English, which can be downloaded for free at the App Store. You will also find all the contents from the print edition, as well as photos, infographics and all-new videos, at www.petrobras.com/magazine.
Petrobras Magazine team
Cover photo: Edu Monteiro / Fotonauta
how to enjoy the magazine Petrobras Magazine is not limited to paper. Boxes with this color, spread throughout the edition, indicate that there is extended content from the article in question, either on the internet (at our site www.petrobras. com/magazine) or the iPad version of the magazine. Our information reaches you in a dynamic way. The new Petrobras Magazine – interconnected and integrated. Interactive and current. Read. Access. Participate. Enjoy.
print magazine_
iPad_ Interactivity, videos, audio, photos and texts
facebook_ Updates, new content and comments: facebook.com/ fanpagepetrobras
web_ www.petrobras.com/ magazine: official site with photos, videos, infographics and texts
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_INTERVIEW
_NEWS The latest news about Petrobras
A chat with John Prestbo, Dow Jones Sustainability Index’s executive director
30 _BUSINESS Petrobras' growth in Brazil's ethanol market
36 _HOW IT WORKS Second-generation ethanol
_AROUND THE WORLD Singapore: vibrant economy and sustainable urbanism
38
44 _ECONOMY The changes in the flows of the global commerce of oil
CONTENTS #62_RETHINK
_GLOBAL CHALLENGE
28 _IN DISCUSSION
18
Rethinking waste: new applications and solutions for an old problem
Maestro Luis Szarán and the hope that comes from garbage
48
52
_ENVIRONMENT
_ESSAY
Companies and research institutions united for knowledge
Our lenses magnify Amazon’s fauna and flora
_OVERVIEW Where and how Petrobras operates around the world
62
INTERVIEW
The executive director of the DOW JONES SUSTAINABILITY INDEX analyzes how the biggest companies in the world have been dealing with issues such as transparency in management, SOCIAL RESPONSIBILITY and corporate SUSTAINABILITY
BY MARCO ANTONIO BARBOSA AND MONIQUE BENATI // PHOTOS ALCIR DA SILVA
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I
n order to be sustainable, a company must have consciousness of its presence in society and it should be one of the defining guidelines in the way business is conducted”. The affirmation was made by John A. Prestbo, executive director of the Dow Jones Sustainability Index (DJSI), a ranking determined annually since 1999 by Dow Jones Indexes, the renowned U.S. firm specialized in research and socio-economics studies. The DJSI defines which corporations, among the biggest 2,500 firms of the world, are at the forefront when it comes to sustainability. To understand more about the DJSI and the issues related to corporate sustainability, Petrobras Magazine went to the company’s headquarters in New Jersey (USA) to talk with John Prestbo. The journalist is a recurring figure in debates on the topic in the U.S. media and coordinates the DJSI since its inception. He outlines a broad overview of sustainability – its economic and social implications, its influence on corporate financial performance and the return (be it tangible or not) that comes from the investment in sustainable practices.
1 For starters, what is the Dow Jones Sustainability
Index definition of sustainable development? John A. Prestbo: We call it corporate sustainability. It’s about companies that incorporate sustainability practices into its business strategy, to increase shareholders value. A company that simply does good, but makes no money is not sustainable in itself. So you have to do well to do good. And you can do good by doing well. The issues related to sustainability –whether is the environment, workers policies or protection of intellectual capital – must be taken into account when making decisions to move ahead.
2 Regarding the financial performance
of the large companies, is it worth investing in sustainability? John A. Prestbo: It is worth, for a number of reasons. In many cases, sustainability practices actually save money for the firms, by reducing costs, or these procedures can open new markets. In sustainability circles, there’s the concept of a company’s “licence to operate”. That means the social acceptance of that corporation, of its influence in the communities and in the life of the population, of their customers and employees. So firms stay in business in common consent of those who deal with it and work for it. In order to be sustainable, a company must have consciousness of its presence in society and it should be one of the defining guidelines in the way business is conducted.
3 How do you assess the results of the
survey and define the Index ratings? Are the companies constantly observed or just for a certain period? John A. Prestbo: We have our annual assessment. It starts in February, when we send a letter to the 2,500 largest companies in the world inviting them to participate in our process. Then they get a password to our website, to which they can go and sign up, or not. Since we started in 1999, we’ve
INTERVIEW
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seen a steady increase in the number of companies participating in the survey. We also have seen an increase – but at a lower level – of companies that publish their sustainability reports and put out the kind of data that we can use to answer the questions on their behalf. The evaluation is done in Switzerland, using score mechanisms that help our judgement. Each one of our analysts is very familiar with the details of a specific industry. Those specialists know what the trends are, what the little problems are. They compile the scores and the DJSI takes the top 10 of each industry segment. The Index is put together in September. Then we monitor those companies through websites that gather information not only from news services, but also monitor NGOs websites. If a company comes into a situation in which it is discovered to have behaved improperly, not handling the situation in a forthright and transparent manner, this is noticed by our analysts and brought to an overside commitee that will rule if that company remains in the Index. At the beginning of 2011 we had to eliminate (Japan’s) Tokyo Eletric Power – not because there was an earthquake, but because obviously they didn’t have the safety procedures in hand as well as they claimed, and they were a little chaotic in responding to the situation (an earthquake in Japan in March 2011 caused severe damage to the power supply in the country, including leakage of radioactive material in seven nuclear power plants). So we removed them. And we did that publicly, and we announced why. It usually happens when something pops up and exposes weaknesses that weren’t evident before.
4 The DJSI was launched in 1999.
How do you view the changes that have occurred since then considering company’s attitudes towards sustainability? John A. Prestbo: They’re still in progress. When we started, Europe was by far the place where corporations had adopted sustainability more widely than anywhere else in the world. In the United States, we had to explain what sustainability was; it wasn’t a word that was very much used. We were a country of socially responsible investing, which is a slightly different concept, and it was accomplished mainly through the exclusion of some industries from the investor’s portfolio. But we believe you can be in any legal segment of business and still practice sustainability. Sure, being in certain types of business, such as tobacco or firearms, pose some risks to the company. And sustainability practices are dealing with these risks, how these risks are being managed and mitigated. Likewise, sustainability can bring opportunities to companies. For example, some oil companies now are involved in the research of fuel cells, or batteries. It’s an opportunity in the renewable energy field that they don’t want to pass on. They could think very narrowly and stay restricted to the oil and gas business. But if they think more broadly, they’ll see
that they are in the business of energy, not just the oil business. They don’t want their shareholders to miss this opportunity. So, sustainability is not an exclusionary concept. It is inclusionary and is related to the management of risks and the exploitation of opportunities that present themselves in an environmental, social or economical manner. And it is always evolving, moving forward.
5 Speaking specifically about the energy market,
how do you see the companies in this sector? What were the main advances in the area of sustainability since 1999? John A. Prestbo: The energy companies have become more cognizant that energy means more than merely oil and gas. In 1999, certain larger companies in USA, Europe, Asia and probably in Latin America as well, were very focused on oil exploration and production and they equated that to energy. Now they have come to see that energy is a bigger thing. So, a broadening of horizons has definitely taken place. They’ve become more conscious of workers’ safety. The industry woke up and increased the safety in areas where accidents can happen. But it hasn’t become as sensitive to what we can call “environmental unintended consequences”. The consumption of energy has environmental repercussions, and in 1999 they seem to be saying “Hey, this is not our problem!” Now the companies are becoming more aware that, yes, they are part of this society, and they are part of the planet. So there has been a shift of thinking, and in many cases, a shift of attitude. But it’s uneven, and it’s uneven for every industry, because the priority of surviving until the next year takes precedence. Also, a lot of sustainability processes require constant work. You need to build information systems that tell about things like emissions, or workers’ practices in different places. And information takes time to gather, and it takes time to be put into a data system that speaks intelligently to the people who make the decisions.
A lot of progress has been made just by having the right information at the right place. But it’s not enough being able to gather the information; it must be delivered in a meaningful way to those who make the decisions.
6 One of the mottos that guide the DJSI is the
sentence “What gets measured gets done”. What are the principal issues when measuring exactly how sustainable a company is? John A. Prestbo: Metrics are very important. They establish a baseline and they are a way of keeping score. Investors keep score by the stock price. Executives keep score by the company’s income and their own bonuses. But when it comes to actually running a business that gets more and more complex the larger you get, unless you have ways of checking your progress or the results of the decisions you’ve made earlier, you will lose track of all the stuff that happens around you. With the right metrics, you can not only measure your needs, but also the results of your choices. What gets measured gets done, and overtime, gets done better.
SUSTAINABILITY IS NOT AN EXCLUSIONARY CONCEPT. It is INCLUSIONARY and is related to the management of risks and the exploitation of opportunities”
7 Within the general panorama of concerns about
corporate sustainability, which areas have progressed most and which areas still need more attention? John A. Prestbo: Not all industries have the same exposure to sustainability issues. A mining company has very large issues regarding environment, workers’ safety, transportation and all sort of stuff. A media company doesn’t have them; its safety issues are office issues. Quite frankly, I think the most visible progress has been in industries that have the tougher exposure to sustainability issues. They just got the wake-up call earlier and they had to start to make choices, or they wouldn’t be able to hire anybody, or public goodwill would turn against them. They’ve made the most progress in dealing with the risks.
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On the index for six years For the sixth year in a row, Petrobras integrates the Dow Jones Sustainability Index, standing out on issues such as environmental policy, social impacts on communities, biodiversity, climate strategy and transparency. The company also ranks among the energy companies with the best management practices in the world. According to the Index’s most recent evaluation, Petrobras has improved in the evaluation of the economic and social dimensions and maintained its good performance in the environmental dimension. And for the fifth time, the company earned the top score on transparency.
8 Can we say that the concern about projects connected to social responsibility is now the main factor to be taken into account in companies’ strategies? John A. Prestbo: Some companies are quite good at handling the matters of social responsability. Corporations such as 3M and Intel give their employees a percentage of their labor time for them to apply on anything they want. This adresses not only the workers’ morale, creating good feelings towards the company, but also opens the drawers of innovation. And is that socially responsible? Well, innovation creates jobs. And creates jobs not only on the local where the firm is, but also in places that could really use some good jobs. Putting those opportunities out there is another decision, and it comes from being aware of the needs. The corporations have to be aware of the need for jobs, or the desire of economic growth, in the communities where they operate. So innovation becomes a socially responsible thing to do. They are not trying to fix things, they’re just pursuing their corporate strategy, but with an awareness of needs and opportunities. Social responsibility can take many forms.
