contents
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issue # 30 may 2011
Special interview
with Nelson Leite, President of FMC Technologies do Brasil
The right amount of
daring 14
Perspective 2011
Expectations running on oil 19 22 24 28 30 32
34
Brazil: not very competitive A new pipeline era Infrastructure is (still) a problem Petrobras: the goal is to maintain the pace of growth An opportunity for advancement Oil and gas industry on the move and new contracts signed
R&D
Research through partnership: new R&D centers in the Brazilian oil production chain 37 Cenpes is expanded 38 IBM to have research center in Brazi
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USA and Brazil
“This is a country of the future no more�, says Barack Obama
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44 The Fast Oil Recovery System
Leadership in Offshore Class and Related Services e-mail: absrio@eagle.org • Phone: + 55 21 2276-3535
Events
48
Brazilian Pavilion:
The One Stop Shop
76 Coffee Break
EDITORIAL ADVISORY BOARD Affonso Vianna Junior Alexandre Castanhola Gurgel André Gustavo Garcia Goulart Antonio Ricardo Pimentel de Oliveira Bruno Musso Colin Foster David Zylbersztajn Eduardo Mezzalira Eraldo Montenegro Flávio Franceschetti Francisco Sedeño Gary A. Logsdon Geor Thomas Erhart Gilberto Israel Ivan Leão Jean-Paul Terra Prates João Carlos S. Pacheco João Luiz de Deus Fernandes José Fantine Josué Rocha Luiz B. Rêgo Luiz Eduardo Braga Xavier Marcelo Costa Márcio Giannini Márcio Rocha Melo Marcius Ferrari Marco Aurélio Latgé Maria das Graças Silva Mário Jorge C. dos Santos Maurício B. Figueiredo Nathan Medeiros Roberto Alfradique V. de Macedo Roberto Fainstein Ronaldo J. Alves Ronaldo Schubert Sampaio Rubens Langer Samuel Barbosa
articles 65 Brazilian basics, by Heller Redo Barroso and Marcos Macedo
Year XII • Issue 30 • May 2011 Photos: Roberto Rosa and T&B Petroleum Image Bank
72 Peak Oil. Does it Matter?, by Dato’ Rob Fisher 74 Technology increases the offer of national pipe for the oil and gas industry, by Wilson Rosa Cordeiro
sections 3 4 48 58
editorial hot news events professional profile
61 76 78 79
products and services coffee break meeting opinion T&B Petroleum # 30
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print on COUCHe 115 gr/m². dimensions: 1,0m X 0,7m.
Back issues of this edition: Brazil’s Offshore: 2010/2014 map.
T&B Petroleum # 30
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editorial
Rua do Rosário, 99/7º andar Centro – CEP 20041-004 Rio de Janeiro – RJ – Brasil Tel/fax: 55 21 3221-7500 www.tnpetroleo.com.br tnpetroleo@tnpetroleo.com.br PUBLISHER Benício Biz beniciobiz@tnpetroleo.com.br NEW BUSINESS DIRECTOR Lia Medeiros (55 21 8241-1133) liamedeiros@tnpetroleo.com.br EDITOR Beatriz Cardoso (55 21 9617-2360) beatrizcardoso@tnpetroleo.com.br ART and CULTURE EDITOR Orlando Santos (55 21 9491-5468) REPORTER Cassiano Viana (55 21 9187-7801) cassiano@tnpetroleo.com.br Fernanda Romero (55 21 9161-8744) fernanda@tnpetroleo.com.br Rodrigo Miguez (55 21 9389-9059) rodrigo@tnpetroleo.com.br INTERNATIONAL AFFAIRS Dagmar Brasilio (55 21 9361-2876) dagmar.brasilio@tnpetroleo.com.br GRAPHIC DESIGN Benício Biz (55 21 3221-7500) beniciobiz@tnpetroleo.com.br PRODUCTION GRAPHIC and WEBMASTER Laércio Lourenço (55 21 3221-7506) webmaster-tn@tnpetroleo.com.br Marcos Salvador (55 21 3221-7510) marcossalvador@tnpetroleo.com.br TRANSLATION Rick Toledano (55 21 9880-9905) COMERCIAL José Arteiro (55 21 9163-4344) josearteiro@tnpetroleo.com.br Cristina Pavan (55 21 9408-4897) cristinapavan@tnpetroleo.com.br
