Petrobras Magazine #61

beyond the paper. At our website (www.petrobras.com/magazine), you will find all the contents of the print

| www.petrobras.com/magazine

Petrobras Magazine goes way

#61

more

interactivity and connectivity

Read_ the print version watch_ the vĂ­deos online ACcESS _extra content on the website INTERAct_ with the iPad version share_on the social networks

interview

Gilberto Gil

#61

| www.petrobras.com/magazine

issue ready to be read online or

speaks about cyberculture, collaborative creation and innovation

sports soccer, a passion that mobilizes billions

on a downloadable version. You can also watch videos and check out new photos at our Flickr gallery. Enjoy!

How companies can share knowledge and aggregate ideas coming from outside sources

business

[open innovation] the use of purposive inflows and outflows of www.petrobras.com/magazine

knowledge to accelerate innovation

petrobras’ expansion pushes forward several industry segments

around the world Chile: searching for new sources of energy

beyond the paper. At our website (www.petrobras.com/magazine), you will find all the contents of the print

| www.petrobras.com/magazine

Petrobras Magazine goes way

#61

more

interactivity and connectivity

Read_ the print version watch_ the vĂ­deos online ACcESS _extra content on the website INTERAct_ with the iPad version share_on the social networks

interview

Gilberto Gil

#61

| www.petrobras.com/magazine

issue ready to be read online or

speaks about cyberculture, collaborative creation and innovation

sports soccer, a passion that mobilizes billions

on a downloadable version. You can also watch videos and check out new photos at our Flickr gallery. Enjoy!

How companies can share knowledge and aggregate ideas coming from outside sources

business

[open innovation] the use of purposive inflows and outflows of www.petrobras.com/magazine

knowledge to accelerate innovation

petrobras’ expansion pushes forward several industry segments

around the world Chile: searching for new sources of energy

OVERVIEW

62|63

NETHERLANDS

#61 / 2011 - a quarterly publication by Petrobras Corporate Communication www.petrobras.com/magazine

_OPEN INNOVATION

UNITED KINGDOM

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 | Editors_Bruna Oliveira Baffa, Claudia Gisele Peres Martins, Eric Moreira Silva, júlia goulart jeronymo, Leonardo Queiroz de Sá, Monique Benati Rangel, Paula Alexandre Schuabb

PORTUGAL Brasília: flying aboard the Flying Rivers project’s plane, along with Gerard Moss (at left, on the smaller picture)

UNITED STATES

editorial staff

Adriano Ferreira Lima_Social RESPonsability | Eduardo Gutterres Villela_Exploration and Production | AUGUSTO LEONARDO DE GOES TIRRE_Internacional area | Lindinor Sá Larangeira_Downstream | Rafael Figueiredo Cruz e Silva_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

MEXICO

CHINA

LIBYA CUBA

_we count on

Rio de Janeiro: at the backstage with Gilberto Gil

production

VENEZUELA

BENIN NIGERIA

COLOMBIA

TURKEY ECUADOR BRAZIL

Publisher_Flavio Rozemblatt | customer service director_Paloma Bragança design director_Cynthia Homsi | PROJEcT manager _Paula Wiederkehr Editor_ Marco Antonio Barbosa | video director_GIZELLA WERNECK | DIREcTOR of photography (ViDEO)_ STEFAN HESS RePoRTERES_Vinicius Medeiros / Andréia Gomes Durão | Designers_tathyana raupp / Marina Curak / Julia Lima WEB DESIGNER_DIOGO ADIALA | WEB developer_ MARCELO PAULA | customer service_JOANA FIGUEIREDO / Natasha Brust | MULTImedia Producer_BÁRBARA DE CASTRO FINANCial manager_ ROBERTA FERRAZ | TRANSLATION AND REVISION_PAUL LUDLOW

SINGAPORE

GABON

www.seluloid.com

TANZANIA

ANGOLA

PERU BOLIVIA PARAGUAY

[2]

[1]

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

NAMIBIA

URUGUAY NEW ZEALAND

CHILE

Complete or partial reproduction of the articles published herein is authorized by mentioning the source. © Copyright 2011 by Petrobras. Affiliated to the Brazilian Association of Business Communications.

ARGENTINA

[3]

[4]

[5]

[1] juliano bortolin, product designer who created the cover’s artwork_ “Today, the challenge is to turn off the computer and do the work by hand.” [2] tathyana

stories those numbers tell.”

19,387 19,387 19,387

20,206 20,206 20,206

2,421,155 2,421,155 2,421,155 2,505,379 2,505,379 2,505,379 2,563,193 2,563,193 2,563,193

2,641,508 2,641,508 2,641,508

* Average daily production of oil and natural gas

2010 2009 2008 2007 2006

infographic artist_ “The secret of sucess when you 13,172 13,172 13,172

transform numbers in images is never losing sight of the

14,276 14,276 14,276

2,342,928 2,342,928 2,342,928

TOTAL PROVEN RESERVES (Billions of BOE)* 2010 2009 2008 2007 2006 2010 2009 2008 2007 2006

8,563 8,563

8,563 situation.” [5] gabriel gianordoli, up with an even better

12,164 12,164 12,164

2011 2010 2009 2008 2007

70,822 70,822 70,822

6,627 6,627 6,627

poses we suggested to him. Each new click, he would come

8,867 8,867 8,867

DAILY PRODUCTION (BOE/day)* JUNE 2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

57,183 57,183 57,183

10,803 10,803 10,803 [4] felipe varanda, photographer_ “Gilberto Gil is very

generous and gave himself, body and soul, to the playful

2011 2010 2009 2008 2007

89,056 89,056 89,056

39,794 39,794 39,794

6,493 6,493 6,493

translate those experiences into images. I loved it!”

INVESTMENTS (US$ MILLIONS)- 1st semester 2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

71,548 71,548 71,548

59,837 59,837 59,837

to the majestic mountains of the Andes: the mission was to 2011 2010 2009 2008 2007

49,900 49,900 49,900

38,964 38,964 38,964

2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

pictures, words and 74,291 74,291 Petrobras’ 74,291 moving images, presence at the country

2011 2010 2009 2008 2007

50,213 50,213 Chile: revealing, with 50,213

2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

2011 2010 2009 2008 2007

raupp, designer & bárbara de castro, producer_ “The interlaced silicon wires provided a perfect way to represent the new paths towards evolution.” [3] stefan hess, director of photography_ “From the flying rivers 2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

Angola Rua Pedro Felix Machado, 51/2º andar – Luanda - 2665 ANGOLA | Tel: (244 2) 39 0330 Argentina Av. Maipú, 1 - Buenos Aires – C1084ABA - ARGENTINA | Tel: (54 11) 4344-6072 Bolivia Centro Empresarial Equipetrol, Av. Leigue Castedo, 1700 - Santa Cruz de La Sierra - BOLIVIA|Tel. piloto: (591) 3667000 Chile Av. Cerro Colorado, 5240 - piso 14 / Região Metropolitana – Lãs Condes Santiago – CHILE| Tel: (00562) 328 4700 China Level 12th floor, units 21-25 - China World Tower 1 -JianGuoMenWai Avenue, Beijing - 100004 CHINA Tel: (86 10) 650 598 37 Cuba Centro de Negócios Miramar – Edifício Beijing, Piso Nro.2, Oficina 216 – Avenida 3º, entre 76 e 78, Miramar – Municipio Playa, – Ciudad de La Havana, CUBA Colombia Carretera 7, 71/21 - Edifício Bancafe / torre B - 17º piso – Santa Fé de Bogotá / DC – COLOMBIA | Tel: (57 1) 313 5000 Ecuador Esquina de Av. Amazonas N 39 123 y José Arízaga, Edificio Amazonas - Plaza, piso 5, Quito – ECUADOR | Tel: (592-2) 2985-300 Japan - Tokio - JA Bld 14 th Floor, Otemachi 1-3-1, Chiyoda-ku - Tokyo 100-6814 Tel: 081-3-5218-1200 Japan - Okinawa - 858 Aza Onaha, Nakagami-gun, Nishihara-cho, Okinawa Ken 903-0210 Tel: 081-988-882-9555 Libya Al Fateh Tower, 2 - rooms 156 and 157 - Tripoli – LIBYA | Tel: (218 91) 215-0634 Mexico Avenida Paseo de la Reforma, 115, piso 11, oficina 1101 Colonia Lomas de Chapultepec - México/DF - 11000 MÉXICO| Tel: +52 (55) 30 67 91 00 Netherlands Weenapoint, torrent A - Weena 722, 3e. Verdieping – 3014 DA - Rotterdam – THE NETHERLANDS | Tel: (31 010) 206-7000 Nigeria Plot 98, Adeola Odeku Street - 5th Floor, Victoria Island Lagos – NIGERIA | Tel: (+234 1) 462-1300 Paraguay Avda. Aviadores del Chaco esq. Cañada., 2806/Edif. Petrobras San Jorge - Asunción – PARAGUAY| Tel: (595 21) 618 1592 Peru Amador Merino Reyna, 285 piso 5 - San Isidro Lima – PERÚ | Tel: (51 1) 222 4455 Portugal Lagoas Park, Edifício 11/1º Norte - Porto Salvo – Oeiras - 2740-270 - PORTUGAL | Tel: (351 210) 992 845 Singapore 8 EU Tong Sen Street #22-89, The Central, Singapore 059818 – SINGAPORE | Tel: (65) 6550 50 92 Tanzania Off Chole Road, Plot 1403/1A - Masaki Area – Dar Es Salaam - 31391 - TANZANIA | Tel: (255 22) 216 5676 Turkey Iran Caddesi, Karum Is Merkezi, 5.Kat, F Asansoru, 427 / 21 - Kavaklidere Cankya – Ankara - 6680 - TURKEY| Tel: (90 312) 457 6222 United Kingdom 4th floor, 20 North Audley Street, London - W1K 6WL - UK | Tel: (44 0 20) 7535 1100 Uruguay Plaza Independência, 831 - piso 10, CP 11100 – Montevideo - URUGUAY| Tel: (598 2) 500-84-00 USA - Houston 10350 Richmond Avenue, Suíte 1400– Houston, TX - 77042 USA | Tel: (1 713) 808-2000 USA – Nova York 570 Lexington, 43rd floor, New York -10022-6837 USA | Tel: (1 212) 829 1517 Venezuela Av. Venezuela del Rosal, Edificio Torre Lamaletto, piso 8 Caracas – VENEZUELA| Tel: (58 212) 957-7300

JAPAN

* SEC criteria

11.458 11.458 11.458 11.705 11.705 11.705 11.19011.190 11.190 12.143 12.143 12.143

12.748 12.748 12.748

OVERVIEW

62|63

NETHERLANDS

#61 / 2011 - a quarterly publication by Petrobras Corporate Communication www.petrobras.com/magazine

_OPEN INNOVATION

UNITED KINGDOM

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 | Editors_Bruna Oliveira Baffa, Claudia Gisele Peres Martins, Eric Moreira Silva, júlia goulart jeronymo, Leonardo Queiroz de Sá, Monique Benati Rangel, Paula Alexandre Schuabb

PORTUGAL Brasília: flying aboard the Flying Rivers project’s plane, along with Gerard Moss (at left, on the smaller picture)

UNITED STATES

editorial staff

Adriano Ferreira Lima_Social RESPonsability | Eduardo Gutterres Villela_Exploration and Production | AUGUSTO LEONARDO DE GOES TIRRE_Internacional area | Lindinor Sá Larangeira_Downstream | Rafael Figueiredo Cruz e Silva_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

MEXICO

CHINA

LIBYA CUBA

_we count on

Rio de Janeiro: at the backstage with Gilberto Gil

production

VENEZUELA

BENIN NIGERIA

COLOMBIA

TURKEY ECUADOR BRAZIL

Publisher_Flavio Rozemblatt | customer service director_Paloma Bragança design director_Cynthia Homsi | PROJEcT manager _Paula Wiederkehr Editor_ Marco Antonio Barbosa | video director_GIZELLA WERNECK | DIREcTOR of photography (ViDEO)_ STEFAN HESS RePoRTERES_Vinicius Medeiros / Andréia Gomes Durão | Designers_tathyana raupp / Marina Curak / Julia Lima WEB DESIGNER_DIOGO ADIALA | WEB developer_ MARCELO PAULA | customer service_JOANA FIGUEIREDO / Natasha Brust | MULTImedia Producer_BÁRBARA DE CASTRO FINANCial manager_ ROBERTA FERRAZ | TRANSLATION AND REVISION_PAUL LUDLOW

SINGAPORE

GABON

www.seluloid.com

TANZANIA

ANGOLA

PERU BOLIVIA PARAGUAY

[2]

[1]

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

NAMIBIA

URUGUAY NEW ZEALAND

CHILE

Complete or partial reproduction of the articles published herein is authorized by mentioning the source. © Copyright 2011 by Petrobras. Affiliated to the Brazilian Association of Business Communications.

ARGENTINA

[3]

[4]

[5]

[1] juliano bortolin, product designer who created the cover’s artwork_ “Today, the challenge is to turn off the computer and do the work by hand.” [2] tathyana

stories those numbers tell.”