12|13 in relation to their investors, how is the investment in sustainability beneficial and desirable for the big companies? Also, in relation to the transparency of the decisions dealing with corporate governance, what is the weight of transparency in your analysis? John A. Prestbo: We are big fans of transparency. People misinterpret it sometimes. They say: “We don’t wanna put all our secrets out there.” But that’s not what transparency is. It simply means being open about the way decisions are made, and being candid about the considerations taken into account when making these decisions. That is important to shareholders. Everything that has been identified as a sustainability practice has a direct bearing on the health and the future of the company. Governance is a big part of the transparency process. Companies not always can tell you what they are going to do next month, or next year, but they can tell you that they have people in their board of directors and in their executive suite with a good background, representing this and that segment of the stakeholders base. So they can assure that governance is not going to be hijacked by someone who runs off to some strange direction. But when this does happen, what I see now is that people are more and more asking: “Where the heck was the board of directors on that one?!” The shareholders and stakeholders expect the companies to act in their interest, and not in the interest of some
INTERVIEW
9 Regarding the responsibility
ACCOUNTABILITY is now being identified as an important feature of well-managed companies. And I think the sustainability movement has helped to RAISE THE AWARENESS among a greater portion of the population”
executives. Responsability, or accountability, is now being identified as an important feature of well-managed companies. And I think the sustainability movement has helped to raise the awareness among a greater portion of the population.
10 Have you observed any
change in the behavior of investors – seeking investment returns in the long range instead of in the short range? John A. Prestbo: No. I think investors are investing because they want returns. And their timetable is frequently different from that of the companies. They don’t like the market to go down and are unhappy when it does, and they are especially unhappy when the stock they hold is down and the rest of the market is up (laughs). Their focus is on steady growth and returns. By contrast, sustainability practices and their return are on a much longer
term. These two perspectives would equalize if companies combined or integrated their social responsability and financial reports. Investors still have not acquired the capacity of evaluating sustainability practices in a vacuum, and to extract from that information to guide them in their investments.
11 Does a new trend influence
the surveys you use to compose the DJSI? Could you name one of them? John A. Prestbo: One of the questions included in the questionnaire and that will be present next year in more details is the scarcity of water. In 1999, it was something that we did not pay attention to, and it has become a key issue since then. We now make questions about water use in companies, how they protect their water supplies... Therefore, this is an example of a trend that has been incorporated over the last years.
THE FIRST WOMAN to lead Petrobras The new president of Petrobras, Maria das Graças Silva Foster, took up her post on February 13. Graça, as she is known, replaced José Sergio Gabrielli de Azevedo, who presided the company for six years and seven months. A long-time (32 years) employee of the company, the executive is the first woman to hold the post since the creation of Petrobras in 1953. The new president has a degree in Chemical Engineering and a master’s degree in the same area; she is also a post-graduate in Nuclear Engineering and holds a MBA in Economics Studies. Graça had been serving since 2007 as Petrobras’ director of in the company and in subsidiaries of the system, Graça also acted as secretary of Oil, Natural Gas and Renewable Fuels at Brazil’s ministry of Mines and Energy between 2003 and 2005. The new directors of Exploration and Production, José Miranda Formigli Filho; Gas and Energy, José Alcides Santoro Martins; and of the Corporate and Services area, José Eduardo de Barros Dutra, also took up their respective offices.
Photo: Geraldo Falcão / Petrobras Image Bank
Gas and Energy. Besides occupying several executive positions
THE ENERGY COMPANY OF THE
YEAR
In the latest edition of the Platts Global Energy Awards, announced last December in New York, Petrobras was doubly rewarded, as the Energy Company of the Year and the Energy Producer of the Year. Platts, one of the world’s leading energy and commodities information agencies, pointed out the strong market position and the company’s advances on the energy & gas sector. Among the awards criteria, topics such as technological innovation, environmental responsibility, efficiency and commitment to sustainability were evaluated. Upon receiving the award, the company’s president at that time, Jose Sergio Gabrielli de Azevedo, said that it was “the recognition that Petrobras is treading the right path.” The company was also a finalist in the Industry Leadership and CEO of the Year categories. The agency has been conducting the Platts Global Energy Awards for 12 years, honoring energy companies for their performance and innovation.
Declaration of commercial
VIABILITY OF GUARÁ In late December, Petrobras presented to the National Agency of Petroleum, Natural Gas and Biofuels (ANP) the Declaration of Commercial Viability of the accumulation of oil and gas in the area of Guará, at the pre-salt Santos Basin. The new field has a recoverable volume estimated at 2.1 billion barrels of oil equivalent (boe) – one of the largest in the country – and is formed by reserves of good quality oil (30o API). The consortium of the Block BM-S-9, operated by Petrobras, suggested that the field could be called Sapinhoá (name given to a species of marine shellfish by the Tupi-Guarani indigenous people). The consortium also submitted to the ANP a final report about the area’s evaluation plan. Four wells were drilled in Guará, including one for a reservoir data aquisition. In three of the wells were completed four formation tests, as well as a five-month long duration test (LDT) in the discovery well. The LDT confirmed an excellent productivity at the discovery well, maintaining the flow throughout the test period and revealing information about the reservoirs’ properties. Block BM-S-9 is operated by Petrobras (45%), in partnership with the BG Group (30%) and Repsol Sinopec Brazil (25%).
HIGHLIGHT at the Institutional Investor ranking Petrobras was named the company with the best practices in investor relations within the oil and gas sector by the Institutional Investor magazine. The result is part of the 2011 Latin American Executive Team ranking, sponsored by the publication and presenting the best Latin American professionals in the field of investor relations, who were ranked by 572 analysts. In the same survey, Petrobras’ president at that time, José Sergio Gabrielli de Azevedo, was appointed the Chief Executive Officer of the year (elected by investment funds’ analysts); and Almir Barbassa, the company’s Chief Financial and Investor Relations Officer, was named the best finance executive in the oil and gas sector. Institutional Investor is a leading publication on global finances, with a worldwide circulation and a 50-year-old market tradition.
Wind farm GOES INTO COMMERCIAL OPERATION With an investment of US$ 424 million, the Mangue Seco Wind Farm, Petrobras’ first wind farm, went into commercial operation in November 2011. Located in the state of Rio Grande do Norte, Northeastern Brazil, it is formed by plants Potiguar Cabugi, Juriti and Mangue Seco. The Potiguar plant went into commercial operation on August 26, and the Cabugi and Mangue Seco, on September 24 and October 6, 2011, respectively. The whole wind farm is in commercial operation since the beginning of activities of the last plant, Juriti, on November 1. Located next to the Clara Camarão refinery in Guamaré, the plants are equipped with 52 wind turbines, each one with a 2 megawatts (MW) capacity. That means that the Mangue Seco Wind Farm has the largest installed capacity (104 MW) among the farms equipped with this type of turbine in Brazil. That’s enough to supply electricity to a population of 350,000 inhabitants. The energy generated by the units will be available for the National Interconnected System. The Cabugi plant was built in partnership with Eletrobrás, the Mangue Seco plant was built in partnership with Alubar Energia, and the Potiguar and Juriti plants were built in partnership with Wobben WindPower.
NEWS
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Aviator Gérard Moss
RECEIVES HONOR Aviator Gérard Moss, founder of the Rios Voadores (Flying Rivers) project (subject of a story in issue 61 of Petrobras Magazine) received on November 18 the medal and the title of Member of the Order of the British Empire (MBE), granted by the Queen of England, Elizabeth II. The award, held at Buckingham Palace in London, was a recognition of the services rendered by the aviator on issues concerning the environment in Brazil. A pilot and engineer, Moss became a Brazilian citizen two decades ago and has dedicated himself to promote the preservation and rational use of water. With the Flying Rivers Project, started in 2007 and sponsored by Petrobras, Moss has enabled scientific researches on currents of air laden with water vapor, that pass through the Amazon Forest and carry humidity to other regions of Brazil – the so-called “flying rivers”. “I am very surprised and to the collaboration that I’ve maintained for many years with a number of Brazilian scientists, on the Waters of Brazil (between 2003 and 2004) and the Flying Rivers projects, and also to the trust of the people in charge of the Petrobras Environmental Program”, says Moss.
Photo: Stefan Hess
honored to be awarded an MBE. But I am fully aware that I owe this recognition
Lula-Mexilhão pipeline
BEGINS OPERATING IN THE SANTOS BASIN Considered a milestone in Brazilian engineering, the Lula-
operating pressure of 250 bar (unit of pressure). It starts from
Mexilhão pipeline, which connects the field of Lula to the
a water depth of 2,145 meters (where it is connected to the
Mexilhão platform, located in shallow waters in the Santos Basin,
platform vessel Cidade de Angra dos Reis, in the field of Lula), and
began to be operated in September 2011, by the consortium of
goes up until it reaches 172 meters of depth, connecting to the
the BM-S-11 block, formed by Petrobras (65% – Operator), in
Mexilhão platform – the largest fixed production unit installed in
partnership with BG Group (25%) and Petrogal SA Brazil - Galp
the country, owned by Petrobras.
Energia (10%). With a capacity to transport up to 10 million cubic meters per day, the installation will carry gas produced in the
Lula-Mexilhão is connected to the pipeline that links the field
Pre-Salt Pole of that basin. The project is strategic not only in
of Mexilhão to the Monteiro Lobato Gas Treatment unit in
developing the production of the pre-salt Santos Basin, but also
Caraguatatuba (state of São Paulo), enabling the gas flow to
to increase flexibility in gas supply to the Brazilian market.
the coast, and to the pipeline Caraguatatuba-Taubaté, which connects the gas produced at that unit to the distribution
In depth and length, it is the largest submarine pipeline ever
network of natural gas to the Brazilian market. The plants
installed in Brazil – 216 km long, 18 inches in diameter and
belong to Petrobras.
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IN RALLY DAKAR
about 9,000 kilometers between Mar del
NEWS
Historic mark for Petrobras
Finished on January 15th, after a journey of Plata (Argentina) and Lima (Peru), the 2011 Dakar Rally saw an outstanding performance from team Petrobras Lubrax – that has been participating in the competition for 25 years. They won the best position for a Brazilian team, finishing at 8th place in the overall standings with the Tatra truck driven by the trio André Azevedo, Maykel Justo and Mira Martinec. The other two Petrobras Lubrax’s vehicles also completed the race, considered one of the world’s toughest. The duo Jean Azevedo and Emerson Bina Cavassin, driving a Nissan, came in 23rd place among the cars competition. Denísio do Nascimento, piloting a Honda, finished 24th of 443 that started the race on January 1st in Mar del Plata, only 249 vehicles reached the Peruvian capital.
Photo: Maindru
among the motorcycles competition. Out
New discovery at the Gulf of Mexico
The world’s most valuable trophy
A new oil discovery in the Southwestern corner of the Walker Ridge concession area – on deepwater, at the North America’s Gulf of Mexico – was reported in
The wealth of the pre-salt reserves
November 2011 by the consortium formed by Petrobras
met the world of motorsport in the
America (35% participation), Statoil (the consortium’s
last Formula 1 Petrobras Brazilian
operator, with a 35% stake), Ecopetrol America and OOGC
Grand Prix, conducted in November,
(equity of 20% and 10% respectively).
in São Paulo. The top three pilots The discovery of Logan is located approximately 400
Jenson Button), and the winning
kilometers southwest of New Orleans, at a water depth
team, Red Bull Racing, all received trophies with encrusted rocks taken from the pre-salt layer. The narrative Do Fundo do Mar ao
Photo: Petrobras Agency
(Mark Webber, Sebastian Vettel and
of around 2,364 meters, and was made by drilling of the well WR 969 #1 (Logan # 1), at the WR 969 block. Further exploratory activities will define Logan’s recoverable volumes and its commercial potential.
Topo do Pódio – O Troféu Mais Valioso do Mundo (“From the
In U.S. portion of the Gulf of Mexico, Petrobras is the
bottom of the sea to the top of the podium – The world’s
operator of the fields of Cascade (100%) and Chinook
most valuable trophy”), which can be seen at the website
(66.7%) and holds a stake in the discoveries of Saint Malo
www.petrobras.com.br/trofeu, showed how to overcome
(25%), Stones (25%), Tiber (20%), Hadrian South (23.3%),
big challenges through a lot of technology, team spirit and
Hadrian North (25%) and Lucius (9.6%), all with significant
talent. The rock’s saga – from the pre-salt to the hands of
oil reserves. Petrobras also holds other exploration
the GP winners – was told through a variety of multimedia
concessions in the region, which will be tested later on.
projects: videos posted on Petrobras website, an advertising campaign, promotional activities and a cultural competition run on the social networks.
video_ watch a special video about this subject on www.petrobras.com/magazine and on the iPad
GLOBAL CHALLENGE
rethinking progress Humanity’s technological and industrial development has brought an increasing accumulation of waste. Now, COMPANIES, GOVERNMENTS AND CITIZENS look for ways to break that paradigm and REUSE THOSE MATERIALS, GENERATING WEALTH from what was once viewed only as garbage
BY MARCO ANTONIO BARBOSA // PHOTOS EDU MONTEIRO / FOTONAUTA
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T
here are countless factors which humanity can use to measure its own technological and economical development throughout the last centuries. The Industrial Revolution, the evolution in transportation, increased urbanization, the advancement of the chemical and pharmaceutical industries, the power-generation plants – all these factors heightened the well-being of population, helping us to have a more pleasant and prolonged life. Since the increasing mechanization of manufacturing activity, which began in the second half of the 18th century (with the introduction of the steam engine and other innovations) to the present day, the production of wealth in the world has multiplied itself more than 10 times, consistently for the first time in the history of humanity. However, the realization that all this progress implies in an ever growing production and accumulation of waste is as unwanted as it is unavoidable. All industrial processes leave debris and unused remains and contribute, even indirectly, to pollution. And people generate an increasing amount of discarded materials
E-waste The Korean company LG created the program ecoMobilization, to promote the collection of used electronics (of any brand). This avoids the increased accumulation of so-called e-waste, that contains toxic materials and heavy metals, besides reusing old appliances – recycling plastic and using metals such as gold and cobalt for other purposes.
which, if not handled correctly, will turn into trash - and in dirt and waste. But “waste” and “trash” are not necessarily synonymous. Behind the generation of all kinds of unwanted matter, there’s another industry, made up of innovative initiatives, processes and ideas, facing the challenge of dealing with waste as a source of opportunities and generation of wealth. In this context, the so-called “3Rs” – reduce, reuse and recycle, in addition to other forms of reutilization – stand out not only as ways to give new applications to whatever remains, but also to save money and natural resources. “We will continue to see an increasing need to capture sources of waste and reuse them to help meet the global demand for materials, reducing the impact of getting these materials in their raw state,” said Steve Eminton, an English journalist and editor of LetsRecycle.com site, a reference in Europe about studies on waste management and initiatives linked to the 3Rs. Author of the book Os Bilhões Jogados no Lixo (“The billions thrown in the trash”), the Brazilian economist Sabetai Calderoni debates the growing output of waste by society in Brazil and around the world (and the wasted wealth in incorrect disposal of these remains). “What society sees as ‘trash’ is actually the product of a mistaken approach to the materials” (read the interview on page 27). As a result, in addition to preventing waste generation, it is necessary for companies, governments and citizens to rethink the way they view these materials and the treatment given to them, seeking to preserve the environment and also getting the most out of these important resources.
Water: reuse’s prime target There’s practically no industrial activities that can dispense water – and its importance for sustaining life on Earth needs no comments. Disposing of wastewater (industrial term for all water whose natural characteristics are changed after domestic or industrial consumption) in nature is not only an environmental hazard, but also represents the loss of a key raw material. Smart solutions to minimize water usage and make its treatment (and its subsequent reuse) more efficient are worldwide priorities. An example of high technology applied to water reuse is the Groundwater Replenishment System (GWRS) developed by the public authorities at Orange County, California (USA). A three-step process – microfiltration,
reverse osmosis and application of ultraviolet radiation and hydrogen peroxide – purifies wastewater that would be discharged into the Pacific Ocean. The result is a water whose quality and purity even surpass the standards required by federal and state laws for drinking water. The system can meet the needs of about 600,000 people – the world’s largest water purification system for potable use. Rational use of water and the saving of this valuable resource is a priority for Petrobras. The Hydric Resources and Effluents Coordination at the company’s Safety, Environment, Energy Efficiency and Health (SMES) area is responsible for providing guidelines and tools that contribute to the rational use of water in all operations. Some of the company’s initiatives for the efficient management of the resource include projects such as the Guide for Assessment of Water Availability (that gives directions to operational units in the evaluation of water availability for its activities in the hydric basins where they are located); the Inventory of Water and Effluents (consolidating data about the volume and quality of collected water and the wastewater discarded by the installations); and the development at the Petrobras Research Center (Cenpes) of advanced
technologies for treatment and reuse of water. “By
2015 we will double the volume of water reused by the company, which in 2010 was 17 billion liters. Besides reducing the demand for fresh water for its operations, the savings from rationalization and reuse activities ensure a safe
source of water supply for Petrobras”, says Carlos Gonzalez, Petrobras’ coordinator of Hydrous Resources. Among the units that have reuse projects in course, Gonzales highlights the experiences at Cenpes and at the Vale do Paraíba Refinery (Revap, in the state of São Paulo); those initiatives will allow the reuse of hundreds of millions of liters of water per year.
GLOBAL CHALLENGE
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web and iPad_ learn more about the projects at www.petrobras.com/magazine and on the iPad edition
Comperj: one of the biggest water reuse projects in the world The Rio de Janeiro Petrochemical Complex (Comperj) is one of the major ventures in Petrobras’ history. It is scheduled to be fully operational by 2014 and will have the biggest project for water reuse in Brazil (and one of the biggest in the whole world): all the water used in its industrial processes will be supplied through reuse. Wastewater collected and treated at Rio de Janeiro will be transported to a storage station at the city of São Gonçalo through 17 km of submarine pipelines. From there, the water will be pumped to the Complex through more 32 km. At Comperj, the water will pass through new treatments and, after that, will be used in industrial processes. Next, most of the used water will receive another treatment to be reused again. The remainder will be treated and discarded according to environmental standards. The flow rate predicted for the project can reach 1,500 liters per second, the equivalent to the consumption of a city with 750,000 inhabitants.
From aluminum to gravel “Recycling” is a watchword when it comes to sustainable economy. It is now a global industry that joins individual initiatives, government programs and private companies investments. Reusing discarded materials and products in order to transform them into new products is a business strategy that generates economy, protects nature, saves natural resources, diminishes energy expense and reduces the accumulation of waste. “The production, processing and disposal of materials in our modern economy of disposal not only wastes resources, but also energy”, argues Lester Brown, founder of Earth Policy Institute and author of Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble. Aluminum cans, an universal symbol of recycling potential, are a fundamental part of Coca-Cola’s business. Not coincidentally, the beverage market giant is at the forefront of reutilization of materials in industrial processes. The British subsidiary of the company is a world example in waste management and recycling. In 2001, Coca-Cola has committed to reduce the amount of waste in its factories in the UK. By investing in recycling equipment and the sorting and separation of waste, besides keeping a continuous monitoring of its performance, the company managed to recycle 99.5% of its materials in 2010. Four of its plants (out of six) have already reduced to zero the sending of waste to landfills. “Investing in the preservation of nature also saves money,” confirms Lucia Toledo Camara Neder, an Environment consultant at Petrobras’ Exploration and Production (E&P) area. Among the company’s efforts regarding the control and disposal of waste is the careful separation of all materials to be discarded by the production units. The
offshore platforms, for example, generate scrap metal, old paint, chemicals, oily sludge (resulting from the separation process of oil) and plastic containers, among other types of waste. E&P’s Solid Waste Management Plan monitors and counts the amount of waste generated in each platform, and also determines the final destination of those residues.The sludge produced in the Campos Basin platforms, for example, goes to treatment units for waste oil and is used on cement furnaces. The scrap is auctioned and reused by the steel industry. “We are always investing in research on recycling alternatives for other types of waste. Currently we invest in research to reuse gravel, a waste generated at the drilling of wells, in order for it to be used in the ceramic industry (on porcelain-like floor tiles), and we are also researching the use of oily sludge as an asphalt component. And almost 100% of the residues of used lubricating oil can be used again, after being re-refined”, says Lucia. Petrobras’ Waste and Impacted Areas Coordination, under the SMES area, was established in 2001 and sets the guidelines for improving waste management, as well as encouraging the use of new and cleaner treatment technologies. It also brings together the efforts of monitoring and reuse of materials that are discarded by the company as a whole. The Waste Minimization Project, initiated in 2009, identifies the potential for reduction at the generation sources, evaluates actions regarding energy and environmental efficiency and tests new technologies for recovery and reuse. The methodology focuses primarily on identifying measures to prevent the generation of waste and, only after that, acting to reduce, reuse and recycle waste. “We view minimization as an end in itself, looking at the generation of waste, analyzing its potential and evaluating what types of residues are best suited to be used as raw materials,” explains Claudio Henrique Guimarães Dias, Petrobras’ coordinator of Waste and Impacted Areas. “Additionally, we take care of the materials generated from the company’s products, as well as observing our partners and suppliers’ waste management practices.”