19,387 19,387 19,387

20,206 20,206 20,206

2,421,155 2,421,155 2,421,155 2,505,379 2,505,379 2,505,379 2,563,193 2,563,193 2,563,193

2,641,508 2,641,508 2,641,508

* Average daily production of oil and natural gas

2010 2009 2008 2007 2006

infographic artist_ “The secret of sucess when you 13,172 13,172 13,172

transform numbers in images is never losing sight of the

14,276 14,276 14,276

2,342,928 2,342,928 2,342,928

TOTAL PROVEN RESERVES (Billions of BOE)* 2010 2009 2008 2007 2006 2010 2009 2008 2007 2006

8,563 8,563

8,563 situation.” [5] gabriel gianordoli, up with an even better

12,164 12,164 12,164

2011 2010 2009 2008 2007

70,822 70,822 70,822

6,627 6,627 6,627

poses we suggested to him. Each new click, he would come

8,867 8,867 8,867

DAILY PRODUCTION (BOE/day)* JUNE 2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

57,183 57,183 57,183

10,803 10,803 10,803 [4] felipe varanda, photographer_ “Gilberto Gil is very

generous and gave himself, body and soul, to the playful

2011 2010 2009 2008 2007

89,056 89,056 89,056

39,794 39,794 39,794

6,493 6,493 6,493

translate those experiences into images. I loved it!”

INVESTMENTS (US$ MILLIONS)- 1st semester 2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

71,548 71,548 71,548

59,837 59,837 59,837

to the majestic mountains of the Andes: the mission was to 2011 2010 2009 2008 2007

49,900 49,900 49,900

38,964 38,964 38,964

2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

pictures, words and 74,291 74,291 Petrobras’ 74,291 moving images, presence at the country

2011 2010 2009 2008 2007

50,213 50,213 Chile: revealing, with 50,213

2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

2011 2010 2009 2008 2007

raupp, designer & bárbara de castro, producer_ “The interlaced silicon wires provided a perfect way to represent the new paths towards evolution.” [3] stefan hess, director of photography_ “From the flying rivers 2011 2010 2009 2008 2007 2011 2010 2009 2008 2007

Angola Rua Pedro Felix Machado, 51/2º andar – Luanda - 2665 ANGOLA | Tel: (244 2) 39 0330 Argentina Av. Maipú, 1 - Buenos Aires – C1084ABA - ARGENTINA | Tel: (54 11) 4344-6072 Bolivia Centro Empresarial Equipetrol, Av. Leigue Castedo, 1700 - Santa Cruz de La Sierra - BOLIVIA|Tel. piloto: (591) 3667000 Chile Av. Cerro Colorado, 5240 - piso 14 / Região Metropolitana – Lãs Condes Santiago – CHILE| Tel: (00562) 328 4700 China Level 12th floor, units 21-25 - China World Tower 1 -JianGuoMenWai Avenue, Beijing - 100004 CHINA Tel: (86 10) 650 598 37 Cuba Centro de Negócios Miramar – Edifício Beijing, Piso Nro.2, Oficina 216 – Avenida 3º, entre 76 e 78, Miramar – Municipio Playa, – Ciudad de La Havana, CUBA Colombia Carretera 7, 71/21 - Edifício Bancafe / torre B - 17º piso – Santa Fé de Bogotá / DC – COLOMBIA | Tel: (57 1) 313 5000 Ecuador Esquina de Av. Amazonas N 39 123 y José Arízaga, Edificio Amazonas - Plaza, piso 5, Quito – ECUADOR | Tel: (592-2) 2985-300 Japan - Tokio - JA Bld 14 th Floor, Otemachi 1-3-1, Chiyoda-ku - Tokyo 100-6814 Tel: 081-3-5218-1200 Japan - Okinawa - 858 Aza Onaha, Nakagami-gun, Nishihara-cho, Okinawa Ken 903-0210 Tel: 081-988-882-9555 Libya Al Fateh Tower, 2 - rooms 156 and 157 - Tripoli – LIBYA | Tel: (218 91) 215-0634 Mexico Avenida Paseo de la Reforma, 115, piso 11, oficina 1101 Colonia Lomas de Chapultepec - México/DF - 11000 MÉXICO| Tel: +52 (55) 30 67 91 00 Netherlands Weenapoint, torrent A - Weena 722, 3e. Verdieping – 3014 DA - Rotterdam – THE NETHERLANDS | Tel: (31 010) 206-7000 Nigeria Plot 98, Adeola Odeku Street - 5th Floor, Victoria Island Lagos – NIGERIA | Tel: (+234 1) 462-1300 Paraguay Avda. Aviadores del Chaco esq. Cañada., 2806/Edif. Petrobras San Jorge - Asunción – PARAGUAY| Tel: (595 21) 618 1592 Peru Amador Merino Reyna, 285 piso 5 - San Isidro Lima – PERÚ | Tel: (51 1) 222 4455 Portugal Lagoas Park, Edifício 11/1º Norte - Porto Salvo – Oeiras - 2740-270 - PORTUGAL | Tel: (351 210) 992 845 Singapore 8 EU Tong Sen Street #22-89, The Central, Singapore 059818 – SINGAPORE | Tel: (65) 6550 50 92 Tanzania Off Chole Road, Plot 1403/1A - Masaki Area – Dar Es Salaam - 31391 - TANZANIA | Tel: (255 22) 216 5676 Turkey Iran Caddesi, Karum Is Merkezi, 5.Kat, F Asansoru, 427 / 21 - Kavaklidere Cankya – Ankara - 6680 - TURKEY| Tel: (90 312) 457 6222 United Kingdom 4th floor, 20 North Audley Street, London - W1K 6WL - UK | Tel: (44 0 20) 7535 1100 Uruguay Plaza Independência, 831 - piso 10, CP 11100 – Montevideo - URUGUAY| Tel: (598 2) 500-84-00 USA - Houston 10350 Richmond Avenue, Suíte 1400– Houston, TX - 77042 USA | Tel: (1 713) 808-2000 USA – Nova York 570 Lexington, 43rd floor, New York -10022-6837 USA | Tel: (1 212) 829 1517 Venezuela Av. Venezuela del Rosal, Edificio Torre Lamaletto, piso 8 Caracas – VENEZUELA| Tel: (58 212) 957-7300

JAPAN

* SEC criteria

11.458 11.458 11.458 11.705 11.705 11.705 11.19011.190 11.190 12.143 12.143 12.143

12.748 12.748 12.748

_To our readers All over the world, companies are actively searching for solutions to their technology challenges, as well as searching for business deals outside their own boundaries, and to develop them in conjunction with their own ideas. In this issue, Petrobras Magazine shows how open innovation – a concept developed in 2003 by the American economist Henry Chesbrough – is revolutionizing the way organizations interact and work to succeed in the eternal race for innovation. It also details how its principles are used

by Petrobras, which, over time, has reinforced the culture of cooperation with the external environment.

Collaboration is also the subject of an exclusive interview with the musician Gilberto Gil, who, among various issues, speaks about cyberculture and the use of open innovation in artistic creation. In the Business section, we show how the growth of Petrobras is driving the supply chain and moving the economy activity of the energy sector, in Brazil and abroad.

Reinforcing our proposal to provide high quality content about the world of energy from a broader point of view, we have also produced news stories on environment and sustainability, renewable fuels, soccer, photography – always emphasizing the diversity of opinions and at the same time, presenting the “Petrobras way” of dealing with each of these themes in its daily activities. All of these subjects are presented through a cross-platform format, that allows the reader to interact with diverse and complementary content, whether in the print edition, the magazine’s website (www. petrobras.com/magazine) or the application to iPad, which can be downloaded free at App Store.

We present our world and its challenges through different eyes, and our main goal is to take you in this journey with us. Enjoy the reading!

Step by step, the work with silicon wires: the resulting piece of artwork was used to illustrate the cover and this issue’s main story

The Petrobras Magazine Team

_erratum On our 60th issue, the credits for the picture used on page 42 should have been stated as the following: Paulo Cabral / Petrobras Image Bank. For the picture on page 43, the right credits should have been DR2 / Petrobras Image Bank.

how to enjoy the magazine

cover photo: Felipe Varanda

print 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 facebook_ reaches you in a dynamic way. The new Petrobras Magazine – interconnected and Updates, new content and comments: facebook.com/ integrated. Interactive and current. fanpagepetrobras Read. Access. Participate. Enjoy.

iPad_ Interactivity, videos, audio, photos and texts

web_ www.petrobras.com/ magazine: official site with photos, videos, infographics and texts

14

18

28

30 _AROUND THE WORLD

ECONOMY

IN DISCUSSION

Gilberto Gil speaks about cyberculture and collective creation

ENERGY

_GLOBAL CHALLENGE

_INTERVIEW

06

COLLABORATION

_NEWS

INNOVATION

The latest news about Petrobras

Open innovation: searching for knowledge everywhere

Mauro Segura writes about diversity and innovation

Chile: riding a good wave in its economy, the country demands more energy

CONTENTS

42

44

_HOW IT WORKS

_ENVIRONMENT

Petrobras’ growth boosts its supply chain

The company’s initiatives for reducing the intensity of its CO2 emissions

Science and adventure together in the Flying Rivers project

50 _SPORTS

36

TECHNOLOGY

Soccer: arousing passions and shifting fortunes

GROWTH

54

Images from the “Energy that moves the world” contest

62 _OVERVIEW

ARTS

SUSTAINABILITY

_BUSINESS

DIVERSITY

INnOVATION

_ESSAY

#61 _OPEN

Where and how Petrobras operates around the world

Gil: a renowned songwriter that extended his interests to politics and to the debate about the digital world

INTERVIEW

Innovation, technology, digital culture, creativity and inspiration, on a conversation with the Brazilian artist who left the countryside of Bahia (Northeast of Brazil) and conquered the world with his music

video_ watch the exclusive interview at www.petrobras.com/magazine

by marco antonio barbosa and Monique Benati // photos FELIPE VARANDA

6|7

G ilberto Gil is a sixty-nine year old musician from the state of Bahia (Northeast of Brazil) who isn’t content to merely reinvent himself as an artist: he participates in social and political movements, debates new methods of understanding and stimulate the cultural production, and is an avid pioneer of the possibilities offered by the digital communications era, such as the free software and the flexibility of copyright restrictions.

A key figure on the Brazilian music for almost 50 years, Gilberto Passos Gil Moreira, or simply Gil, as he is usually called, came onto the scene with the advent of the ‘Tropicalismo’ genre, a cultural movement in which he took part at the close of the 1960s, and which led to a radical modernization of the country’s pop culture, mixing vanguardism with the traits of more traditional folk genres. Since then, he has never looked back and has become one of the most revered and recorded composers in MPB (Brazilian Popular Music).

Throughout the years, he has been an enthusiast of new technologies

and has always been receptive to new ideas – whether they may be artistic, cultural or scientific.

During the 1990s, when few people in Brazil understood the meaning of digital communications, Gil was already speaking on the subject.

Revered in the music field, he decided to blend politics and culture, an involvement which eventually led to his five-year tenure in the Ministry of Culture, an event that gave unprecedented exposure to the position and to the debate on cultural production and dissemination.

This artist, always closely involved with technology and innovation (in his first album, released in 1967, he already sang about space exploration in the song “Lunik 9”), played host to Petrobras Magazine in his studio in Gavea, at the city of Rio de Janeiro, to talk about technology

and innovation. Without losing track of the subject matter, he also spoke about inspiration, imagination, composition and collaborative creation in a conversation that began with contemporary digital culture and ended by returning to the interior of the state of Bahia, discovering the genesis of his interest in the novelty, the modern and the cutting edge.

8|9 The principal theme of this edition is open innovation. What does that represent to you?

Gilberto Gil: It’s a theme that stands among the various open source questions.....open codes, free software, mash-up, mixture..... the demands that the contemporaneity imposes on the management of knowledge. How does one manage knowledge in this day and age? The new technologies, the new skills.

And open innovation is one of them.

Should innovation remain within a closed environment or should it cross over to an open platform?

2

Is it possible to imagine a similar form of collaboration in an artistically creative context – such as, for example, the collective construction that occurs in jazz, in which everybody creates together, searching for a musical solution?

Gilberto Gil: If you look at collaboration in the world of jazz or in the world of experimental music, even in pop music, you will find successive new approaches, some of which are already evolving into technologies applicable to the world of entertainment, to the recording of music and to the business as a whole. Other fields, such as technological innovation in a corporate setting, are already producing benefits similar to those taking place in the music world.

3

How does this work in your creative process? How do you deal with interruptions to the creative process?

Gilberto Gil: I’ll give you an example: the preparation of the playlists for the shows. When I am appearing alone, as a solo performer, I am wholly responsible for the creative process. My

If you look at collaboration in the world of jazz, of experimental music, even in pop music, you will find successive new approaches, some of which are already evolving into technologies applicable to entertainmentent and to the music business as a whole” voice, my guitar, etc. If I add another musician, then his participation becomes fundamental. The creation of arrangements, the end result of the song, becomes dependent upon the two of us. If it involves the band I work with, with other five or six musicians, then we share the creative process, the way in which the music is presented to the public. This is the result of collective creation. The bass player says this, the keyboard player says that, and the sax says “look here...” And at the conclusion the ideas are blended together to produce a shared result.

4 Is your work always open to change or is there a point where you draw the line?

Gilberto Gil: There are partial definitions. I can decide on a defined format for one particular moment.

There can be an introduction, first section, solo and a closing section.

That’s how we present it onstage.

But then if the opportunity presents itself, the creative process can start again. Changes to the bassline, the guitar, the voice, the way in which the melody is presented, the lyrics...

The piece remains a work in progress.

Occasionally we have a finished product, a definitive arrangement that retains the same format in all the shows. But that’s rare.

INTERVIEW

1

5

One of the most difficult phases of open innovation projects is implementation. In other words, all the dialogue and exchanges take place during the collaborative process, but one can end up losing the end product along the way.

Based on your own musical experience, how can you implement these innovations in such a manner as to ensure they don’t get lost?

produce new and unusual forms. The use of these multiple technologies in conjunction produced some surprising possibilities. Onstage, you already have the concept of openness. A few days ago, touring the Northwest of Brazil, we played the song “Vamos Fugir” (“Let’s Run Away”) and our bass player recorded his initial base line on a digital recorder: (Gil hums, imitating the sound of the bass) dum-dumdumdumdum...” Then, during the show itself, he played back this recording and laid a bass track over it, improvising on the original recording.

These are possibilities that arise due to technology.

Gilberto Gil: If we look at other fields, where the raw material is more “solid”- such as literature, cinema, drama... – we can indeed hold on to a more rigid concept of the end format to eliminate the risk of entropy, any loss due to an excess of improvisation. In the case of music, this risk is smaller, because music is more It’s no use saying ‘ malleable. It’s more like the brain itself, it has a great should be reprocessing capacity to create new meanings... Obviously, used for such and such this occurs in popular music, interests relating to within more rigid, radiophonic formats- just as it does in human creation’. There is a novel, or in the text of a theatrical play, where rigidity no creative field in which is of greater importance. But these new technologies in jazz, in improvised music, the instantaneous music, this are not already providing fear of entropy is very small.

You can take great risks, new services. Everything rebuild entire sections and the end result will still be that is a product of coherent. Just consider the free jazz compositions, which don’t even have an can count on a decisive initial format!

culture

cyber

Speaking of cyberculture, what other subjects do you think should be debated by society in this day and age?

Gilberto Gil: It’s no use saying: “Cyber culture should be used for such and such interests relating to human creation”. It is already being used. There is no creative field in which these new technologies are not already providing new services. In medicine, engineering, architecture, the graphic arts, music, science... The deciphering of the genetic code would not have been possible without bits and bytes. Everything that is a product of human collaboration from the intelligence can count on a Within the realm of Brazilian decisive collaboration from cybernetic process” artists, you have always been the cybernetic process. an enthusiastic pioneer of A variety of applications new technologies. First you in various fields of human released the “Pela Internet” interest, creative and (“By the Internet”) song. Later, the entire Banda Larga intellectual activities. It stretches from medicine Cordel (“Broadband Cordel” – “cordel” is a form of to soccer (laughs). When you argue over whether a folk poetry, very popular in Northeastern Brazil) was computer should be used to confirm whether a player released on the internet. What were these experiences was or wasn’t offside, if another player has scored a like? How did they influence your work? goal or not... In short, it stretches as far as you care to imagine, to music, creativity, poetry and the extensions Gilberto Gil: The use of computers, synthesizers and of all forms of subjectivity. drum machines gave me a freedom which did in fact

human intelligence

6

7

8

You have also been responsible for spreading the Creative Commons concept in Brazil and abroad. Up to what point can we talk about the liberation of copyright restrictions? Can you see this debate extending to other fields outside the artistic medium, such as patents and inventions, for example?

Gilberto Gil: Creative Commons licenses already number in the hundreds of millions. They recently launched Science Commons licenses, for scientific research in open innovation. They are working on the premise that it is no longer possible to withhold knowledge. Doing so brings the risk of definitive backwardness.

Science, the arts, all forms of technological applications... Everything needs commons. That’s how we came to the present-day world condition: multiple exchanges in every sense of the word. Going from literary texts, academic works, artistic exchanges...

And it isn’t just a single model; there is a multitude of other open licenses.

The British government has its own licensing, as do other institutions.

9

How do you assess the repercussion of “Oslodum”, the song you released with totally unrestricted rights, through Creative Commons?

Gilberto Gil: In music you have four or five types of license, from the one that states “all rights reserved”, in keeping with the traditional model, through to the one that states “all rights unrestricted”. Between these two extremes there are other models, involving partially unrestricted rights, creating the possibility of mash-ups, or the partial use of fragments, the reapplication of parts of musical or literary works...I chose to let “Oslodum” totally free of any restrictions, so that, it could be reused, either partially or in its entirety. I have no control over it, or over how it’s being used. It is

Creativity for all Created in 2001 to reposition knowledge as a collectively owned resource, Creative Commons (http://creativecommons.org) saw itself transformed into a synonym for the diffusion (and reuse) of knowledge.

Creative Commons allowed the authors of any type of content (musicians, writers, photographers, filmmakers....) to authorize a given use of their work by society, through the issue of specific licenses. For example, it is possible for a songwriter to use the “Attribution” license (which grants user rights to any other person, provided that the author is credited with the work) for one of his songs. Or a blogger could apply the “NonCommercial Use” license (permitting reproduction of his work for exclusively non-profit purposes) to his published texts. Some 200 million institutions, companies and artists have resorted to some model of Creative Commons concept to distribute content – from the White House to the Al Jazeera TV network.

By internet, tablet and cell phone Gil does not restrict himself merely to words when he talks about “opening” his work to the World Wide Web. In July this year he launched a free application for iPhone and iPad platforms. A kind of pocket version of his official website, the application allows the user to stream all of his music starting from his first LP (Louvação, 1967) as well as being able to access photos, lyrics and videos.

You will find a link for download the app at the iPad version of Petrobras Magazine.

12|13

10

Which ways could be used to further spread Brazilian cultural production on a global scale?

11

in one of these subjects. It’s no use being interested in ecology without also having an interest in economics, income distribution and the democratization of the decision-making processes in politics. All these things interest me; I can’t be interested in just one of these things.

Gilberto Gil: One solution to increase Brazil’s cultural presence is the open world concept, the free software, more 12 Thinking back to your childhood in Bahia (he grew up in the small town far-reaching licensing. In fashion, of Ituaçu), the young Gil didn’t have videogames, music, science, academic access to these technologies. But it investigations, in the creation of applied is curious to notice that you have a science. I see emerging countries wide interest in these great advances. such as Brazil reaping ever more Your artistic work always reflected benefits from this creative surge for that interest. How did the world of the the collective use. There is the case of machines and your playful childhood BNegao, a Brazilian artist who decided to record and release his songs for free crossed paths? access on the internet. He went on to Gilberto Gil: The influence of build an international career as a result machinery upon me dates back to that of this decision. Now he has created time, to my childhood. When I looked a market for his live performances at magazines about the Second World which he didn’t have before, right War (1939-1945), when I was three or across the world. Before that, he was four years old, I became very interested an underground artist, and had only in those machines, the tanks, ships, a small cult following here in Brazil. planes... The new configurations of The free release of his music over technical knowledge were of great the internet brought him listeners in interest to me. I later became comic France, Germany... book fan, following the adventures of Superman and Batman, characters Speaking about politics and society, closely connected to the advance what national and international of technology. As a result, I have debates most call your attention been fascinated by the dialogue with by now? the machine, with the mechanical processes that define the use of Gilberto Gil: Everything interests me, technology. The fascination in taking everything that concerns the expansion machinery apart, like a boy that gets of civic responsibility, the individual and collective social activism. This goes a toy car and takes off the wheels, the from traditional politics – governments, steering wheel... (laughs). To know legislative bodies, laws and standards how it is made, and eventually be able – to the debate on man’s use of nature to put it together again, to rebuild and its impact upon it. Or the use of it. This is what the kids with their knowledge and how we can insist on computers are doing today. Facebook, the greater democratization of that Google, all this is related to the use. Consequently, politics, ecology, curiosity of the young people about technology and human behavior any gadget, the ability to reassemble are all interconnected. Because you and re-use technology in ways never cannot have only a partial interest imagined originally.

INTERVIEW

possible that somewhere out there are products on the market created from sections of the song.

Five decades of innovation Between discs recorded in the studio, live recordings and collections, Gilberto Gil has 58 album releases to his name, dating back to 1967, the most recent being Fé na Festa: Ao Vivo, that arrived in 2010. During this trajectory, he managed like few others to unite traditional popular Brazilian music (with its rhythms of samba, baião and xaxado – a dance style originating in the state of Pernambuco – and Northeastern influences) with pop music influences – particularly reggae and rock.

Among the dozens of classics to his name, it is worth noting that scientific and technological advances are a recurring theme.

In addition to the aforementioned “Pela Internet” and “Banda Larga Cordel” releases, Gil also touches on these subjects in songs such as “Alfômega”(1969), “Cérebro Eletrônico” (“Electronic brain”, 1969), Parabolicamará” (1992) and “A Ciência em Si” (“Science in itself”, 1997).

Presence in the 2011

ARPEL CONFERENCE

Milton Costa Filho, general manager of Petrobras Mexico and president of Arpel, made a speech during the opening ceremony in which he emphasized the importance to Latin America and the Caribbean of the debate on themes such as the impact of the crisis in Africa and the Middle East on investment flow. In his view, companies are increasingly turning to safe and politically stable regions, and to environments that are more conducive to productivity. And this includes the oil, gas and biofuels market.

The strategic session entitled “New frontiers and challenges in deepwater operations” was presided by Carlos Alberto da Costa, Executive Director of Petrobras Argentina, and included a presentation by Mauricio Diniz, the company’s General Manager for Sub-Sea Engineering, on advances in the exploration of the pre-salt layer. Jose Carlos Villar Amigo, Executive Manager for Latin America at Petrobras’ International Area, also spoke about the importance of the new discoveries in the region.

High-ranked Petrobras executives were present at the Arpel event

Turning to the global energy scenario, Jose Sergio Gabrielli de Azevedo, president of Petrobras, spoke during the course of his lecture about the impact of the price of oil on the gas market and the consumption and production patterns changes due, principally, to the decreasing demand in Europe, USA and Japan, and the growth of the markets in India and China. Gabrielli stressed the increasing importance of Latin America as a hydrocarbonproducing region and its investment potential within the sector.

On the same day, Solange Guedes, executive manager for Production Engineering, highlighted Petrobras’ commitment to operational safety and gave details of its Marine Operations Safety Reinforcement Program. Rodrigo Abramof, manager for Product Quality, spoke about economic sustainability and the future of the refining sector.

Lauro Valdir de Souza, manager of Strategic Analysis, dealt with the measures required to face matters such as climate change and safety. Closing Petrobras’ participation, Luis Cesar Stano, manager of Health, Safety, Energy Efficiency and the Environment Performance, spoke on environmental management and emphasized the importance of integrating Health, Safety and the Environment (HSE) issues with corporate processes in the development and assessment of management practices and processes.

Photo: Petrobras News Agency

etrobras participated in the 2011 Arpel Regional Conference promoted by the Regional Association of Oil, Gas and Biofuels sector companies in Latin America and the Caribbean (Arpel). The theme of the conference was “Ideas – Solutions – Actions – Moving Towards Greater Regional Synergy”. Held in Punta del Leste, Uruguay, on March 28-31, the conference brought together the main representatives of the oil, gas, biofuels and other renewable energy sectors to discuss sustainable energy development in the two regions. This year, the biannual event played host to more than 500 participants, including members of the production chain, stakeholders and top executives from companies like Petrobras.

The presentations and lectures dealt with matters such as the business environment and its corporate dynamics, the energy sector’s economic and operational sustainability, the environment and the best operational and management practices.

News

14|15

PETROBRAS ARRIVES IN

Foto: Thinkstock

GABon

GABon

Further increasing its international activities, Petrobras acquired a 50% stake in the exploration rights for the Ntsina Marin and Mbeli Marin blocks in the Gabon Coastal Basin in June. The blocks are located offshore of the African republic of the same name (on the west coast of Africa).

The operation, implemented by the subsidiary Petrobras Participaciones S.L. (PPSL), will permit exploration of an area of 6,683 square kilometers at depths of up to 2,400 meters. Studies confirm that the geological conditions are comparable to those found in Brazil. Petrobras is committed to a program to acquire seismic 3D data over a 2,000 square kilometer area. Once this stage has been completed, the company will have the right to evaluate its permanence during the next phase of the exploratory program, which will include the drilling of wells. The British company, Ophir Energy, from whom Petrobras purchased the rights to the two blocks, will retain its 50% stake holding.

new discoveries in the

GuLF MEXICO of

More than 700 million barrels of oil equivalent (boe): such is the potential of the recent discoveries in the ultra-deep waters of the Gulf of Mexico, announced by Petrobras at the start of June. Exploration in the Hadrian area of the Keathley Canyon concession, in the U.S. portion of the Gulf of Mexico, showed three important reservoirs (two of oil and one of gas) that, together, form one of the largest discoveries in the region over the last decade. Located almost 400 kilometers to the Southwest of the coast of New Orleans (USA), at a depth of approximately 2,100 meters, an accumulation of oil in a reservoir 144 meters in thickness was detected by drilling the KC919#3 well, in Block KC 919. Even deeper wells will be drilled in the area. The presence of oil and /or gas had already been confirmed previously in Blocks KC 919, KC 918, KC 963 and KC 964. The project is operated by ExxonMobil and the subsidiary Petrobras America has a 50% stake in Block KC918 and a 25% stake in Blocks KC 919, 963 and 964.

Expanding the field

Revitalization of

in biofuels

the Lubrax brand

growth & Responsibility in 2010

photo: courtesy of BR Distribuidora

Now in its 38th year, Lubrax is the leading brand in Brazil’s lubricants market and it is experiencing growing demand in Argentina, Uruguay, Paraguay and Chile. The trademark has recently been revitalized, aiming to achieve an even greater market exposure.