Disposable stuff becomes energy
Energetic ice cream
All over the world, transforming waste into sources of energy is an integral part of the 3Rs policy. A survey of the International Solid Waste Association (ISWA), the agency that monitors the use and disposal of residues and wastes in the whole planet, points out that, in Europe alone, about 70 million tons of garbage are used each year for energy production, generating electricity and heating for 25 million people. “It is a procedure that prevents the production of greenhouse effect gases such as givemethane, emiting less carbon dioxide than fossil fuels”, explains Greek analyst Efstratios Kalogirou, researcher and member of ISWA. “Along with recycling, the transformation of waste into energy is the most efficient and integrated way to solve the problem of garbage accumulation in the big cities”, he maintains.
Unilever, the world’s largest ice cream
Petrobras develops various activities for conversion of waste into new sources of energy. The so-called residual oils and fats – especially used cooking oil that would have been discarded – are already successfully transformed on a raw material for the biodiesel produced at the
Reinjecting CO2 The search for ways to manage and reuse the waste is not restricted to solids and liquids. Petrobras commited not to release to the atmosphere any of the carbon dioxide produced in the operation of the pre-salt reserves. To do that, the company created a program to develop and implement technologies to enable the capture, transport, storage and use of CO2. One solution still under development is the reinjection of CO2 back in the oil wells.
manufacturer, announced the construction of a biodigester that can transform waste into energy. The apparatus will generate biogas from waste milk, cream, proteins, syrups and fruit pieces, supplying 40% of the energy demand at the factory where it will be installed, in the U.S.
company’s biofuel plants, an ongoing project in Bahia and Ceará. About 600 collectors, affiliated to cooperatives or associations at these regions, collect the oil (that is donated by the population in cities around the biofuel plants) and sell it to Petrobras, an activity that also generates income and new jobs. Another way to extract energy from waste is to use the shells of the castor oil plant seeds (one of the oil seeds used for the production of biodiesel) as a fuel. “The companies contracted to peel the castor oil plant seeds use their shells to supply the boilers of the peeling machines. It’s a virtuous cycle, in which something that would be a residue becomes an energy source”, explains Ricardo Prado Millen, coordinator of Agricultural Development at Petrobras Biofuel, one of Petrobras’ subsidiaries.
In the pre-salt, the testing began in 2011 on a pilot well at the area of Lula, in the Santos Basin. Besides ensuring that the produced CO2 will not be vented to the atmosphere, the alternate injection of gas and water may increase the pressure inside the well, enhancing the oil’s fluidity and therefore its recovery potential (by increasing the amount of oil that can be extracted from the well).
This symbiosis between agribusiness and energy production, through the reuse of waste, reaches a culmination at the German city of Könnern, where is located the second largest biomethane plant in the world. From the remains (skins, straw and other debris)
GLOBAL CHALLENGE
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of the corn crop collected on 30 farms in the vicinity of the plant, eight giant tanks produce, by fermentation, 30 million cubic meters of biogas, which yields 15 million cubic meters of biomethane. The gas is injected directly into the domestic supply network in Northern Germany. In addition to generating energy, this form of waste reuse produces fertilizers as a byproduct, just like in the biodiesel case. When the plant opened in 2009, a representative of the German Biogas Association, Andrea Horbelt, said that by 2020 one fifth of the German natural gas demand can be met by biogas produced from agricultural waste.
Cities, people, governments However, companies’ commitment to the reduction of the accumulation of waste and to give new uses for discarded materials is only part of the effort. Public authorities at national and city levels, along with society, need also to organize themselves and find ways to put into practice the ideals of the 3Rs. “There is no more time for us to wait for some big project that revolutionize São Paulo or any other major city. Local, informal initiatives need to be reinforced, in order to become models that can be replicated in various places. This is one possible way to solve the complex problems of urban centers”, said Natalia Garcia, creator of the project Cidades Para Pessoas (Cities for People), which researches urban planning ideas that can inspire Brazilian cities. Some “pilot cities” are ahead of the rest of the world when it comes to integrating reduction, recycling and reuse to their urban design projects. They are urban centers that were planned with an infrastructure that minimizes energy consumption and interference with the environment in which they are inserted. One of the most interesting cases is the International Business District (IBD) of Songdo, South Korea, which
3R in the forest At the Urucu Operations Base, at the Amazon, Petrobras maintains strict control of waste production and disposal. All organic waste (2.5 tons per day) passes through a composting process to be used as a fertilizer for reforestation and gardening. The recyclable materials (plastic, scrap metal, paper) go through screening and separation and are sent to specialized recycling industries. Hazardous waste such as sludge and oil are segregated from other materials, sent to Manaus and used in ovens for the cement industry.
will be complete in 2015. Songdo will have charging stations for electric cars, buildings that employ a large percentage of recycled building material and the use of desalinated sea water for irrigation. Also in the East and looking toward the future of urbanism is the Tianjin Eco-City, a collaborative project between China and Singapore that will create a city that, in the mid-2020s, will house 350,000 people. The Eco-Town should obtain a minimum of 50% of drinking water through reuse. A waste management system will maximize the potential for recycling; in addition, 90% of traffic in urban areas should be “green” (public transport, cycling, walking), reducing pollution and fuel consumption. Other cities, already inhabited, overcome the everyday challenges related to waste. Calgary (Canada) was considered in 2010 the “greenest” city in the world by a global survey conducted by Mercer, an English research institute – especially for its waste removal services and its wastewater treatment. Arcosanti, an experimental city in the United States, presents the idea of “arcology” – a blend of architecture and ecology. The buildings are made from minerals found in the region, in integration with the geological panorama. The buildings are made to make the most of the sun as a
light source; greenhouses in which plants are raised may also be used to retain warmth for heating during the winter. All of this guarantees a minimum level of interference in the natural landscape. In Brazil, among the examples of sustainable cities stand out Curitiba, at the state of Paraná (the city was awarded in 2010 by Globe Sustainable City Award for its concern with environmental education) and Porto Alegre, at state of Rio Grande do Sul (which shows a high efficiency in waste collection and recycling and at the water treatment). However, there is still a lot to be done. Each year, the country produces 61 million tons of garbage, and, according to
Beyond biodiesel The glycerin resulting from the production of biodiesel was initially sold to small customers, such as soap and cleaning products factories. Now it is exported mainly to China, where it is used in cosmetics, paints and coatings. The product is also used in an ecological way in the industry as a dust suppressant, and Petrobras is studying its use in oil exploration and production. “Today there is already a big market for glycerin and we are studying ways to reuse it as a fuel and animal feed,” explains
There is no more time for us to wait for some BIG PROJECT that revolutionize São Paulo or any other major city” NATÁLIA GARCIA, PROJECT CIDADES PARA PESSOAS (CITIES FOR PEOPLE)
a recent research by Brazilian Association of Public Cleansing, only 1.4% of that total is recycled. This situation should change with the recent establishment of the National Solid Waste Policy, regulated by the law number 12,305 in 2010. The law stipulates that the federal government must develop a National Plan for Solid Waste and requires the extinction, by 2014, of all of the garbage dumps (to be replaced by controlled landfills) and the obligatory separation of organic waste (sent for composting) and recyclable material. It also defines the responsibility for the lifecycle of products – from production at the factory until the disposal by the final consumer – shall be shared amongst manufacturers, importers, traders, consumers and public services in urban sanitation. “The Plan will establish the concept of reverse logistics, requiring that manufacturers create a system to recycle the packaging of their products”, explains sociologist Elisabeth Greenberg, executive coordinator of the Polis Institute, who participated in the hearings that resulted in the document’s final draft.
Aline Costa de Andrade, coordinator of Product Quality at Petrobras Biofuel. Sludge and fatty acid, products of the biodiesel industry, are also sold to soap factories. And the residues from the processing of castor oil seeds (the so-called “pie”, a grainy paste with a small amount of oil) are used as fertilizers.
To give new destinations to what is discarded, viewing opportunities to extract value from these materials: that is the challenge. The collaboration between companies, governments and citizens and the increasing awareness about the need for efficient management of waste is creating a scenario in which progress is not necessarily synonymous with more trash – but of a virtuous cycle of raw materials reuse and generation of wealth.
GLOBAL CHALLENGE
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_Sabetai Calderoni Author of more than 20 research papers in the environmental area, coordinator of public plans for
GLOBAL CHALLENGE
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recycling and waste collection in Brazil and emissary of the United Nations in sustainability projects in Asia, Africa and Europe, Brazilian Sabetai Calderoni says there is still much to do in the economic reuse of waste. But he is optimistic. “We are going through a quiet revolution”, he believes. How do you assess the changes in companies’ attitudes towards
Companies need to realize that, yes, IT IS
POSSIBLE TO PROFIT FROM WASTE”
waste since 1996, when you released the book The Billions
Thrown in the Trash? The economic potential of recycling and reuse is still largely unexplored. But among companies and citizens, there was a great awakening on the
companies show good results. In the
issue. Companies need to realize
energy sector, there is a positive
that, yes, it is possible to profit from
trend for the implementation of
waste. Recycling prevents mining
compensatory measures, since
and exploration expenditures,
it is not possible to effectively
generates energy savings and
have a zero waste production.
reduces expenses with water, transportation and environmental
How can consumers and
control. In Brazil, I believe we will
companies work together to
see a huge change in the scenario, in
make better use of waste?
view of major events (World Cup and
Reverse logistics is an interesting way.
Olympic Games) that we will host.
In Germany, automobile factories commit to receive old cars from the consumers, when they come to
are at forefront of the
exchange them for a newer model.
implementation of the 3Rs?
The cars are dismantled and recycled
The packaging industry – plastic
and the cost of operation is divided
or metal – is the highlight. But it is
between the automaker and the
also the segment that suffers the
driver. It is also a solution to household
greatest pressure from society.
appliances: when you buy a new TV,
The chemistry and petrochemistry
take your old model and return it.