Packaging and labeling on more than 120 types of oil used in the automotive, industrial, aviation, naval and railroad sectors have been redesigned and integrated, based upon the trademark’s new positioning, strengthening the association with Petrobras. The initiative was implemented by the Company and by its subsidiary, Petrobras Distribuidora, based upon the results of research obtained from various public profiles. The company sought to identify the principal requirements of the consumer to create an even more modern and reliable product. Learn more about Lubrax at www.lubrax.com.

photo: André Valentim/ Petrobras Image Bank

Petrobras acquired 50% of the share capital of BSBIOS Indústria & Comércio de Biodiesel Sul Brasil S.A (Sul Brasil S.A. Biodiesel Industry & Trading), located in Passo Fundo, in the state of Rio Grande do Sul. The transaction, conducted by the Petrobras Biocombustivel subsidiary, involved resources of some R$ 200 million. The plant is capable of producing one hundred and sixty million liters of biodiesel annually from vegetable oils.

With the new partnership, the two companies will share the operation of an industrial complex with a total annual production capacity of three hundred million liters of biodiesel, with additional investments in ethanol.

The acquisition strengthens Petrobras’ leadership of Brazil’s biofuels sector and consolidates the existing partnership between the two companies, already associated at the Marialva Biodiesel Plant in the state of Paraná, and increases commercial and operational synergies in the South of the country. With this acquisition, Petrobras will now operate five biodiesel plants, two in the Northeastern Region, one in the North of the state of Minas Gerais, one in the state of Paraná, one in partnership with BSBIOS and the unit in Passo Fundo. All those production units are located in Brazil. The company has an overall annual biodiesel production capacity of seven hundred and ten million liters.

etrobras published its 2010 Sustainability Report, a document compiling information on the Company’s performance over the preceding year. The publication reflects the integration between the three pillars of Petrobras’ corporate strategy: integrated growth, profitability and socio-environmental responsibility. The report also identifies the Company’s progress in complying with the directives of the United Nations Global Pact, of which it has been a signatory since 2003. The report highlighted the start of operations in the Lula field, in the pre-salt layer of the Campos Basin, the public share offering, which raised R$ 120.2 billion (US$ 63.7 billion) on the market and the signing of the Onerous Concession Contract, which guaranteed the Company the right to produce 5 billion barrels of oil equivalent (BOE) in nontendered areas within the Pre-Salt Province. In the environmental field, the report emphasized Petrobras’ actions to mitigate climate change, particularly those relating to energy efficiency, as well as its environmental investment of R$ 2.4 billion (US$ 1.3 billion), R$ 457 million (US$ 242 million) more than the total investment for 2009. For the first time ever, the report was printed on synthetic paper manufactured from recycled plastic. No component originating from trees was used in the manufacture of the paper, which can be recycled again. The Petrobras report complies with the Global Reporting Initiative (GRI) directives and falls within the A+ application level, attributable to reports presenting information on all the essential indicators specified by the directives that has been submitted for external verification. The full report can be accessed at www.petrobras.com.br/rsa2010.

Petrobras is Latin America’s leading energy company in terms of its concerns regarding sustainability within its sector, according to the ranking produced by Spain’s Management and Excellence (M&E) Consultancy and

by LatinFinance magazine, which specializes in the Latin American market. Published in May, the study assessed the degree of adhesion of the sector’s leading companies to policies of sustainability and their effective implementation. Petrobras excelled by achieving a higher rating than its peers in the sustainability performance category. Almost 200 attributes relating to social responsibility, corporate governance and both environmental and financial practices were evaluated.

This ranking is considered an essential tool for investors and market analysts to assess the future performance of the companies listed therein.

2.

In the Top Ten of Publicly Traded

Companies

The world’s eighth largest publicly-traded company; the 5th largest when considering profit and market value; the only Latin American company to figure in the top ten. This is Petrobras’ most recent ranking in Forbes magazine, which assessed publicly traded companies across the world under categories such as profit, income, assets and market value. Petrobras climbed ten places in relation to 2010, when it ranked 18th.

News

3.

The most valuable

trademark in Latin America

Petrobras holds top spot in Latin America and 61st overall in the ranking of the world’s most valuable trademarks, published by Millward Brown, the US marketing research agency. The ranking registers a 39% increase in the value of the Petrobras trademark, between 2010 and 2011, reaching US$ 13.4 billion and climbing 12 places in relation to the previous survey.

Petrobras ranked above other global trademarks such as Pepsi, Samsung, Siemens and Sony, and competitors such as Petrochina and British Petroleum.

4.

Flying high on FORTUNE 500 In its annual ranking, which classify the world’s 500 largest corporations, Fortune magazine ranked Petrobras 34th, the best-placed Brazilian corporation, with income of US$ 120.052 billion. The company placed 8th amongst the world’s most profitable corporations for the preceding year (US$ 19.184 billion in profits), an overall increase of 23.7% on the 2009 figures. Based on its 2010 ranking, Petrobras climbed 20 places in the classification of the world’s largest corporations (from 54th to 34th). This list is considered to be one of the most important indicators of the global business scenario.

photo: Thinkstock

Leader of the sustainability ranking

16|17

How can a corporation take advantage of innovative ideas that appear outside its domains? Through the OPEN INNOVATION, large and small companies share knowledge and develop

joint technologic solutions to accelerate their own evolution

wherever

innovation may be

GLOBAL CHALLENGE by marco antonio barbosa // artwork JULIANO BORTOLIN, Tathyana Raupp and Bรกrbara de Castro // photos FELIPE VARANDA

18|19

here are less than 50 companies in the world capable of carrying out precise inspection of oil and gas pipelines to prevent leaks and corrosion. In the Southern Hemisphere, only one such company has the necessary expertise for the task: the Brazilian PipeWay Engenharia, based in Rio de Janeiro. The operation of equipment such as the Pig Corrosion, which detects structural faults in submarine pipelines operating under extreme pressures and temperatures, has enabled the company to provide its services to other firms that operate on a global scale. This only proved possible due to the collaboration between PipeWay and Petrobras, which, in 1998, began to transfer the technology to the company. At that time, PipeWay was a pilot project overseen by PUC-Rio (Pontifical Catholic University of Rio de Janeiro). The partnership, coordinated by the Petrobras Research Center – Cenpes – provided PipeWay with the technology and tools necessary to develop the Pig Corrosion. In turn, it not only provided the service, but also perfected new solutions based on those initial projects.

The experience uniting PipeWay and Petrobras is an exemplary case of open innovation. By opening its doors to outside collaborators (universities, suppliers,

“Companies have realized a long time ago that they can’t create everything they need on their own”, says Bruno Rondani, the executive director of Open Innovation Center – Brazil. One of the solutions is open innovation, a model whereby companies can (and should) use outside ideas in conjunction with their own, as a way to furthering their current technological knowledge. To achieve this, their research departments must be open to develop projects in partnership with outside sources, to debate problems and to share inventions and products which previously had been guarded under lock and key. “On their own, companies are not able to face all the present-day challenges. Open innovation creates value and expands the platform of collaboration between companies, even between competitors, which is healthy for the development of any branch of industry,” states Rondani.

Photo: Jean Livet/Harvard University

T

independent research institutions and even its competitors), sharing information and exchanging experiences, Petrobras is one of an ever-increasing group of companies that are developing technological solutions based on the open innovation concept, created by the American economist Henry Chesbrough in 2003. “To innovate means more than simply investing in scientific research. It also involves thinking about new business models, maintaining cooperation with customers and consumers and attracting the participation of external sources of knowledge”, states Chesbrough (see interview on page 26).

Based upon his observations of companies’ practices, both large and small, since the 1960s, he defined the fundaments of the concept, that offers alternatives for the companies to meet the eternal challenge: how to innovate fast and effectively?

Patents defended to the death Industrial secrets, secrecy of patents, intellectual property: since the dawn of capitalism, these terms have accompanied the processes of innovation implemented by companies.

One example of this protection is the procedure adopted in the decades of 1900 and 1910 by the corporation headed by Thomas Edison, inventor of the electric light. The company held the patent for movie cameras and didn’t hesitate to resort to physical violence (including shooting) to discourage any studio that failed to pay royalties for the use of its invention.

The majority of technological advances during the 19th and 20th centuries were born of a model known today as “closed innovation” (a term also created by Chesbrough). Big companies invested large sums in research centers which were responsible for the complete in-house development cycle of their products. “The closed management of innovation was widespread at the beginning of the 20th century due to the lack of involvement by universities and government institutions in research that had a commercial or industrial application”, says Albert Meige, a French researcher of the École Polytechnique in Paris, director of Presans (which provides technological consultancy services) and the author of various papers on innovation. “It was a cycle in which companies invested internally in new products and processes and managed to recoup a large part of their investment in the creation of new technologies. But in order to do so, they had to keep their researchers for several years and the intellectual property needed to be protected.”

This model drove the technological advance in the majority of companies in the western world during the last century and is still the norm today, if we think in terms of practical applications and products reaching the end consumer. One example is Apple, which maintains strict control of its trademark,

operational systems and hardware solutions.

However, changes in the markets and in the economy made it necessary to seek out alternative models. Even the big companies found it difficult, year after year, to hold on to their research personnel, who took with them their specific knowledge when they left. The proliferation of venture capitalists (investors that finance fledgling companies based on high-risk funds capital, allocated to speculative activity) permitted small entrepreneurs to create innovative technological projects. The corporations also noted that various products derived from internal research, which could previously linger for years with no practical application, could be licensed or transferred for other purposes. And suppliers began to demonstrate a much greater capacity to engage in dialogue with the customers they used to serve, sometimes even refining technologies created by these customers.

These attitudes have been growing since the start of the 1960s. By comparing the way in which some of the main technology companies in the USA have dealt with these

Brainbow, the “brain rainbow”: the links between the nerve cells are represented by fluorescent colors, serving as a metaphor for the connection between several sources of knowledge, united in the search for innovation

Reaching further afield During the 1980s, Lucent (a telecoms company) lost a large market share to Cisco, a much smaller company that preferred to resort to outside suppliers and start-ups to obtain innovative solutions rapidly.

During the same period, IBM’s research capacity was challenged, and frequently beaten, by more innovative business models developed by corporations new to the scene, such as Intel and Microsoft. Through its willingness to work with third parties, Nokia scattered its R&D centers across the world (in 16 countries at present) and, in three decades, shook up a market dominated by giants such as Motorola and Siemens. In the pharmaceuticals sector, newcomers such as Amgen and Genzyme applied open innovation to compete against much larger companies, such as Merck and Pfizer.

changes, Chesbrough was able to identify the precepts of open innovation.

Currently, companies need to discover which of the paths to innovation – more open or more restricted – are more suitable to their case.

“There is still an intense debate on which is the ideal model. The fundamental requirement is to innovate, regardless of how”, stresses Everton Bonifacio, internal corporate training coordinator at the Brazilian Capital Market Institute (Ibmec). “The business model of each corporation should be well thought out to identify exactly what can be done inhouse and which complementary resources should be sourced externally. This way, the risks of loss of potential profits or exclusive user rights on determined technologies are minimized”, he concludes. Roberto Murilo Carvalho de Souza, Technological Strategy manager of the Petrobras Research Center, explains the situation in practice: “The decision also depends on the stage at which we find ourselves in relation to the desired technology objective. If we are well advanced, it can be worth our while to develop everything in-house. If it is a field which we are not fully familiar with, we may look for outside partners”.

Carlos Tadeu da Costa Fraga, executive manager of Cenpes, says that Petrobras has practiced open innovation since the beginning of its technological development activities and training of R&D personnel, in the 1960s. “In the beginning of the Petrobras’ research activities, one of the principal vectors was the rapid assimilation of refining technologies. We acquired the first projects, learnt from techniques developed in other countries, perfected it over the years and today we own various technologies developed by Petrobras itself,” he says. The consolidation of the capacity for innovation in the company came a bit later, at the time of the discovery of the vast offshore reserves in the Campos Basin. According to the executive, the technology to extract oil from these ultra-deep fields did not exist, so it was necessary to develop it in conjunction with international suppliers. It helped to spread the culture of technological cooperation within the Company.

It’s important to acCess good ideas wherever they come from. But in order to assess whether an idea is good for our business or not, we have to have the internal competence” Carlos Tadeu da Costa Fraga, executive manager of petrobras research center

In Carlos Tadeu’s opinion, at the present moment there is an intensification of this culture of cooperation with the external environment. Petrobras’ technological strategy involves partnerships with universities, suppliers and other companies in various fields of knowledge, and also includes the interaction with other business segments in the search for innovative solutions. “For example, various technologies used in medicine are also used by the oil industry, for the imaging and diagnosis of rocks”, he says. “It’s important to access good ideas, wherever they come from. But in order to assess whether an idea is good for our business or not, we have to have the internal competence. We have to take pride in capture good ideas from the outside as much as we do in developing our solutions in-house,” he argues. Roberto Murilo seconds Chesbrough’s thoughts when he states: “This is not just about technological development. Open innovation on its own isn’t enough, it’s necessary to keep an open mind. We have to switch on the radar and broaden our thinking to consider alliances throughout the world, including those outside the US-Europe axis”.

Various paths lead to innovation There isn’t one single model of open innovation. Everything depends on the origin of the idea, how it will be handled and in what form it will reach the market.

Let’s use the example of a scientist who, during the course of his research, makes a discovery that he considers interesting. If the company employing him chooses not to launch the product commercially, the open innovation concept recommends that he may, for example, develop the idea by himself. In another case, a company may create a product internally, but chooses a partner to launch it (thus gaining a foothold in a new market to which it otherwise would

GLOBAL CHALLENGE

22|23

not have access). An innovative concept created by a start-up (a fledgling company with small and agile structure, usually acting in the technology market) can also be shared with another larger corporation which could provide the necessary funds and personnel to manufacture and launch the end product. There is also the possibility of a large company prefers to form another smaller company (a spin-off), either alone or in partnership, for the sole purpose of developing a particular innovation.