Photo: Bruno Thomaz
What industry branches
_Luis Szarรกn A Paraguayan maestro whose musical training was enhanced in studies in Rome (Italy) and Buenos Aires (Argentina), Luis Szarรกn is, since 1990, the director of the Symphony Orchestra of the City of Asunciรณn. In 2002, he started the project Sonidos
de la Tierra (Sounds of the Land), which brings music education programs to 72 poor communities in Paraguay and includes the production of instruments made of recycled material. The project was given in 2005 an award by the Skoll Foundation (United States) and is sponsored by Petrobras.
video_ watch a special video about the project Sonidos de la Tierra on www.petrobras.com/magazine and on the iPad
A SCHOOL OF LIFE
BY LUIS SZARÁN
...from a plastic bag, he takes a sort of violin, MADE WITH THE REMAINS OF AN OLD POT, a fork, wood and four strings. Gradually, we realized that melodies could come out from that piece of tin, and that A CHILD COULD LEARN, WITH GREAT DIGNITY, his or her first lessons... In a small room, there is an orchestra formed by the children of gancheros – people who work at a landfill in Cateura, a place where all the garbage produced in the Paraguayan capital, Asunción, and in the surrounding areas, is deposited. Meanwhile, in an adjoining room, the parents of the students who form the orchestra are reunited to evaluate the work and demonstrate how much they could gather to contribute to the project. These people work at the landfill, revolving the waste to try and find anything that might be used, sold or recycled. Since the results of the collection don’t seem to rise any high hopes, Don Colá, a skilled carpenter who earns his living from the stuff others throw away, approaches the table. From a plastic bag, he takes a sort of violin, made with the remains of an old pot, a fork, wood and four strings. “This is all we can contribute to at the moment, and we want to know if it works”, he says. Gradually, we realized that melodies could come out from that piece of tin, and that a child could learn, with great dignity, his or her first lessons. Don Colá gave us a valuable lesson: if we have the will to overcome and to look ahead, even from garbage it’s possible to build the tools for a positive change in our own destiny. The idea of Don Colá became a full orchestra of recycled instruments that travels the world, showing that everything is possible. It is a matter of attitude. The “progress of a population” is not measured by the results of one country’s gross domestic product, or by the number of hospital beds, or by the amount of traffic lights in the streets. The progress of a nation is measured by the level of happiness of its people. The joy of music, the elimination of competition and the building of trust bonds between the rich and the poor, the young and the old, the native
indigenous and the white people – together, it all generates this miracle of human communion. Without giving sermons or speeches on standards of living, environmental protection, or personal and social care, the orchestra – that school of life – stimulates the formation of human values and the creation of spirits who search perfection, rejecting mediocrity. The fundamental question that arises from the need to care about the future of humanity is: how to find the magic formula? How can we activate the “button”, the “click” that will bring back intelligence and the good will towards ourselves and the others. Not only to seek the formation of good musicians and artistic geniuses, but also to find, through music, the profile of a new citizen: one that is honest, creative, idealistic, participative, respectful and committed. Every day, Jorge Guzman, a young man living in the small town of Mbuyapey (187 km south of Asunción) rises at dawn to milk cows. He saddles his horse; at one side, he hangs a barrel full of milk and at the other, his cello. After he finishes delivering the milk, he arrives at his village’s music school. He takes a bath, puts on his uniform and starts studying the Bach suites. His participation in an orchestral group, being subject to standards of conduct and interaction and planned activities, helps to improve his musical learning and, above all, understanding his position in society as an active member of the community. And it helps him to pass on to his family concepts such as a greater responsibility concerning the handling of milk, the relationship with his customers and his family’s financial planning. Guzman, now an admired and virtuoso musician, thinks about the children who are fed with the milk that he distributes and encourages them not to leave school. And to have hope, to empower themselves and to work for a better and more dignified future.
IN DISCUSSION
THE ORCHESTRA,
ILLUSTRATION LUIZ CORREA
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BY VINICIUS MEDEIROS // PHOTOS STEFAN HESS
NEGÓCIO BUSINESS
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ethanol a leap to the future
With HUGE INVESTMENTS, Petrobras plans a sizeable growth in its share of the BIOFUEL MARKET
the domestic market in 2015 and, consequently, taking the leadership of the Brazilian market.
ommanding a mechanic harvester through a sugarcane field, Edson Aparecido Ferreira has only one companion: the country music coming from his radio. At the Cruz Alta sugarcane processing plant, located in Olimpia, in the state of São Paulo, the harvest ended in November 2011. The work, however, never ceases. In the field, projections about the next harvest are already being made and a battalion of machines and workers is preparing the 295,000 hectares of sugarcane fields surrounding the plant – the equivalent to twice the size of Mexico City. The cycle, then, begins anew. Ferreira has been working in Cruz Alta (one of the nine ethanol plants in Brazil in which Petrobras has a stake) for four years. And he helps to move, along with other important players, a productive chain that is profitable, cleaner, sustainable, and, above all, prosperous. The Brazilian ethanol market is agitated. In the last few years, large companies from the energy and the food industries started to invest in the sector. Petrobras took a decisive step in this direction four years ago with the creation of the subsidiary Petrobras Biocombustível (Petrobras Biofuel). The company’s Business Plan 2011-2015 predicts an investment of US$ 1.9 billion in expanding production of ethanol, with the construction of new mills and distilleries, the increase in milling capacity and renewal of plantations. Another US$ 1.3 billion will be invested in logistics and further US$ 300 million will be used in research and development of new technologies. The aim is to expand Petrobras’ production capacity (alongside with its partners) from the current 1 billion to 5.6 billion liters, reaching a 12% share in
Petrobras acts in the ethanol segment since the 1970’s, at first participating in the Pró-Álcool (Pro-Alchool, Brazil’s federal government program to stimulate the use of ethanol as a fuel). The company began to invest more heavily in biofuel production in 2009 by acquiring 43.58% of Total Agroindústria Canavieira, a company which owns a sugarcane plant in Bambuí (state of Minas Gerais). The following year, Petrobras closed a new partnership, this time with the French group Tereos, acquiring 45.7% of Guarani company. With seven manufacturing plants in Brazil, all located in the state of São Paulo, and one in Mozambique, Africa, Guarani is the third largest processor of sugarcane in Brazil. Finally, also in 2010, Petrobras signed an agreement with the São Martinho group, forming the Nova Fronteira Bioenergia company, which controls the Boa Vista plant in Quirinópolis (state of Goiás). Along with these partners, two initiatives stand out: the expansion of the Boa Vista plant, which upon receiving investments of US$ 293.7 million until 2015, will increase its production capacity from 200 million to 700 million liters of ethanol;
Planting areas A decree approved in September 2009 by Brazil’s presidency created the Agro-Ecological Sugarcane Zoning (ZAE Cana), regulating the sustainable production of sugarcane in Brazil and indicating the most suitable regions for plantation. Nature preservation and the minimization of deforestation are among the priorities of ZAE Cana, which defines the areas where is possible to expand the planting of sugarcane for ethanol production without the use of irrigation.
and the expansion of ethanol production and energy cogeneration in the Guarani production units, with investments over US$ 423.7 million made in the next three years. “(Going to) the market for renewable energy is a natural path. Choosing ethanol seemed to be the most logical option, since it allowed us to work with liquid fuels, a field in which we have great expertise. Three pillars guided our investments: energy security, environmental issues – the reduction of greenhouse gas emissions – and social issues, generating new jobs and more income”, explains Ricardo Castello Branco, Petrobras Biocombustível’s ethanol director. “Boa Vista’s expansion will make it the largest sugarcane ethanol plant in the world. Besides that, we will double the annual production of Total’s unit in Minas Gerais. The investments made in the three partners of Petrobras Biocombustível will enable us to achieve, by 2015, a 12% share of the Brazilian ethanol market”, he adds.
Filtration equipment at the Cruz Alta ethanol plant: part of a chain that produces a fuel that is efficient, cleaner and sustainable
Brazil is the world’s largest producer of sugarcane ethanol. According to Unica (Brazil’s national union of sugarcane producers), 20.5 billion liters of fuel were produced in the country in the 2011-2012 harvest. Almost the entire production was directed to the domestic market. Meeting the needs of the Brazilians is the natural way for local businesses, but the export potential of sugarcane ethanol is indisputable. “Brazil’s market has become very attractive for investments because
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INFOGRÁFICO
of the pent-up demand and the growing fleet of flex-fuel vehicles. Ethanol is efficient and less polluting. It’s only a matter of time for it to become a widespread global commodity”, says Andy Duff, global specialist on sugar at Rabobank’s department of Research and Sector Analysis. Headquartered in the Netherlands, Rabobank is the world’s leading institution on financing and investment on segments related to sustainability and agribusiness.
Past, present and future
An interesting perspective for Brazilian ethanol was opened in late 2011 when the U.S. Congress repealed the tax imposed on the biofuel from Brazil and suspended the subsidy to local producers. United States are the world’s largest producer of corn ethanol. The decision can still be changed, but it signals a positive prognosis for Brazilian exports. “When sugarcane ethanol was recognized as an advanced biofuel, it won a passport to travel the world”, said Marcos Jank, president of Unica, referring to the announcement by the U.S. Environmental Protection Agency in February 2010. According to the agency, the sugarcane fuel reduces in more than 60% the emissions of greenhouse gases in its total life cycle when compared
The sugarcane industry’s roots go back to the beginning of colonization in Brazil. The favorable climate and the vast availability of land contributed to make sugarcane culture the foundation of the country’s economy during the so-called sugarcane cycle, begining at the 16th century. Ethanol from sugarcane began to gain importance as a fuel in the late 1920’s, when it was mixed with gasoline. It began to be regarded as an alternative to petroleum derivatives during the 1973 world supply crisis. The launch of Pró-Álcool (National Alcohol Programme) in the late 1970s marked the beginning of an energy program based on ethanol. By 1989, government incentives had helped to build a fleet of about 4 million vehicles that ran on ethanol (a third of the total Brazilian fleet at the time). On the path to become a global commodity, the
to gasoline. That is enough for it to be considered an “advanced biofuel”. “It is time for Brazil and the United States, which together account for more than 80% of ethanol produced worldwide, show their leadership and work to create a true global market, comparable to the oil market,” adds the executive.
development of the so-called cellulosic (or second-generation) ethanol will be crucial. The main benefit will be to increase the amount of ethanol produced without expanding the raw material planting fields. The strategy to get there includes the use of waste, such as sugarcane bagasse. While in the United States the research is focused on corn waste, Brazil bets on second-generation ethanol are concentrated in bagasse and straw, cellulose sources that account for two thirds of the plant’s energy potential. “Petrobras started its studies in 2004. The main advantage of the bagasse is logistics. As it is a byproduct of sugarcane that is already available at the plant, there is no need for deployment of infrastructure for collection and transportation” explains Juliana Vaz Bevilaqua, coordinator of the Technology Management at Petrobras Biocombustível. “Today, a very good plantation produces 8,000 liters of ethanol per hectare. With second-generation ethanol, the goal is to increase production by 40% without additional planting”, adds Castello. Today, the bagasse and
straw are used to generate steam and electricity in power plants, making the units self-sufficient in energy. Some plants also export excess energy to the national grid. To accelerate the research for the production of second-generation ethanol, Petrobras firmed a partnership with U.S. company KL Energy Corporation (KLE), which was already testing cellulosic ethanol made out of wood. Petrobras invested US$ 11 million in 2011 in order to adapt to the KLE plant in Upton (USA) to use bagasse as a raw material and to validate, through testing, the production of cellulosic ethanol. Moreover, Petrobras and KLE will develop a project for a industrial scale second-generation ethanol plant that will be fully integrated into a sugarcane plant belonging to Petrobras in Brazil. The plant should be ready to operate in 2015. Technological progress will allow the use of sugarcane as a raw material for new products in various areas of industry. André Bello de Oliveira, manager of Technical Support in
Sugarcane harvested at Cruz Alta: 295,000 hectares of planted fields around the ethanol plant
Ethanol at Petrobras Biocombustível, faces the prospect with optimism and predicts that sugarcane will follow a path similar to that of oil. “In the past, petroleum was processed to replace whale oil in the production of kerosene. Whatever was left would become waste. Now, more complex refining allows to take advantage of it all. What were the sugarcane mills in the past? Factories with human labor and animal traction making sugar. With the Pró-Álcool program, we began to produce ethanol. Today, it is possible to obtain various types of sugars and alcohols, as well as fertilizers, different types of proteins and even lysine and acids in general from sugarcane”, he says. For the future, the prospects are even wider, with the emergence of biorefineries – units capable of producing fuels, polymers and chemicals from biomass, through procedures similar to those used in oil refineries – allowing a greater utilization of sugarcane and its waste, in a diverse and integral way.
INFOGRAPHIC JACK HAGLEY
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Advanced urban solutions for a nation with centuries of history
singa
pore Featured among the Asian Tigers, the city-state has one of the BUSIEST PORTS IN THE WORLD and a vibrant financial market, besides giving examples of
INNOVATION IN SUSTAINABLE URBAN PLANNING
BY VINICIUS MEDEIROS // PHOTOS THINKSTOCK / PETROBRAS IMAGE BANK
AROUND THE WORLD
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pon arriving in Singapore, newcomers often get perplexed. Modern skyscrapers, wide boulevards, a large industrial complex, one of the busiest and most strategic ports in the world, a major global financial center. Yes, at this rich, cosmopolitan and innovative Asian city-state, practically everything is superlative. For the local government, however, that is not enough. They are obsessed with seeking the new. And, regarding the initiatives related to sustainability, Singapore is an example for many cities around the world. Member of the group of nations known as the Asian Tigers, along with Taiwan, Hong Kong and South Korea, the small insular city-state bases its economy on three pillars – manufacturing, financial services and port activities – which include complementary segments such as shipbuilding, insurance and international legal arbitration, among others. It is no exaggeration to say that Singapore developed itself around the port activity. Even before the Middle Ages, the local port already had an important role in Southeast Asia; the city opened to the West with the arrival of the British East India Company in 1819, a process that was intensified with the construction of the Suez Canal (Egypt) in 1869.
“Because the British steamships of the time had no autonomy to advance to the Far East, Singapore has established itself as a trading post and became a port for maintenance and replenishment of coal (for the ships’ boilers). The shipbuilding industry of the city-state was born at that time”, explains Derek Heng, a professor of Southeast Asian History at Ohio State University, USA, born in Singapore and author of Continuities and Changes: Singapore to the Port-City over 700 years. Nowadays, the marine industry employs over 170,000 people and contributes with 7% to the local Gross Domestic Product (GDP). The port of Singapore is connected with more than 600 ports in more than 120 countries. Only in 2011, according to the Maritime Authority of Singapore (MDS), the handling of containers at the terminal rose 5.3%, to 29.9 million TEUs (20-foot
container), surpassing the 2008 prior record. Sales of bunker (ship fuel) rose 5.6%, to 43.2 million tons. It’s no wonder that the naval sector is one of the highlights in the city-state economy, along with the oil sector, according to Heng. “Local companies such as Keppel and Sembawang are world leaders in construction of offshore platforms,” he says. “In addition, Singapore has an extensive chain of oil and gas companies, ranging from pipeline manufacturers to petrochemical corporations,” he concludes. Petrobras has been present in Singapore since 2001, giving local support to the company’s commercial activities in Asia (except for China, which falls under the jurisdiction of the local representative office). From Singapore, Petrobras exports fuel oils in general for Asian companies in the sectors of energy, automotive and mining, among others, besides being the largest supplier of bunker with low sulfur content for ships moving around the Singaporean port. “Petrobras performs other important operations in Singapore, such as exporting oil to India and selling ethanol to countries such as Indonesia and Malaysia, in addition to buying oil derivatives and bringing them to
Brazil”, explains José Brandão Raimundo Pereira, executive manager of Marketing and Sales for Petrobras. “Singapore is a referential market. Petrobras could not be absent from that important commercial and financial trading post. The world’s largest supplying port is located there. In addition, the local shipyards have expertise in converting ship hulls for use in platforms, a service that has already been contracted by Petrobras a few times”, he adds.
A model of sustainable development Singapore is also recognized for its initiatives in the area of sustainability. The local government plans to invest US$ 1 billion in sustainable development programs in the next five years. The actions range from policies to encourage the construction of green buildings to projects concerning water reuse, waste collection and recycling.
Chong’s speech remarks the zeal with which Singapore deals with issues related to sustainability. BCA, for example, released US$ 20 million to encourage adoption of sustainable practices by construction companies between 2006 and 2008. In 2009, a new program was released (this time to adapt old building) with a budget of US$ 100 million. “We have developed a comprehensive set of actions that necessarily involves the creation of the Green Building Masterplan (guide sustainability standards) and the concession of the BCA Green Mark Award (certificate awarded to approved projects)”, says Chong. According to the executive, the number of “green” buildings in Singapore went from 17 to over 940 since 2005. “This translates into more than 28 million square meters of building area in accordance with standards of energy efficiency, water reuse and environmental protection. The certificate was also required by 140 buildings in China, Malaysia, India and Saudi Arabia, among other countries”, he adds.
“We are a small city-state with limited power sources. It is imperative to ensure that energy consumption is well managed, to make sure that the new buildings remain sustainable for future generations” says Tan Tian Chong, director of Technology Development of Building and Construction Authority (BCA), the agency that regulates the construction of “green” buildings.
The port: a source of wealth as a trading post and a base for an advanced offshore industry
The coexistence between people from various nationalities is a mark of the local society
There are also major projects in energy efficiency and water treatment. In the first case, the National Environmental Agency (NEA) launched in November 2008 the program Grant for Energy Efficient Technologies (Greet), which aims to encourage local industries to invest in technologies to reduce energy consumption. To convince companies to join the program – mainly at the pharmaceutical, chemical, electronics and shipbuilding sectors – Greet employed the same strategy used by the BCA: easy credit. Today, the initiative will fund up to 50% (limited to US$ 2 million per project) of the compliance costs, including purchase of equipment, qualification of manpower and technical assistance. Since 2008, more than US$ 10 million in grants have been approved, for 16 companies. According to the NEA, the economy of these corporations in energy costs can reach US$ 350 million by the end of the life cycle of the funded projects. The reduction of carbon emissions would total 1,200 kiloton. In Singapore, the awareness of the importance of treatment and reuse of water is nothing new. George Madhavan, director of the Public Utilities Board (PUB), the national water agency, reports: “Over the past 40 years, through strategic planning and investment in research and technology, PUB has built a solid and diversified water supply model known as the Four National Taps”. The pillars consist of investments in four key areas: water extraction, importing water, purification of reclaimed water (NEWater project), and water desalination. Undeniably sucessful, NEWater envisages the production of ultrapure
A world-class exemple on 3Rs The Singapore Packaging Agreement (SPA) is an agreement covering voluntary recycling and reduction of the volume of waste. It is an example for the world largest cities. Based on the concept of 3Rs (reduce, reuse, recycle), the SPA has been signed by 128 companies. According to the National Environment Agency (NEA), a government organization that leads activities related to sustainability (including the SPA), the participants have processed 7.100 tons of industrial waste (data compiled by the end of 2011) since the signing of the agreement in 2007, which represents an estimated saving of US$ 15 million.
Singapore
potable water through purification of treated waters. This modern treatment process uses membranes and ultraviolet disinfection. According to PUB, the four NEWater plants can supply 30% of water demand in Singapore. Another initiative is based on high technology water desalination. Singapore has one of the largest desalination plants in Asia, capable of producing 30 million liters per day, which represents about 10% of the necessity of the city-state. A second unit, with capacity to produce 70 million liters per day, will be ready in 2013. “Without aquifers (geological formations that store groundwater) or natural abundance of land, Singapore has recognized that having a sustainable water supply was vital since the 1960s,� says George Madhavan, strengthening the avant-garde position that Singapore keeps since then.
Economic strength With a strong economy, high levels of industrialization and outstanding socioeconomic indicators, Singapore gained worldwide reputation in the early 1980s, when it began to show significant annual growth rates of its Gross Domestic Product (GDP) thanks to a daring plan of social and economic reforms that created jobs and attracted businesses and investments around the world. Since then, the average annual increase of GDP has been 6.32%, according to the International Monetary Fund. The city-state also distinguish itself in attracting foreign direct investment (FDI) by having one of the lowest tax systems in the world. In 2010, Singapore attracted US$ 39 billion in FDI, being one of the 10 countries that received the largest volume of funds that year, according to the United Nations Conference on Trade and Development (UNCTAD), an organ linked to the United Nations (UN).
change of
COURSE The increase in ENERGY CONSUMPTION on emerging economies and the REDUCED DEMAND on developed countries, coupled with the rise of new producing regions, alter the FLOW of the WORLD OIL COMMERCE everaging the world economy is a task that demands a lot of fuel. And those who step on the gas need to refill their tanks more often. While the old “engines” – USA, Japan, Europe – ing down, newer driving forces are slowing rics and other developing – the Brics countriess – gain momentum and nergy’s glob obal al ggeopoli liti tics. Th The change energy’s global geopolitics. il ttrade is changing, direction of the oil a for those who both for those who buy and consume and w context, Brazil – a produce and offer the fuel. In this new ion – prep epar ares to consolidate country in economic expansion prepares by-products. itself as a major exporter of oil and its by
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The developed countries – that historically have been the biggest consumers of oil in the world – have not been registering significant growth in their demand of fuel. A recent survey by the U.S. Energy Information Administration (EIA) shows that, between 2010 and 2011, oil demand among the members of the Organization for Economic Cooperation and Development (OECD) fell 0.91% (from 46.1 million barrels day to 45.68 million). The forecast for 2012 is
Brics Created by Goldman Sachs economist Jim O’Neill, the acronym BRICS (initially comprising Brazil, Russia, India and China and now also South Africa) refers to a group of developing countries that show an accelerated rate of economic growth.
fo another for anot othe her fa fall ll to t 45.65 45.6 45 .65 5 mi million barrels. barrel Until 2035, this demand will be reduced by 4. 4.6% in th the European Union, and will rise only 4.9% in developed dev eveloped cou countries. Moreover, since the 1990s, con onsumpti in developing consumption countries has tripled in comparison compa parison with wi developed nati tions, due d to t the th expansion of economic econo nations, activities, which increased energy consumption. According to EIA, consumption in emerging markets rose 2.76% in the last two years and is expected to attain a new high for 2012 (from 42.45 million barrels per day to 43.87 million). Another study released by the OECD estimates that developing countries will account for 68% of the total increase in oil demand by 2020. Until 2035, EIA’s projections indicate that the fuel demand in these countries will grow by 63.9%.