“Previously, there was the ‘not invented here’ paradigm, which caused companies to view any creation not invented solely by their internal R&D departments with suspicion”, recalls Bruno Rondani. “The companies which embraced open innovation have adopted another paradigm: probably found elsewhere, indicating that the connection with new technologies from external sources is something to be appreciated.”

Photo:Courtesy of Braskem

Opening up the ideas:

Photo: Courtesy of Fiat

Fiat Mio It is considered the first automobile conceived via crowdsourcing (learn more about it at page 27). Around 18,000 users contributed with ideas to create the ideal urban car.

Braskem The company created an online bank of ideas, open to anyone willing to suggest new lines of research. A quarter of the resarchers working for the firm come from external partners.

Google

Photo: Courtesy of IBM

Photo: Courtesy of Samsung

The jet plane ERJ-145, one of the best-selling planes of the company, was created from the collaboration between Embraer and four other firms.

IBM Since 2006, the firm has mobilized more than 150,000 people in 104 countries, working on open innovation iniciatives. The project has received investments in excess of US$ 100 million.

Intel Opened in 2009 in Munich (Germany), Intel Open Lab coordinates several cooperation programs.

Intel also maintains open innovation centers in Switzerland, in Ireland and in Israel.

Photo:Courtesy of Intel

Embraer

Photo: Courtesy of Embraer

The firm opened the source code of its operational system, Android. It allowed to outside partners to suggest improvements and to create compatible apps for the platform.

future

S

ince its foundation, Petrobras has used open innovation initiatives in several of its projects, even before the trend became known by its present name. Up to the 1970s, it carried out research in association with other companies, internalizing knowledge on refining technologies. With the discovery of the oil reserves in the Campos Basin, in the 1980s, the Company intensified its cooperation with corporations such as Schlumberger and Halliburton and started the development of the first projects involving other research centers, specially in relation to the drilling of ultra-deep wells.

The present decade has seen the organization of the so-called thematic networks, groups of universities that receive support from Petrobras and carry out research in fields of interest to the Company. These networks produced projects such as groundbreaking platform stability tests – in cooperation with the Federal Universities of Rio de Janeiro (UFRJ) and São Paulo (USP) – and graphic computing solutions (along with PUC-Rio). The enormous challenges presented by the exploration of oil and gas in the pre-salt layer have led to many more partnerships. “Nowadays we have many models of cooperation”, says Roberto Murilo Carvalho de Souza, Cenpes’ Technological Strategy manager. “We are developing products in partnership with other companies, sharing costs; we are working with companies embedded in universities; and we are ready to receive the technological centers that are going to be installed in Rio de Janeiro by firms that work in partnership with Petrobras, such as Schlumberger, FMC and GE, among others”.

PipeWay, referred to at the beginning of this article, fits into this scenario. In 2001, the company received the technology referred to as the “Pig”, an inspection tool for pipelines that accumulate large quantities of dirt – hence the name.

The Pig Corrosion was a solution created by Petrobras and presented to other companies (including PipeWay) with

the objective of improving cleaning and inspection services in its own pipelines. “We received the technology, but we developed the know-how ourselves”, recalls Vinicius Carvalho, PipeWay’s director. We have been adapting and perfecting it for almost ten years. Nowadays, we use the Pig Corrosion and other solutions derived from it to provide services to other companies throughout the world, paying royalties to Petrobras”. Murilo sums up by saying: “If we had spent resources developing a product and don’t use it any more, why not license it?”.

One of the principal examples of the Company’s involvement with open innovation is the Procap Visão Futuro Program (Procap Future Vision). A pool of more than 40 institutions from all over the world, including companies and universities, is working in partnership to create new technological solutions relating to the exploration and production of oil and gas, involving production systems, well engineering, logistics, reservoirs and sustainability. Each solution is developed in workshops with the participation of contracted companies and universities. Evolved from programs initiated in the 1980s, Procap is currently engaged in testing projects involving the separation of fluids and multi-phase pumping (oil, water and gas) and the automation of platforms. The first laser drilling prototype is expected to be developed by 2013.

Another of Petrobras’ pioneering initiative involves the Technological Program for the Mitigation of Climate Change – Proclima – in which a test methodology in the field of open innovation is currently being applied.

“We ask our partners: what should we do with the carbon dioxide? What are the best solutions to transform it into a product and no longer view it as merely an emission? Is there a chemical solution? Or should we use biotechnology? That’s what we are debating,” says the Technological Strategy manager about the project, which unites Petrobras, representatives of academia (UFRJ and the National Institute of Technology) and industry (Dow Quimica, Dupont and Abiquim).

GLOBAL CHALLENGE

An open road to the

24|25

_henry chesbrough In his book “Open Innovation: The New Imperative for Creating and Profiting from Technology”, the economist Henry Chesbrough created, in 2003, the term “open innovation” to explain how corporations can seek outside ideas to assist in their development as well as sharing the innovations themselves. These days, Chesbrough is the Executive Director of the Open Innovation Center at the Haas School of Business, at the University of Berkeley (USA) and travels all over the world to propagate his concepts. “The trend has taken off in the last few years”, he told Petrobras Magazine.

There is useful knowledge distributed throughout the world.

And no company or country is capable of aggregating all this knowledge on its own”

is intellectual property, when the time comes to define who possesses the legal right to apply the knowledge obtained. Another risk is that the company might end up discouraging the use of external technology in its internal R&D processes.

In relation to the energy market, how are the global companies within the sector adapting to open innovation?

Schlumberger has opened the results of its research on minerals and oil reserves to outside experts, which often creates new perspectives regarding the ideal locations to drill new wells. In the oil sector, Statoil (Norway) is developing and sharing new practices in deepwater exploration. The industry as a whole should consider sharing information on safer, environmentfriendly drilling technology. Brazil has vast offshore reserves to develop and it is fundamental that its oil industry utilizes the best know-how available for this process.

Is open innovation an irreversible trend? Can a company survive in the 21st century without using its resources?

The fundamental insight to understand open innovation is that in this day and age, there is useful knowledge, capable of being utilized, distributed throughout the world. And no company or country, regardless of size or efficiency, is capable of aggregating all this knowledge on its own. Consequently, I believe that open innovation is inevitable in most of the capitalist countries. We all need to connect with people who can contribute to our knowledge, wherever they might be.

What are the benefits – and potential risks – to companies in emerging countries, such as Brazil, who opt for open innovation?

The greatest challenge that I can see for Brazilian companies is that historically, they have always been very closed by nature.

A new attitude, one that appreciates openness and the sharing of knowledge, will be necessary. But there are also risks. One

Photo: Courtesy of Berkeley University

Open innovation is a relatively new concept. But even before it appeared, various companies were already applying it, right?

Yes, open innovation already existed before I published my book.

But many of the companies named in the publication admitted that my work had helped them to understand and articulate what they were doing, both for training purposes and for external communication. The trend has really taken off over these last eight years.

GLOBAL CHALLENGE

26|27

What’s

next?

T

hese days, open innovation is practiced, with suitable rules and adaptations, in almost all sections of industry. The debate revolves around the manner in which each company interprets innovation and its capacity to absorb new concepts.

Example: without the so-called knowledge economy, it is impossible to be open to innovation. The increased value given to specialized knowledge and the educational standards of the workforce at the present stage of industrial capitalism has transformed knowledge into a valuable currency on the so-called “knowledge markets” operated by companies such as NineSigma (USA), which help identify professionals capable of resolving challenges related to innovation for giants, such as Philips and Xerox.

Intimately linked to open innovation, there is also the concept of crowdsourcing, whereby a challenge (technological or otherwise) is presented in an open manner, to be solved by a large group of people from various fields. The “crowd”, which is organized using the Web 2.0 tools (including social networks and online collaborative projects), participates in the analysis of the alternatives presented. The most relevant and innovative contributions are gathered and used in its solution. Once the matter has been resolved, the member – or members – of the group submitting the most satisfactory solution is usually compensated, either monetarily or by the satisfaction derived from the recognition of his work.

Throughout the world, the importance of consulting firms specializing in advising corporations, particularly the big

players, is growing within this new environment – one that not only demands changes in working practices, but also in management attitudes. It is possible, for example, to hire a firm such as IdeaConnection (Canada) to act as broker between a company faced with a specific challenge and a supplier willing to provide a solution (the customer only pays if 100% satisfied). Or to contract the services of Brightidea (USA), which organizes innovation contests for companies such as GE and Cisco.

“There are several routes. Some initiatives start and don’t finish, others change their course or become influenced by the discoveries of competitors. All this must be monitored, whether the process was initiated by an idea from within the company, from an outside idea or a combination of both”, explains José Paulo Silveira, associate director of Macroplan, which provides open innovation consultancy services to Eletrobras, Petrobras and Suzano, among other companies, and to public institutions in Brazil, such as Embrapa (Brazilian Agriculture and Livestock Research Company), CNPq (National Council for Scientific and Technological Development) and Apex (Brazilian Export and Investment Promotion Agency).

Silveira notes that Brazil is currently putting an increasing value on open innovation as a competitive tool. “Studies carried out by institutions such as Ipea (Institute for Research on Applied Economics) show that the firms that innovate more have the greatest share of the worldwide revenue within their sectors and the greatest commercial success. And, by using open innovation, it’s possible to innovate more, with less resources”, he concludes.

_Mauro Segura Engineer and postgraduate in marketing and communications. Segura is currently head of Marketing and Communications for IBM Brazil and has more than 20 years experience in his chosen field. He regularly publishes texts on those subjects on the following blog: http://aquintaonda. blogspot.com. IBM Corp was named amongst the world’s 10 leading companies for its efforts to encourage and promote diversity on a global scale, in a survey carried out this year by DiversityInc (USA).

Some weeks ago, during a business meeting, I heard the following phrase: “We all love a pine forest. Everyone the same, not creating problems, thinking alike...”

by MAURO SEGURA

In general, in our minds, innovation appears to occur almost by chance.

Imagine that all of a sudden someone has a brilliant idea and everything just falls into place. This may even be true, but many companies have found that this is not attributable merely to chance. Innovation is the result of processes, focus and corporate culture. The development of a continuous sense of innovation among their collaborators appears to be a priority for the majority of companies these days, regardless of size or the specific sector in which they are involved. Genuine and continuous innovation in the workplace requires certain basic preconditions, one of which is diversity – diversity in its widest sense. I am referring to diversity of thinking, behavior, education, age, experience, color, race, sex and culture.

Usually, companies adore “pine forests”. We rarely find examples of groups whose principal projects and corporate strategies are truly diverse.

Consider the organization that you work for. The higher you climb the organizational pyramid, the more evident the “pine forest” mindset becomes. Ironically, we find the least diversity in conceptual thinking at the top of the hierarchy. Companies don’t recognize this, but this in fact appears to be the main barrier to a genuine culture of innovation.

However, diversity alone serves no purpose if not accompanied by an open organizational environment that encourages the exchange of ideas.

The image of the Disney’s character Gyro Gearloose, singularly having a flash of inspiration, is entertaining, but an illusion. Innovation arises from a healthy conflict of opinions, experiences, visions and perspectives.

The greater the plurality and interaction between people, the greater the probability of the emergence of innovative thoughts.

Unanimity in itself almost always leads us back to the same place.

For companies in an increasingly competitive and disruptive market – where new business models and

creative competitors seem to appear all the time – the ability to innovate is no longer simply a question of beating the competition. It is a matter of survival. One company’s innovatory skills can be put to their best use in an environment of spontaneous collaboration between people from differing schools of thought, willing and able to speak out and voice their opinions, almost as if they were socializing over a few beers at the end of the working week. Companies are beginning to realize that this freedom to converse is important. Bringing together heterogeneous groups from both inside and outside the company is a healthy way to oxygenate the organization and discover opportunities for innovation at all levels, from the rearguard to the front lines of its business activities.

Photo courtesy of IBM

IN DISCUSSION

we all love “pine forests”

28|29

In order to sustain the impressive rate of economic development achieved over the last few years, Chile intends to increase its energy production and develop a more diversified and greener energy matrix. By supplying it with biofuels, Petrobras is helping the country to meet these challenges

AROUND THE WORLD

video_ Watch the video at www.petrobras.com/magazine

The city of Santiago, with the Andes mountain range on the background.

The picture was taken from the Cierro San Cristobal, a hill that is one of the most visited tourist spots of Chile’s capital city

BY marco antonio barbosa // PHotos stefan hess

30|31

t the beginning of June, the Austin Ratings risk classification agency, specialized in identifying markets that represent the best investment opportunities on a global scale, disclosed the results of a survey that appointed the countries with the best economic performance ratings for the first quarter of 2011. Chile topped the list, above China, India and the other emerging Asian countries, with a 9.8% increase in Gross Domestic Product (GDP) over the same period in 2010.

Exports Chile needs more energy to sustain its impressive rate of industrial growth. The food processing industry (particularly companies involved in salmon fishing and production), and the timber and mining sectors have evolved the most over the last few years. Among the commodities, copper tops the list. Chile is the world’s largest producer of that semi-precious metal. Regarding the foreign trade, 45% of the country’s exports are high aggregate value items. Wine, pulp, methanol, chemical products and agricultural supplies are the mainstays of its export market..

This is merely one among many of the countless examples of the South American country’s impressive growth over recent decades. Figures such as Chile’s average GDP increase of 6% per annum over the last fifteen years can only be achieved by continuous investment in infrastructure and energy production.

In February, the President of the nation, Sebastián Piñera, declared that if Chile intended to sustain this level of growth it would need to double its energy capacity. The economist Ricardo Matte Eguiguren, former director of the Programa Económico de Libertad y Desarrollo (Economic Program for Freedom and Development), an NGO that produces socioeconomic studies, states that: “The big challenge is to ensure that the growth rate is sustainable and capable of transforming Chile into a developed country”.

At the same time, the effort to diversify its energy matrix is an urgent necessity.

According to the most recent figures, published in 2010 by the National Energy Commission (CNE),

an offshoot of Chile’s Energy Ministry, the country’s energy generating capacity, amounting to some 58,257 gigawatt-hours (GWh), is basically derived from coal and oil (42%) and water sources (36%). The demand for energy has doubled each decade since 1970. Around 63% of country’s energy expansion projects involve the use of thermoelectric plants – and, among these, 95% will be coal-based. Furthermore, Chile is dependent on external sources of hydrocarbons, such as oil and natural gas.

In the government’s view, this situation has got to change.

Petrobras, which is involved in fuel distribution in Chile in the retail, industrial and aviation sectors, is aware of the necessities within the country’s energy sector. The company hopes to help the country to achieve a more diverse and greener energy matrix through implementation of projects involving biofuels. “Our intention has always been to go beyond the supply of energy. We have invested in the energy source and the fight against pollution in the main cities, particularly Santiago. The capital, due to its geography, is one of the cities most affected by this problem”, says Otavio Cintra, president of Petrobras Chile.

Biodiesel and ethanol are among the fuels on which Petrobras is staking its future in Chile. Through its Etanol: Energía + Limpia (“Ethanol: Cleaner Energy”) Program, launched in June 2010, the company conducted a pioneering series of tests with vehicles equipped with flex-fuel engines using ethanol as the fuel source. Meanwhile, B5 diesel fuel (containing 5% biodiesel) has been in use since May by Santiago’s public transportation services. The so-called Ecological Bus that runs between the districts of Providencia, Ñuñoa, Macul and San Joaquín (in Santiago’s metropolitan region), emits less pollutant particles, running on a mixture of soy biodiesel and A1 diesel.

The initiative was the result of an agreement signed last December between Petrobras Chile, Scania (heavy vehicle manufacturer) and Alsacia, Santiago’s public transportation concession operator.

Even more innovative was the inauguration, in April, of a refueling station for electricpowered vehicles, the first of its type in Latin America capable of providing rapid recharge services. With its 30-minute charging time, this station (referred to as “electrolinera”

A Full Tank The “Ethanol: Cleaner Energy”Program ran two vehicles, a car and a pickup, exclusively on ethanol for a period of almost one year between 2010 and 2011.

It was the first time that vehicles running on biofuels had been driven on the roads in Chile. The tests, carried out in partnership with General Motors, took place under a variety of temperature, altitude and load conditions.

The Chilean capital, all lit up: the country needs to increase its energy production

AROUND THE WORLD

32|33

Future Prospects In addition to the projects introduced by Petrobras involving biodiesel and ethanol, government and private sector initiatives to diversify Chile’s energy matrix include investment in the development of other cleaner energy sources that produce less dependence upon non-renewable resources. According to the Fundación Imagen de Chile, there are plans to build wind farms capable of producing 500MW, on the coastline of the Atacama, Coquimbo and Maule regions. Also in the North, the potential use of solar energy (estimated as one of the most promising in the world by UN-Energy, the United Nations energy agency) should be emphasized.

An investment amounting to US$ 1.3 billion will be made by 2012, to install a photovoltaic power plant capable of generating 100MW in the Copiapo region. Biomass energy – in this case, biogas extracted from garbage dumps – is used to supply piped gas to households in big cities, such as Santiago and Valparaíso. Meanwhile, in Antofagasta, in the North of the country, research into geothermal energy projects is currently underway.

Chile’s Environment Minister, Maria Ignacia Benitez, told Petrobras Magazine that the country is ideally suited to the development of unconventional renewable energy sources. “Not only do they help us further diversify the energy matrix, they also help to reduce emissions”, she states. “It is a challenge to produce all the energy that Chile needs while always complying with environmental preservation requirements. But we have climatic and geographical characteristics that facilitate our search for alternative sources”.

According to the Chilean government, Petrobras is making an important contribution in the transition to a more sustainable future. “The company’s statements on sustainability have been translated into concrete actions”, says the minister. “Projects such as the Ecological Bus and the inauguration of the ‘electrolinera’ reinforce the government’s environmental preservation initiatives and position Chile as a nation that supports energy efficiency and the fight against pollution”.

by the Chileans) can guarantee autonomy of 130 kilometers for electric engines. In comparison, a traditional recharging station can take anything up to three and a half hours to fully recharge an electric vehicle. “We are aware of the local energy problems and believe that, with our experience and our leading position in Latin America as a sustainable company, we can be of great help to the country”, says Cintra.

Petrobras has been increasing its presence in Chile in recent years. As a result of its purchase, in 2009, of ExxonMobil’s participation in Esso Chile Petrolera, the company now has a 16% stake in Chile’s retail fuel market and a 7% stake in its industrial market. Petrobras has a network of 230 service stations in the country, as well as seven distribution terminals (four of its own and three operating on a joint-venture basis).

“This is one of the most stable and profitable markets in South America. The country has a well-developed distribution system that facilitates the introduction and trial of the company’s new products and services”, says the CEO of Petrobras Chile.

Petrobras’ expansion in Chile is benefitting from the excellent state of the Chilean economy, ideal for investment in its various sectors. Having introduced a series of measures to reduce tariffs and eliminate trade barriers to facilitate productive activities, Chile has left its former role as an agricultural producer behind and is becoming increasingly industrialized. The Chilean economy has been named the most competitive in Latin America by the World Economic Forum (and the 30th most competitive country in the world ranking). In addition, the country has a stable democracy and currently possesses the best social indicators and most evident signs of prosperity in the Southern Cone (geopolitical region in the south of South America), according to the UN Human Development Index.

VOLTA AO MUNDO

34|35

Petrobras’ contributions for the diversification of Chile’s energy matrix. In the picture above, the “bus ecológico”, which runs on 5% biodiesel. At the other page: the “electrolinera”, which is capable of recharging electric cars in 30 minutes

Chile’s Energy Matrix Total Annual Consumption

Total Installed Capacity

14.878 megawatts Biomass Wind

1% 1%

Hydraulic

36%

Oil

Projects under construction for the expansion of energy capacity

16%

355.259 teracalories

Oil products

Electricity

Natural gas Coke Natural Gas

29%

Others

1.044

Thermal (coal and diesel)

51.170

1.943

47.969

Biomass

24.614

300 000

Oil products

200 000

32%

is produced

internally (data from 2008)

Wind

20

8.996 3.040

Data from 2008

Total:

Evolution of the country’s energy consumption (in teracalories) Total

by Chile comes from external sources

97

43.695

Coal

17%

Hydraulic

175.775

Firewood

Coal

(in megawatts)

68%

of the energy consumed

3.104

The most recent survey by the National Energy Commission shows the country consumed tons of oil in 2008.

The transport sector is 1.428.000 responsible for tons more than half of this consumption:

2.767.000

1 00 000 0 1978

1 98 8

1 998

2008

Source: "Antecedentes sobre la matriz energética en Chile y sus desafios para el futuro", paper published by the Chilean Minstry of Energy

petrobras magazine 35

chain reaction Petrobras’ growth stimulates its production chain and boosts the energy sector’s economy in Brazil and abroad

W

ith a Business Plan projecting investments of US$ 224.7 billion between 2011 and 2015 and the greatest growth perspective within the world’s energy sector, Petrobras is placing ever-increasing demands for products and services upon the suppliers of its production chain. Nowadays Petrobras’ chain of direct and indirect suppliers comprises about twenty thousand companies. And the trend is for this number to increase even further: the company plans to increase its total oil and gas production, leaping from the current 2.7 million barrels of oil equivalent per day (boed) to 4 million in 2015 and 6.4 million in 2020.

More than half of the overall Business Plan investment (US$ 127.5 billion) will be destined for oil and gas exploration and production projects in

Brazil, with US$ 53.4 billion investment in the pre-salt operation. One of the companies participating in the development of exploration projects for the pre-salt layer is Engevix, involved in the energy sector since 1965. Based in the state of São Paulo, the company is currently building eight identical FPSO (Floating, Production, Storage, and Offloading System) hulls vessels capable of producing, storing and offloading oil, to address the demand of the Petrobras pre-salt operations in the Santos Basin. This is the first time in the world that a company has commissioned the simultaneous construction of eight vessels of this size.

This serial production of “replicants”, as they are known, will fasten the building process whilst also reducing costs.

To develop the project, Engevix is using the Rio Grande shipyard, in the state of Rio Grande do Sul. This shipyard covers a total built-up area of 440,000 square meters and will house the largest dry-dock in Latin America. “This FPSO project alone will create five thousand direct jobs

Petrobras’ investments

BILLION

US$ 1,100 and US$ 1,300

is the total investment projected by Petrobras in its 2011-2015 Business Plan

per second over the next five years

For comparison purposes, this is a value that exceeds Portugal’s GDP

The Pre-salt Exploration and Production operation alone will receive investments totaling

US$

127.5

53.4 BILLION

(57%) of the total

223.7

2%

CURRENT

US$

BILLION

US$

Business

224.7

This amount means that Petrobras will invest between

The new plan forecasts that the pre-salt contribution to Petrobras’ production will increase from

will be destined for the Exploration and Production segment

18%

2015

40.5%

2020

BY ANDRÉIA GOMES DURÃO / INFOGrAPHICS Gabriel Gianordolli

US$

36|37 44|45

BILLION in 2010 This value represents an increase of

Research and Development (R&D)

US$

4.6 BILLION

US$

Extension of current refining facilities

US$

35.4

BILLION

8.7 BILLION

in relation to the previous Business Plan.

Biofuels

US$ 4.1 BILLION

Other

important projected

investments: Extensions to gas-fired generating plants and fertilizer plants

Health, Safety, Energy Efficiency and the Environment

US$ 9 BILLION

US$ 4.2 BILLION Distribution

US$ Source: Petrobras Business Plan 2011-2015

3.1 BILLION

The deepwater discoveries off the coast of Brazil represent

1/3

of all the world’s deepwater discoveries over the last five years.

Over the last 30 years, Petrobras has increased its production by an average of

10%

every year

Photo: Paulo Arthur / Petrobras Image Bank

BrasFELS Shipyard, at the state of Rio de Janeiro: on full activity, thanks to the impulse that Petrobras has been given to Brazil’s naval industry

and a further fifteen thousand indirect jobs”, says Daniel Peres, Engevix vice-president.

jobs during the operational lifetime of these vessels. Roberto Gonçalves, Petrobras’ executive manager of Engineering, explains how the stimulus to Brazilian companies works in practice: “We establish a percentage of the content to be produced in Brazil in our contracts, and by doing so, we are creating a market. The companies begin to produce, internally, goods that they had previously bought overseas”.

This pioneering project is The a part of a greater whole: the revitalization of Brazil’s shipbuilding industry. The President of Petrobras, José Sergio Gabrielli de Azevedo, are keen to work in emphasizes, “Brazil’s shipyards, which accounted for 2,000 jobs five years ago, currently with Petrobras” account for fifty-eight Roberto Gonçalves, thousand. And a large part The possibility of working in of that is due to Petrobras”. partnership with Petrobras Petrobras’ executive In 2010, the company fleet also raises interest abroad. manager of Engineering consisted of 190 ships, either “Our investment plan is known owned by the Company itself throughout the world and or chartered, as well as 240 support vessels and international companies are keen to gain a foothold drilling units. By 2017, a further 88 vessels should be in the market in partnership with Petrobras”, says delivered, providing more than thirty thousand direct Roberto Gonçalves. One example of an overseas and indirect job opportunities, besides two thousand company willing to invest in this approach is the

international companies partnership

companies still to be contracted

Photo: Courtesy of NKT

Construction of the hulls

Engevix's initial investment on the project will amount to

There will be created

R$ 400 million;

5,000 direct

(and other 15,000 indirect)

The embarking of cables produced by NKT Flexibles: Module the Danish company will construction build a factory in Brazil

other

R$ 300 million

jobs with the building of the ships

are expected to be apported on a posterior phase

The company expects to double its anual revenue, getting to

R$

in 2011 3 billion

ENGEVIX

8 identical FPSOs will be produced, each one capable of producing, daily:

Danish NKT Flexibles, a specialist in flexible structures for deepwater operations. The company is about to inaugurate a factory in Brazil – the first outside its homeland in more than a hundred years of existence. The Brazilian branch, which will benefit from an investment of US$ 200 million and create at least 400 direct job opportunities, will not be merely an industrial plant located nearer to its client. NKT’s regional representative, Marcos Villela, explains that the unit will be an optimized installation, with its own exclusive equipment, geared to develop structures not produced in Denmark, enabling it to create more complex products from carbon-fiber reinforced polymers. “This new plant will represent the cutting edge in our sector”, states Villela.