OECD
In short, the growing economies – particularly in the Bric countries – will dictate the increase in worldwide oil consumption. Matthew Parry, an analyst of demand in the oil industry at the Marketing Division of the International Energy Agency (IEA) says that the change gained momentum from 2004, when the Gross Domestic Product (GDP) in emerging markets reached a high level after consecutive increases in annual growth rates. “While the growth of developing countries became more permanent, the rates at the developed economies began to stagnate and even to retreat,” he says.
production in some regions, along with the increased supply from others, are also changing the global flows of the oil trade. Projections by the Organization of Petroleum Exporting Countries (OPEC) and by the U.S. Department of Energy indicate that the decline in conventional oil supply in Europe, in Asian countries bordering the Pacific Ocean and in North America will be partially offset by growth in exploration and production in deep waters in Russia and Brazil. In the European country, the production of large reserves of the Caspian Sea should begin in 2014. Brazil, on the other hand, will consume more oil, produce an even greater volume and be strenghthened as an important supplier of oil and oil products, mainly due to oil extracted from the pre-salt layer.
Besides the diminishing demand in developed countries and the increasing consumption in developing countries, the drop in the oil
Alfredo Laufer, a consultant at the Brazilian Institute of Oil, Gas and Biofuels (IBP), analyzes the evolution of Brazil’s role within the
The Organization for Economic Cooperation and Development (OECD) acts on international and intragovernmental levels and reunites 34 countries, including high-income (such as Australia, Japan and countries in North America and Europe) and middle-income (such as Chile, Mexico, Poland and Turkey) economies.
global energy context: “Until 1950, Brazil imported a lot of oil. As of the Six-Day War (1967), with the intensification of conflicts in the Middle East, there was an increase in oil prices and the Brazilian government started to seek reserves at the sea. The technologies have developed and in 2006 the Pre-Salt Pole was discovered”, he explains. In the light of the new discoveries, Petrobras expects that the volume of oil and natural gas found in the pole will double the Brazilian reserves, now estimated
BY FRANCISCO BARBOSA // INFOGRAPHICS AND ILLUSTRATION THOMAS SPRENGERS
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at 16.4 billion barrels of oil equivalent (boe), according to criteria of the Society of Petroleum Engineers (SPE). Due to increased production, it is expected that the growth in Latin America will be driven by the Brazilian reserves. The latest World Oil Outlook report, released by OPEC in 2011, envisions a 51% increase in production in the region (4.7 million bpd to 7.1 million) by 2035. The same period will be marked by a sharp decline in supply from Asia, Africa and nonOPEC Middle East countries. The document also points out: “Mainly because of Brazil, Latin American countries will be the biggest suppliers of oil among all developing countries, excluding the OPEC members.”
From price taker to price maker Today, Petrobras trading teams activities include the importing of oil and oil products (such as diesel, LPG and naphtha) for the Brazilian market and the exporting of Brazilian oil and derivatives to other countries. While the full potential of the Pre-Salt Pole is not being explored, the company continues to carry out systemic trading – buying the needed products and selling the surplus – and the complementary trading – which takes advantage of good opportunities to buy and sell products abroad, adding value to operations. Besides that, Petrobras does the supplying, storing and mixing of products and operates
in the wholesale and reselling markets. According to the executive manager of Marketing and Sales Officer, José Raimundo Pereira Brandão, the goal is to overcome the dependence of the external market and elevate the company from the position of price taker to the position of price maker. Brazil’s current oil consumption is greater than the amount of products generated by the country’s refineries. With the increase in oil production estimated by Petrobras, the forecast is that by 2020 the situation will be reversed, with the demand being lower than the processed volume. This will enable Petrobras to export high-value products, instead of crude oil essentially. “Initially, Petrobras’ trading consisted basically in importing oil derivatives to supply the Brazilian market,” says Pereira Brandão. “With the building of refineries between 1950 and 1970, the company began to buy oil from abroad to be refined in Brazil. Later, the light oil acquired abroad was mixed with the heavy oil produced in Brazil, since our refineries were designed to only handle light oils. Since then, lighter oil have been found in Brazil and the Brazilian refineries were adapted to process heavy crude as well”, he says. “Now, mainly due to the pre-salt, Petrobras will more than double its daily production capacity of oil by 2020,
Sources: U.S. Energy Information Agency (EIA), the Organization of Petroleum Exporting Countries (OPEC), World Energy Council (WEC), Organization for Economic Cooperation and Development (OECD) * OECD Countries: Germany, Australia, Austria, Belgium, Canada, South Korea, Chile, Denmark, Slovakia, Slovenia, Spain, United States, Estonia, Finland, France, Greece, Hungary, Iceland, Ireland, Israel, Italy , Japan, Luxembourg, Mexico, Norway, New Zealand, Netherlands, Poland, Portugal, Czech Republic, UK, Sweden, Switzerland, Turkey ** OPEC members: Saudi Arabia, Algeria, Angola, Qatar, United Arab Emirates, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Venezuela *** Other developing markets outside the OECD: Egypt, Indonesia, Argentina, Colombia, Ecuador, Malaysia, Thailand, Philippines
**** The EIA estimate is different from Petrobras’ prediction; the company plans to produce 4.9 million barrels of oil per day in Brazil in 2020
Petrobras’ Trading - the company deals with: more than 30 types of Brazilian petroleum; more than 100 types of imported oil; 216 final products; 39 import fronts; 26 export fronts; 92 processing units (15 refineries); 48 terminals; 7,179 Km of oil pipelines and 7,327 Km of gas pipelines; 56 ships; around 20 consuming regions.
when it will be producing nearly 5 million barrels of oil per day (bpd) in Brazil. In this context, the company will reduce imports and increase the participation of the Brazilian oil on its trading operations”, says Pereira. “To handle the increase of the produced volume, the Company has begun operating the Clara Camarão Refinery in 2009 and it will invest in four more medium or large units. Together, these refineries will add 1.3 million bpd to the volume refined in Brazil until 2020. There will be a reduction in the import of derivatives and, consequently, also in the freight costs”, he adds. If in 2010 Petrobras exported a daily average of 698,000 barrels
Petrobras trading around the world Petrobras’ trading activities are held throughout the world by the Petrobras System companies headquartered in Brazil, UK, USA, Singapore and the Netherlands; by a joint venture located in Japan; and by traders located in Argentina. Depending on the type of product, the work may be global or focused on target markets, where the company can act alone or in association with partners.
of oil equivalent (including crude oil, derivatives and ethanol), the projection for 2020 is an increase of 231.4% in sales abroad. That means 1.65 million barrels of crude oil per day, 636,000 barrels of derivatives and 26,000 barrels of ethanol. Currently, Petrobras’ main export destinations are the USA and China. Shipments to India have also grown significantly in recent years. In 2020, after having supplied the needs of Brazil’s expanding
domestic market, Petrobras plans to export its surplus of derivatives mainly to the USA, Northwest Europe and other countries in the Mediterranean region of that continent. The company also intends to provide ethanol to the U.S., Japan and Europe. These movements strengthen the position of Petrobras in the unfolding scenario, reflecting Brazil’s growing importance as an exporter and consumer in this new world order.
The union between COMPANIES AND RESEARCH INSTITUTIONS helps society to better understand the richness and BIODIVERSITY of different ECOSYSTEMS
Photo: AndrĂŠ Motta de Souza / Petrobras Image Bank
he richness, the diversity and the extent of the Amazon Forest impress mankind. It’s a sensation that grows stronger as we enter the heart of the jungle towards Petrobras’ Operations Base Pedro de Moura, in the region of Urucu. Located 650 km from Manaus, capital of Amazonas state, Urucu is home to a pioneering initiative in study and environmental conservation conducted by company’s employees in partnership with local researchers coming mainly from the Emilio Goeldi Research Museum (MPEG), the National Institute for Amazonian Research (Inpa) and the Federal University of Pará (UFPA). The environmental mapping includes the collection and study of specimens of wild fauna and flora and the organization of the obtained information. In addition to the strengthening of the relationship between Petrobras and the local population, the initiative leaves a legacy of knowledge about nature. This and other collaborative projects between companies and research institutions have helped society to understand better – and to preserve better – the richness and the biodiversity of such distinct regions as the Atlantic Forest, the Brazilian seacoast and the Strait of Magellan (Chile). Petrobras contributes to the preservation of two areas where it maintains operations by studying the biodiversity and developing
SUÇUABOIA Medium-sized snake which skin color ranges from yellow to orange. They live in forests and can be found in wound branches
Photo: M.C. dos Santos-Costa
T
actions that go beyond the legal requirements determined by the Brazilian Institute of Environment (Ibama). In the Amazon, with the support of contracted native people (that guided the researchers through the trails around Urucu), the company has mapped and cataloged more than 200,000 plant species, many of which are preserved in the nursery at the base. The Mamíferos e Quelônios Marinhos (Marine Mammals and Turtles) project, also conducted by the company, covered the entire Brazilian coast. Between 2004 and 2006, several species of marine fauna were listed, with the technical support of the Baleia Jubarte Institute and the Tamar Institute, both non-governmental organizations sponsored by Petrobras. The work resulted in the registration of over 150 points of confirmed occurrence of those species on the coast. The data from the mapping work performed at the Amazon and the Brazilian coast was subsequently reunited on the internet on the Projeto Biomapas (Biomaps Project), which presents the mapped species using georeferencing tools, videos and photos.