The scale of Petrobras’ investment plan and the complexity of its new projects also attract other companies not directly related to the oil and gas production chain. Specialized in products and services relating to the supply and treatment of water, effluents and residues, Perenne has invested almost R$ 2 million annually, since 2006, in the hiring and

me

NKT

Flexibles NKT Flexibles will provide

700

kilometers of flexible lines to Petrobras

1,3 billion

euros:

that's the value of the contract (valid for four years), signed with Petrobras For the first time ever, NKT will produce flexible structures capable of operating on ultra deep waters up to

3,000 meters

Source: NKT

m

Valor (em R$ bilhões)

1500

100

1200

80

900

60

600

40

300

20

0

0 2004 2005 2006 2007 2008 2009 2010

Photo: Courtesy of Perenne

Contratos

O plano de negócios da Empresa prevê aportes de

US$ 108,2 bilhões em exploração e produção até 2014, dos quais

US$ 57,8 bilhões serão direcionados à indústria nacional

PETROBRAS

50%

The technician operates a Perenne’s equipament: the company is specialized in the treatment of water and residues

training of personnel and acquisition of equipment to comply with Petrobras standards. “We were hired in 2008 to develop the engineering project for two sludge dryers for the Henrique Lage refinery (in São José dos Campos, in the state of São Paulo) – a world first. We blended the conceptual project of an Italian company, designed the engineering in Brazil and faced many challenges. Now we are looking forward to the completing the assembly of the system to assess the results”, explains Nelson de Oliveira Guanaes, Perenne’s CEO.

of Perenne's services are allocated to

Petrobras’ projects

Source: Perenne

PERENNE Due to the increased demand, the company has been expanding its workers headcount throughout the last five years

(from 66 to 151) PERENNE'S ANNUAL GROSS REVENUE WENT FROM

R$ 11 MILLION TO

Looking forward to strengthen and expand even more its supply chain, Petrobras participates in programs that assist companies to obtain finance and improve their training of personnel. One such program is the “Programa Progredir” (“Moving Forward Program”) initiative, through which the company acts as an “anchor” to assist suppliers to obtain credit from financial institutions and the BNDES (National Bank for Economic and Social Development).

“Programa Progredir” was launched in June this year and fifteen companies have already obtained finance through it, to the tune of US$ 85.2 million.

R$ 80 MILLION

Construction of the hulls

companies still to be contracted

companies still to be contracted

Module construction

Plataform integration

Engevix's initial investment on the project will amount to

There will be created

R$ 400 million;

5,000 direct

(and other 15,000 indirect)

other

R$ 300 million

jobs with the

are expected to be apported on a posterior phase

building of the ships

The company expects to double its anual revenue, getting to

R$

in 2011 3 billion

ENGEVIX

8 identical FPSOs will be produced, each one capable of producing, daily:

6

million

of cubic meters of gas

150,000 barrels of oil

Source: Petrobras and Engevix

Along similar lines, the National Program for Mobilization of the National Oil and Gas Industry (Prominp), created to increase the participation of Brazilian industry in the implementation of projects within the sector, is another important initiative. Coordinated by the Ministry of Mines and Energy, Prominp focuses on actions that encourage NKT technological development andFlexibles professional

qualification. Petrobras is a member of the Prominp Steering Committee, which offers free training courses for 175 professional categories within the energy sector. By the close of 2010, the Program had qualified seventy-eight thousand individuals for positions in the oil and gas industry and identified the need to qualify a further two hundred and twelve thousand by 2014.

NKT Flexibles will provide

700

Investment to the kilometers fore of flexible lines to Petrobras

In order to achieve the objectives specified in its 2011-2015 1,3 billion Business Plan, the world’s largest within the energy sector, Petrobras continues to rely oneuros: its own cash flow as the that's the value of the contract for four years), principal financing means of(valid investment.

For the first time signed with Petrobras ever, the Company also expects to introduce a divestment For the first time ever, NKT will produce program amounting to US$ 13.6 billion, aiming to increase flexible structures capable of operating profitability and the efficiency of its asset management. on ultra deep waters The additional resources required by the plan will up beto ,000 obtained by financing from sources in Brazil and abroad. meters There are no plans for a further share issue.

3

The net financing requirement for the projects, excluding amortization, translate into an annual average of between US$ 7.2 billion and US$ 12 billion, according to the scenario

used in the analysis. Committed to maintaining its investment classification, Petrobras is keeping its average financial leverage target of 25-35%, and a maximum limit of up to 2.5x for its net debt indicator.

The targets of the plan were set having considered the positive state of the Brazilian economy, with the vigorous growth in the demand for oil products and the upward curve of the company’s production. Other variables influencing cash flow projections are: barrel price of Brent oil, average reference price of products sold by Petrobras, percentage of investments carried out, operating costs and exchange rates (average R$ 1.73/US$). Having considered all the variables, Petrobras intends to achieve a post-dividend cash flow from its operational activities of between US$ 125 billion and US$ 148.9 billion for the 2011-2015 period.

40|41 Business

Replicant FPSOs: project and production

emissions management Greenhouse effect, global warming, climate change: governments and citizens are already facing these challenges. As an energy company, Petrobras is closely monitoring these issues and takes them into account when making decisions.

Since 2005, climate change has been incorporated into Petrobras corporate strategy. The company has adopted a series of measures to maximize its energy efficiency and to reduce the intensity of greenhouse gas emissions.

2

Technology

Petrobras has created two programs to develop and implement technological solutions, such as the capture, transportation and geological storage of CO2, to mitigate emissions in the company’s processes and products: >PROCLIMA - Climate Change Technological Program; >PROCO2 – CO2 Management Technological Program, intended to address the pre-salt challenges.

US$

30

MILLION

was invested between 2006 and 2009 in the field of carbon sequestration and climate change and a further

US$

200

MILLION

will be invested in the 2010 – 2015 period.

Petrobras voluntarily undertook to avoid the release of CO2 from its pre-salt operations into the atmosphere, prior to the issue of any regulations to that effect.

1 Emissions Inventory

SIGEA®, the Atmospheric Emissions Management System, integrates all the Company’s activities. The emissions of all equipment emitting greenhouse gases are measured, regardless of size or power. The values are calculated on a month by month basis to highly precise levels, as required for decision-making purposes.

7 CONPET,

the Brazilian Program for the Rationalization of Use of Oil Products and Natural Gas, a Federal Government initiative coordinated by Petrobras, assesses the level of black smoke emitted by diesel vehicles and runs educational activities for drivers to encourage fuel economy throughout Brazil.

3

US$

1 BILLION

will be invested in energy efficiency projects with a further US$ 200 million investment in R&D. Created in the 1970s, the Energy Conservation Internal Program aims to reduce the consumption of electricity and fuel in all of the company’s facilities.

In the last five years, the program has achieved a saving of almost

3

THOUSAND BARRELS

of oil equivalent per day.

4 Flaring Reduction Petrobras has invested

US$

A further US$

200

322

in its Program for Optimization of the Use of Associated Gas (POAG), intending to reduce the burning off gas by flaring. Principal actions: > increase the use of natural gas on the new platforms; > adjustment of operational variables on existing platforms to minimize the burning of gas.

will be invested in the program between 2010 and 2015. Petrobras’ target is to achieve a 65% reduction in the intensity of the burning of natural gas and flaring in exploration and production operations by 2015.

MILLION

5

MILLION

Biofuels

Petrobras expects to invest

US$

4.1

BILLION in biofuels between 2011 and 2015. In addition to contributing to the mitigation of climate change, the initiative is aligned with the company’s strategy to support sustainable agricultural production and family farming.

6 Support for Social Initiatives

Petrobras sponsors projects aimed at the conservation of natural resources and the increase of the ecological awareness, through the Petrobras Environmental Program.

It intends to invest

The sponsored projects will prevent the emission of up to

92.7 MILLION

tons of CO2.

US$

250 MILLION in the program by 2012.

Since the 1970s, Petrobras has been involved in the various stages of the industrial production and distribution of ethanol, through the National Ethanol Program (Proalcool), which enabled Brazil to avoid the emission of

800 MILLION

tons of CO2 between 1975 and 2007.

HOW IT WORKS

In 2010, Petrobras committed itself to maximize its energy efficiency. Targets for 2015: > Reduction of the energy intensity in refining operations and on the thermoelectric plants operations of 10% and 5%, respectively; > Reduction in the intensity of emissions of greenhouse gases in the operations of E&P, refining and thermoelectric plants of 15%, 8% and 5%, respectively.

In order to achieve these goals, approximately

42|43 infographic GABRIEL GIANORDOLI

Energy Efficiency

vapor from the Amazon Rainforest to the interior of Brazil – are being studied in a pioneer project that brings together adventure, science and education

Photo: Stefan Hess

Flying rivers – currents of air that carry water

ENVIRONMENT

video_ Watch the video about the project on www.petrobras.com/magazine

by marco antonio barbosa // photos stefan hess / MARGI MOSS // infographic GABRIEL GIANORDOLI

44|45

air sailing on

Gerard Moss aboard the plane that follows the air streams loaded with humidity

“The flying rivers transport water molecules through the air, carried on winds from the Atlantic Ocean, that enter the Amazon Forest and circle around it. Then they curve round towards the Midwest and the South of Brazil. “From there, they can get as far as Argentina”, explains Pedro Leite da Silva Dias, a professor at the University of São Paulo’s (USP) Institute of Astronomy, Geophysics and Atmospheric Science and one of the scientific coordinators of the Flying Rivers project (Projeto Rios Voadores). Since 2007, science – by

A snapshot of a precipitation over the region of Alto Araguaia (state of Mato Grosso)

Always moving “Life is short. It’s no use standing still”. That is the motto of the pilot Gerard Moss, who, alongside his wife, the Kenyan Margi, unites his love for traveling with his declared passion for nature – and its conservation. Born in Switzerland and living in Brazil since 1982 (having passed through Hong Kong, the USA and Australia), Moss became famous for completing two round-the-world flights piloting his own airplanes: a single engine aircraft in 1989 and a motorized glider in 2001. Two years later, he initiated the Brasil das Águas (“Brazil and its Waters”) project, also sponsored by Petrobras. Between October 2003 and December 2004, he covered more than 120,000 kilometers in an amphibious aircraft, collecting water samples from rivers and lakes across all the regions of Brazil. Once analyzed, the material made it possible to identify environments where the waters were as yet uncontaminated, an information that is fundamental to their conservation. “Water is important, it comes from afar, and it’s expensive..... and one day it will be in short supply”, warns the aviator.

Photo: Margi Moss

erard Moss, the helmsman, turns the vessel a few degrees to port. A small course adjustment and we reach the main current of the river. This is a basin of sizeable rivers: some can be up to 800 kilometers wide.

The engine (at the bow, not at the stern as one might expect) makes a lot of noise, making conversation difficult in the craft. Everything around us is blue and white, colors that also adorn our ship. The blue of the sky and the white of the clouds, given that we are at an altitude of almost 3,000 meters. Our “craft” is the single engine plane PT-RXE (Romeo), piloted by our “helmsman” Moss. The “current” in question is an flying river – an atmospheric watercourse, invisible, which carries through the air humidity and water vapor from the Amazon Basin, in the north of Brazil, to other points of the country. And the mouth of this river has a decisive influence on the climate, rain and humidity, as it empties into regions thousands of kilometers away.

ENVIRONMENT

Photos: Margi Moss

Flying his baloon (picture above) or his single-engine plane (to the right), Moss sees natural landscapes oblivious to most Brazilians

means of the National Institute for Space Research (Inpe) and the laboratories of the Center for Nuclear Energy in Agriculture (Cena) at USP – have sought to study and explain this phenomenon by joining forces with aviation, personified by Gerard Moss, a pilot with two round-the-world flights (piloting his own single-engine planes) to his credit and responsible for conceiving and carrying out various environmental projects.

Moss sums it up precisely: “Flying rivers are imaginary, but the water within them is very real”.

To “sail” through the flying rivers on Moss’ plane allows meteorologists and others interested in climate change to understand how water condensation in the Amazon region influences the formation of rain in

46|47

the South and Southeast of Brazil.

Three quarters of the rain that falls in Amazon is returned to the atmosphere in the form of vapor, along with the evaporation from rivers and trees. Carried on the trade winds, predominant in the summer, this water travels south, forming the flying rivers. As soon as the Inpe technical personnel determine that the conditions are ideal to follow the course of one of these virtual rivers, Moss takes off from his airbase in Brasilia. The trip can be made by plane (during the summer, when the flying rivers are better formed) or by balloon (in the autumn or winter, to study the air masses standing over the forest).

“The aerial campaigns last between seven and ten days.

The flights are planned in order

to follow the movement of the flying rivers”, says Moss. The plane flies at an altitude between one and three thousand meters.

A filter sucks up the outside air, laden with moisture. Inside glass tubes, it is cooled until it condenses, under a temperature of -78 degrees Celsius, forming droplets of water in a liquid state.

Back on the ground, at the Cena laboratories in Piracicaba (SP), the samples brought by Moss are re-vaporized and analyzed.

“We knew nothing about the composition of this vapor. Chasing an air mass while it moves across the continent is an adventure that provides very relevant information”, says researcher Marcelo Zacharias Moreira, who, at Cena, is attempting to unlock the DNA of the vapor collected by

In its initial stage, the project involved 12 aerial campaigns, mainly crossing the states of Pará, Amazonas and Rondônia and the biome of the Pantanal (“Swampland”), in the states of Mato Grosso and Mato Grosso do Sul. A single voyage along the full extent of a flying river stretched 3,800 kilometers, from Belém in the state of Pará to the capital city of the state of São Paulo. More than 500 samples were obtained, between 2007 and 2009.

Professor Enéas Salati, a veteran Cena researcher, is the author of 150 scientific papers on environmental questions, water resources and impacts on the climate attributable to human activity. He is also one of the persons responsible for conceiving this successful method of analyzing the composition of flying rivers.

According to him, the priority now is the development of the second phase, consisting of events, lectures and visits to public schools in the cities of Brasília (Federal District), Chapecó (state of Santa Catarina), Cuiabá (state of Mato Grosso), Londrina (state of Paraná), Ribeirão Preto (state of São Paulo) and Uberlândia (state of Minas Gerais). These cities are located in different Brazilian regions where the phenomenon formed in the Amazon region influences the quantity and quality of the rainfall. Moss and the project team take part in presentations on the flying rivers, in addition to coordinating training workshops

Photo: Margi Moss

Moss: to establish where those water molecules came from, where they are going and what is their chemical characteristics. “The samples we collect serve to confirm important theories. A single large tree can evaporate one thousand liters of water per day. Where does it go? All that water could end up as rain in the city of São Paulo”, speculates the pilot.