Jonas Moreira works in Urucu since 2000. He was one of the trackers who accompanied the research. Besides opening tracks, Jonas also collected seeds, helped to organize the inventory of the plants nursery and pointed out local names of plants and animals. “It was important to know whether the animals found here can also be spotted in other regions of the Amazon”, says Jonas. Born and raised in the region, the tracker had his curiosity aroused by contact with the scientists. “Gradually, I learned the scientific
In Brazil there are several partnerships between research institutions and companies, resulting in valuable surveys. Suzano Group, producer of cellulose and paper, sponsored the mapping of fauna and flora in regions such as the Neblinas’ Park (Mogi das Cruzes, state of São Paulo), which led to the regeneration of native forests. Cosmetics manufacturer Natura cooperates with institutions such as the Paulista State University (UNESP) and the Agronomic Institute of Campinas (both in the state of São Paulo)
ENVIRONMENT
names of plants and animals, the different types of wood from the trees and gathered knowledge about other species. And I want to learn even more”. That is another aspect of the work done in Urucu: the training and professionalization of local labor, providing to the workers more knowledge about the region where they live.
GEOREFERENCING In the Biomapas Project website, it is possible to find the exact location of the species of plants and animals distributed over Urucu
GUZMANIA LINGULATA This flower is abundant in dense forests on the mainland. Its color ranges from deep red to light pink, and it is pollinated by hummingbirds
Photo: Geraldo Falcão / Petrobras Image Bank
The research done in the Amazon is part of Petrobras’ efforts to integrate itself to the local scenery, in a sustainable manner. “This shows the company’s effort to bring Urucu to society. The idea is to take care of nature, maintaining transparency in the process and preserving a link with the scientific research. (The mapping work) is an example of how industry can be an important partner of science in recovering and preserving degraded natural areas”, explains Sirayama Ferreira Lima, a biologist at the Petrobras Research Center (Cenpes) who is involved in the project since 2004. “Everything was recorded with scientific rigor, involving several teams and trackers – local people with empirical knowledge. They can identify where the species are located, and they also work in the recovery of the areas”.
BY MARCO ANTONIO BARBOSA AND ANDREIA GOMES DURÃO
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From the forest to the ocean With the Biomaps Project (www.petrobras.com.br/biomapas), Petrobras shares with society the valuable knowledge gained from the biodiversity mapping of regions such as the Amazon and the Brazilian coast. By using modern georeferencing techniques (satellite images and data are used to determine precise geographic coordinates), the website allows to view the mapped regions. Videos and texts also show the studied species. The obtained data is also available through a sticker album on Facebook (www.facebook.com/fanpagepetrobras). The Biomaps Project was appointed by the Brazilian Association of Business Communication (Aberje) as the best digital media project in 2011. “We are bringing together the biodiversity of the regions studied and the novelty of georeferencing. The site is dynamic, full of references and very playful”, says Sirayama Ferreira Lima, a biologist at the Petrobras Research Center (Cenpes).
Photo: Petrobras Image Bank
usually move in groups
Also in the Amazon, a NGO called Associação Amigos do Peixe-boi (Friends of the Manatee) - Ampa works for the preservation of aquatic mammals such as the Amazonian manatee, the red river porpoise and the tucuxi (grey river porpoise). The project is developed by Ampa in partnership with the Aquatic Mammals Laboratory (AML) at the National Institute of Amazon Research, with support from the Grupo
HUMPBACK WHALES A cetacean that can weight up to 35 tons and reach 16 meters in length. It is found at Brazilian coast from Rio Grande do Sul to Ceará
Photo: Petrobras Image Bank
can reach 2.35 meters in length. They
Photo: André Valentim / Petrobras Image Bank
SPINNER DOLPHIN Found in several varieties of color and size, this cetacean
for the study, preservation and propagation of native plant species in the Mata Atlântica (Atlantic Forest), also studying their potential use in cosmetics and skin products. Another cosmetics company, O Boticário, sponsors conservation projects based on threatened biomes such as the Salto Morato Natural Reserve (state of Paraná), where scientific research is being conducted, and the National Park of Serra do Cipó (Minas Gerais), which engages volunteers in revegetation projects.
Boticário Foundation. In addition to monitoring the quantities and movement of animals, Ampa promotes lectures on the environment and maintenance of wildlife. “We work on communities who live next to the rivers, alongside their students and teachers, who become multipliers in the struggle for preservation”, said Gália Mattos, coordinator of environmental education of Ampa. Brazil’s hydric resources are also the focus of several mapping studies conducted or supported by companies. An example is the Costa Marinha (Sea Coast) phase of the Biomaps Project. Led by Petrobras, the initiative mapped the location of 16 species of dolphins, whales and turtles in various parts of the vast Brazilian coast. “To follow the turtles, we used a telemetry system. The animals are marked with transmitters that send us signals providing their geographical position”, explains Leandro Rodrigues, an oceanographer at Cenpes who has been accompanying the project since 2008. “The cetaceans – whales, porpoises and dolphins – are monitored via sighting: vessels follow the movement of animals, while biologists and oceanographers observe and record everything with photographs and videos”. The research is ongoing and the system is regularly fed with information every time a new phase is completed. Cenpes also coordinates the research of the Habitats – Environmental Heterogeneity in the Campos Basin, the largest project of environmental characterization in which Petrobras is involved. The idea is to consolidate a database
“Scientific research must work together with the private sector in favor of sustainable development and conservation. That is essential”, says Nadia Borghetti Boscardin, a biologist at the Integrated Group for Aquaculture and Environmental Studies (Federal University of Paraná) and coordinator of the Guarani Aquifer project. The initiative has mapped the Paraná Sedimentary Geological Basin, revealing details about one of the largest groundwater reservoirs in the world – the Guarani Aquifer, stretching across four countries (Brazil, Argentina, Paraguay and Uruguay). Itaipu Binacional, the company which operates the hydroelectric plant of Itaipu (state of Paraná), sponsored the publication of a book on the research. “We’re helping to bring to society the academic knowledge about a very important issue”, said Jorge Salek, the Brazilian general director of Itaipu.
HAWKSBILL SEA TURTLE With its brown and yellow shell, this chelonian has a “hawk jaw” that enables it to search for food at the cracks in coral
Mapping other boundaries Petrobras conducts, sponsors and supports environmental mapping projects in several countries where the company operates. This helps to bring a better understand of different ecosystems. In Peru, Petrobras has done extensive studies on biodiversity in the provinces of Cuzco and Talara, identifying native forests, birds, mammals, amphibians, reptiles and insects. The Environmental Impact Assessment (EIA) carried out by Petrobras was delivered to local and national authorities and may be viewed by the general public. In Angola, Kitabanga Project studies the behavior and natural habitat of sea turtles. Led by biologists from the Agostinho Neto University, Kitabanga was initiated in 2003, covering an area of 22 km between the villages of Palmeirinhas and Longa. It will expand its territory of research in 2012, involving another 12 km in the same region, at Kissembo and Bentiaba. Turtles were also the species chosen by the Corporación Autónoma del Magdalena (Corpomag), an environmental protection agency linked to the Ministry of Environment of Colombia. Petrobras participates in the initiative since 2006, which records the birth of pups and the conservation of the species and is based on the Tortugario del Acuario Mundo Marino (Santa Marta, Colombia’s Caribbean coast). The implementation of satellite tracking devices demonstrated the effectiveness of captive breeding and the successful reintegration of the turtles in their natural habitat, increasing by 80% the chances of survival of the endangered species. In Chile, the Biomar Foundation held in 2010 and 2011 a study on humpback whales, determining the distribution of cetaceans at the Protected Sea Coastal Area of Francisco Coloane,
web_ visit www.petrobras.com.br/biomapas to learn more about the species mapped by the Biomapas Project
in the Strait of Magellan, (southern coast of Chile). The Foundation (along with Petrobras) published in December 2011 a book compiling the results of the survey.
ENVIRONMENT
about physical, chemical, geological and biological characteristics of the Campos Basin (located between the states of Rio de Janeiro and Espírito Santo), encompassing an area of 100,000 square kilometers.
Photo: Tamar-IBAMA Project Image Bank
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AMAZON
up and close Petrobras celebrated 25 YEARS OF ITS PRESENCE IN THE AMAZON with the anniversary, in October, of the Operations Base Pedro de Moura, at Urucu. The facility is located 650 km from Manaus, capital of Amazonas state. There, in the forest, the company seeks development, along with the harmonious coexistence with nature.
THE IMAGES THAT ILLUSTRATE THESE PAGES WERE MADE AT URUCU AND AT THE BOSQUE DA CIÊNCIA (Science Grove) – a space for preservation and study of nature held by the National Institute for Amazonian Research (Inpa) at Manaus. These are a small sample of the DIVERSITY OF FAUNA AND FLORA that can be found by closely observing this vast equatorial forest
PHOTOS ANDRÉ MOTTA DE SOUZA / PETROBRAS IMAGE BANK
ESSAY
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ESSAY ENSAIO
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web_ visit the website www.petrobras.com/magazine to learn more about the Amazon. And see more photos in the web and iPad edition
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PETROBRAS AROUND THE WORLD
EXPLORATION AND PRODUCTION
REFINING
DISTRIBUTION
LUBE OIL PLANT
OFFICE
HEADQUARTERS
PETROCHEMICAL
BIOFUELS
ELECTRICAL ENERGY
PIPELINE TRANSPORTATION
EBITDA (US$ MILLIONS) 2011 2010 2009 2008 2007
87,735 118,257 91,869 120,452
145,915
NET PROFIT BY FISCAL YEAR (US$ MILLIONS)* 25,604 31,083 28,982 33,722
37,322
2011 2010 2009 2008 2007
REVENUE FROM SALES (US$ MILLIONS) 2011 2010 2009 2008 2007
TRADING
13,138
* attributable to Petrobras
18,879 15,504 20,055
20,121
29,874 35,134 43,513
43,164
TOTAL PROVEN RESERVES (BILLIONS OF BOE)* 2009 2008 2007
20,978
DAILY PRODUCTION (THOUSANDS OF BOE/DAY)* 2,301 2,400 2,526 2,583
2,622
* Average daily production of oil and natural gas
2011 2010
2011 2010 2009 2008 2007
INVESTMENTS (US$ MILLIONS)
2011 2010 2009 2008 2007
OVERVIEW
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* SEC criteria
11.6 11.1 12.1 12.7
12.9
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