Water and climate, a fundamental duo Petrobras’ interest in projects such as the Flying Rivers initiative forms part of a more wide-reaching plan. The most recent edition of the Petrobras Environmental Program, with the theme of “Water and Climate: contributions for sustainable development”, supports projects

by NGOs focusing on the study and preservation of Brazilian lakes, rivers and seas and the nature that depends on those ecosystems. The Company’s investment in voluntary environmental conservation initiatives is growing: it leapt from R$ 17 million in 2004, to R$ 257.7 million last year. Projects such as the “Águas do Cerrado” (“The Waters from the Cerrado”; “cerrado” is a tropical savanna ecoregion found in Midwestern Brazil) initiative, which recovers rivers and streams in the interior of the state of Goiás, and the “Lagoas Costeiras” project (which studies the coastal lakes of the state of Rio Grande do Sul) reflect the importance of the theme to Petrobras. “We invest in initiatives from all regions that contribute to the promotion of sustainable development”, says Rosane Aguiar, manager of Petrobras Environmental Programs.

for public school teachers. During these, they explain the phenomenon and speak of other matters relating to climate and the hydrographic and meteorological conditions in Brazil, as well as distributing pedagogical material for classroom use.

“It’s important to bring together various institutions and research centers, but it’s also fundamental that we connect with society”, says Salati. For the researchers, making people aware of the existence of flying rivers may help preserve nature.

Efforts against deforestation would be intensified if people understood that cutting trees in the Amazon can reduce the quantity of evaporated water in the flying rivers. The same evaporated water that would be capable of producing humidity and rain at other locations and influencing the climate in far-off regions. The researchers’ current priority is to try and understand how much of the vapor carried by these flying rivers ends up as rain falling in the South and Southeast of Brazil.

This union between science and adventure provokes great interest among children. “Anything I can’t resolve with today’s technology, may be solved sometime in the future, by a child who is learning about the phenomenon now”, says Salati.

The use of education to encourage the environmental preservation is also supported by the Petrobras Environmental Program. “The company has sponsored the project since its inception and believes that initiatives such as this contribute to bring important matters such as climate change to people’s attention.

The chosen tool is environmental education, an activity inherent to all the projects sponsored”, confirms Rosane Aguiar, manager of Petrobras’ Environmental Programs

The Flying Rivers 1

The intense heat in the Equatorial Atlantic region causes increased evaporation and loads the winds with humidity.

1 2

3

In Amazon, water is given off by the ground and plant life in the form of evapotranspiration along with further condensation due to the humidity. The region winds shape the course of the flying rivers.

2

4

Moving west, the vapour approaches the Andes.

Blocked by the mountains, it circles back over Amazon.

3

5

4

5

6

Part of the humidity falls as rain, forming the rivers of the Amazon Basin.

The flying rivers carry the accumulated humidity to the interior of Brazil, causing rain to fall in other regions.

The concentrated humidity arrives in the south and southeast of Brazil, reaching as far as Paraguay and Argentina before dispersing.

The flying rivers that form along the full length of the Amazon River release

6

17 TRILLION

litres of water into the Atlantic Ocean every day A single tree with a ten-meter canopy discharges up to

300 LITRES of water per day into the atmosphere

10 Water vapor carried by atmospheric circulation can cover great distance in excess of

1000 km.

It is calculated that there is a total of

1.4 SEXTILLION litres of water

on the planet, which is constantly renewed by the hydrological cycles

In all, the trees in the Amazon region are responsible for the evapotranspiration of

20

On average each water molecule remains

in suspension for

10 days before falling to the ground again

TRILLION litres of water every day

The hydrological cycle

Evapotranspiration in areas covered by forests is

4

times greater

than that in pasture land or deforested areas.

Trees also assist in carbon capture and the absorption of atmospheric CO2 by the oceans

evaporation from the land

precipitation on the land

evaporation of surface water

impermeable layer

water table

Source: Flying Rivers Project (Projeto Rios Voadores)

505

TRILLION litres of water

evaporate from the oceans.

Out of this total,

95% returns to the sea in the form of rain;

5% (25.25 trillion litres of water) are carried to the continents

atmospheric humidity over terra firma

interception and transpiration from vegetation and ground

surface run-off

Every year some

evaporation of the ocean

precipitation over the ocean

surface flow

movement of subterranean waters

infiltration subterranean streams

ocean intrusion of salt water

Irrefutable

passion Soccer, the world’s most popular sport, mobilizes billions of fans and involves entire nations in international competitions – a fascination that also drives a vast market

web_ access the website www.energiadastorcidas.com.br to learn more about the project and to watch the videos about the teams’ fans

SPORT

T

he goal is the greatest moment in soccer. It embodies the implacable equation that defines the game: the team that scores the most goals wins.

While one set of supporters celebrates, the other experiences a momentary resignation, though the love for its team never falters. On the contrary, it grows stronger and more energized: at the next game the fans are all there again, at the stadium or in front of the television, observing the same ritual. When all is said and done, how can we explain this unbridled passion?

Finding a definitive answer isn’t easy.

Every fan has his own explanation.

Even so, the historian and writer Eduardo Bueno, author of Brasil: Uma História – Cinco Séculos de um País em Construção (Brazil: A History – Five Centuries of a Country in Construction), risks a hypothesis: “Soccer is a very involving sport. It is a playful game, with lots of collective appeal. Add a pinch of unpredictability and you get a game that produces great passion”, says Bueno, who has also written a book on his team, Grêmio, from Porto Alegre, in the state of Rio Grande do Sul. João Máximo, a Brazilian journalist who has covered several World Cups and is the author of several books on sports, emphasizes the imponderable nature of the game. “Soccer, in common with all spectacles, has a

by Vinicius Medeiros // Ilustration Guilherme portela

50|51 44|45

The Hand of God During the quarter finals of the World Cup in Mexico, Argentina’s player Diego Maradona scored the opening goal of his team’s 2 x 1 win over England irregularly: while jumping in the penalty box to purportedly head the ball, he used his left hand to put it into the net. The referee was unsighted, failed to observe the incident and awarded the goal despite the protests from the English. Argentina went on to win the World Cup that year. In 2005, Maradona publically admitted to putting the ball in with his hand but the result of the game remained unaltered.

script – which isn’t always followed. In other collective sports, the favorites win 95% of the matches. On the football pitch, however, anything can happen. The fans go to the stadium to see the outcome of the match, and that’s what feeds their passion for the sport.”

Victories and disappointments are all part of soccer.

It is agreed, however, that both inflame the emotions.

The pain of the defeat by Uruguay in the 1950 World Cup Final, for example, is an eternal scar carried by the Brazilians. Similarly, the immortal moment involving Diego Maradona and the so-called “Hand of God” in the 1986 World Cup will never be forgotten by the Argentines. “It is impossible to separate the two worlds. Without the passion that comes from the streets, soccer wouldn’t be the same. But it’s clear that in countries such as Brazil, England and Argentina, these elements become part of the same product”, says Carlos Carpaneto, editor of Ole, Argentina’s leading sports daily. Eduardo Bueno seconds this when he states, “I love soccer, but I can’t picture it without the bleachers, where people from all creeds, races and classes get together. I am also in favor of the rivalry, as long as it’s peaceful”.

The strong bond between the fans and their teams produces great opportunities for companies to connect with their target market. Petrobras has been working on this field since 1984, when it decided to provide sponsorship for Flamengo, one of Brazil’s most popular teams. “In 2008, we withdrew from club sponsorship to sponsor the Brazilian Championship and the Brazil Cup, starting in 2009. The exposure was without precedent.

A report by Informidia consultancy relating to the 2010 Brazilian Championship shows that the returns on TV

The Sport of Billions The close relationship between the field of play and the fans drives a vast consumer market in which the major brands are actively involved.

Data obtained by the BDO RCS consultancy shows that Brazilian clubs earned record revenues in 2010, amounting to 2.18 billion of reais, between the sale and exchange of players, sponsorships, TV transmission rights and the licensing of trademarks.

With the proximity of the 2014 World Cup, to be held in Brazil, it is expected that these figures will continue their upward trend. On a global scale, soccer-related economic activities accounted for an estimated 19 billion euros last year.

SPORT

52|53 44|45

Closer to you

exposure amounted to 113 million of Brazilian reais” states Thiago Luz, one of the persons responsible for Petrobras’ sports sponsorship program. At the same time we have been promoting various initiatives with the supporters themselves”, he adds.

The project A Energia de Todas as Torcidas (The Energy of all the Fans) is playing a leading role in strengthening the relationship between Petrobras and the soccer enthusiasts. Launched in 2010, the initiative delved deep into the world of the soccer aficionado to understand his behavior, beliefs and superstitions. “We produced videos of the supporters of the 20 teams in the “A” Series of the Brazilian Championship that give an insight into this passion that mobilizes multitudes.

Later, a medium-length documentary containing new footage and interviews

depicting the energy of these various groups of fans was featured on ESPN TV channel. This year the initiative will continue with the production of four short features on the teams that were promoted to the “A” Series: América - MG, Bahia, Coritiba and Figueirense”, says Walter Romano, who is responsible for Petrobras’ digital communications planning. The videos have already surpassed the one million viewer mark on YouTube.

Romano goes on to stress that the project is an important tool for Petrobras to connect with the fan culture. “Through The Energy of all the Fans project we hope to strengthen the emotional ties between the public and the Petrobras brand, so that soccer enthusiasts may also become supporters of our brand. So far, it has been an undeniable success”.

Since 2010, Petrobras has invited soccer aficionados to engage in The Energy of all the Fans project by means of minidocumentaries on the clubs in the Brazilian Championship “A” Series, competition of which the Company is the official sponsor.

And now the soccer enthusiast can get even closer to his team through his iPhone and iPad. The Brasileirão Petrobras application provides the user with the latest news on his team, with real-time game and goalscoring information as well as championship league standings.

The application, available for free download at the App Store, also contains all the videos produced

by Petrobras for each team’s supporting base. The project can also be found on the social media, encouraging direct interaction with the public. To learn more, follow our profile @todastorcidas on Twitter (www.twitter.com/todastorcidas) and become a fan of the A Energia das Torcidas page on Facebook (www.facebook.com/ energiadastorcidas).

energy

Photos (clockwise): Ahmad Prakarsa Dhahiyat, Ryan Chu, Mariana Capeletti Calaça

What is the energy that drives the world?

Motivated by the challenge to understand how energy is viewed and perceived, Petrobras has joined forces with Lomography – the world’s largest community of analogue photography enthusiasts – to find the answer in the talent and inspiration of people from all corners of the globe

ENSAIO ESSAY

54|55

In the larger image, photo by Ryan Chu, from Taiwan

This collaboration has resulted in an international photographic competition on Lomography’s website (www.lomography.com) and in an exhibition at the Modern Art Museum in Rio de Janeiro, where an installation composed of enormous mosaics, with thousands of copies attached manually, formed the largest Lomowall ever exhibited in Latin America

Photos (clockwise): Barlaam C. Cintrón Barbosa, María Eugenia Quiroga, Iskandar Rodzai, Sonja Berg, Marshall Foster, Rìo do Muinho

To the left, photo by María Eugenia Quiroga, from Argentina

ensaio รกlbum

Photos (clockwise): Martin Lamarle, Britt Vanderschouw, S. Kaps C/O S. Saalmink, Willie Schumann, Ian Poh Wei Yi, Ehud Neuhaus, Daniel Jenny, Jay Panelo, Blanca Viñas Aicoz

“The Energy that Moves the World” contest sought images that best represent energy in its various guises, in an act that marked the launch of the new Petrobras website (www.petrobras.com) and the new Petrobras Magazine

58 petrobras magazine

ensaio

Above, picture taken by Perlyn Gone Bunyi, from Philipinnes

petrobras magazine 59

The winners, in the flesh Ryan, María Eugenia, Perlyn e Daniel John, the four winners of the contest, came to Rio de Janeiro to take part in the exhibition’s opening

60 petrobras magazine

Photos (clockwise): Remko Smit Sanz, Susana Rodrigo Durán,Rodrigo Nogueira Camillo de Almeida, Stéphane Heinz, Matthew Cieslowski, Daniel John Fernandez, Ina Thedens

From the 13,000 images submitted by contestants across the world, 30 were chosen to represent the different forms in which people perceive energy in a local and global setting. The energy of these images can be viewed here

Below (larger picture), image sent by Daniel John Fernandez, from Spain

web_ See all contest’s photos at www.petrobras.com/magazine

petrobras magazine 61

beyond the paper. At our website (www.petrobras.com/magazine), you will find all the contents of the print

| www.petrobras.com/magazine

Petrobras Magazine goes way

#61

more

interactivity and connectivity

Read_ the print version watch_ the vĂ­deos online ACcESS _extra content on the website INTERAct_ with the iPad version share_on the social networks

interview

Gilberto Gil

#61

| www.petrobras.com/magazine

issue ready to be read online or

speaks about cyberculture, collaborative creation and innovation

sports soccer, a passion that mobilizes billions

on a downloadable version. You can also watch videos and check out new photos at our Flickr gallery. Enjoy!

How companies can share knowledge and aggregate ideas coming from outside sources

business

[open innovation] the use of purposive inflows and outflows of www.petrobras.com/magazine

knowledge to accelerate innovation

petrobras’ expansion pushes forward several industry segments

around the world Chile: searching for new sources of energy