Lorraine Mendes (55 21 8311-2053) lorraine@tnpetroleo.com.br Bruna Guiso (55 21 7682-7074 bruna@tnpetroleo.com.br Luiz Felipe Pinaud (21 7861-4828) l.felipe@tnpetroleo.com.br SUBSCRIPTIONS Rodrigo Matias (55 21 3221-7503) matias@tnpetroleo.com.br PRINT Walprint Gráfica DISTRIBUTION Benício Biz Editores Associados The articles are the responsibility of the authors, not necessarily representing the opinion of the editors. T&B Petroleum is directed to engineers, geologists, technicians, researchers and buyers in the oil industry. SEND RELEASES Suggestions of themes or articles should be sent via fax: 55 21 3221-7511 or e-mail: tnpetroleo@tnpetroleo.com.br Member of
A promising decade
B
razil has experienced a golden decade in the oil and gas industry, developing an increasingly open market in a sector that had spent decades under a monopoly regime. The entry of private and public sector E&P companies and suppliers from many different countries is a clear indication of what Brazil has gained from the ending of the monopoly. Moreover, it has given Petrobras the opportunity to reaffirm its excellence and leadership in deepwater offshore exploration. Although still affected by the consequences of the 2008 global financial crisis, the key facts and figures from last year show that Brazil has changed, Brazilian industry has evolved and the country is following a more promising path. It no longer makes sense to talk about the country of the future, as the future has now arrived. Of course, it is still important to look ahead, as T&B Petroleum did for this edition’s cover story, listening to business people from various parts of the oil and gas supply chain and representatives of industry organizations. This is the perception of US president, Barack Obama, who stated “This is a country of the future no more” during his visit to Brazil in March to develop relations with the Brazilian government and cultivate ties of friendship with President Dilma Rousseff, as he did with Lula. Obama showed that expectations are high and that this is a two-way relationship, contributing to exports and job creation not only in Brazil but also in the United States, which is still suffering from the crisis. There are various reasons for foreign companies’ interest in Brazil.
Many of them are expanding their operations in the country, investing to raise productivity and also boost local industrial capacity. “If we identify a need to invest more to support growth, we will do it. This, historically, has been our approach in the region – and it has been quite successful,” states Nelson Carvalho Gomes Leite, president of FMC Technologies do Brasil, in an exclusive interview with T&B Petroleum. Others are going further, opening research and development centers at the Fundão technology park, alongside Petrobras’ Cenpes research center and Rio de Janeiro Federal University (UFRJ), demonstrating that they do not want merely to supply technology and products, but to generate knowledge in the country, as you can see in our special report about the expansion of Cenpes and Petrobras’ network of partners. All of these factors lead us to believe that another promising decade for the Brazilian economy lies ahead. There will be a new golden decade for the oil and gas sector, as new ANP licensing rounds further expand exploration frontiers. New players will be competing in strategic areas, such as pre-salt – there should be no more delays to the long-expected pre-salt auction, now that the change in the regulatory framework has been approved by the National Congress. What we want is for all these prospects and expectations to become reality, confirming Brazil not as the country of the future, but rather a country with a long and sustainable future.
Benício Biz Publisher
T&B Petroleum # 30
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hot news
Subsea 7 awarded US$1 billion contract for deepwater development offshore Brazil
Photo: Courtesy of Subsea 7
deepwater frontier which is the Santos Basin Pre-Salt area, as it enables us to leverage our newly enhanced capabilities, further develop our strong track record as a local strategic partner to Petrobras, whilst building upon our long-term commitments in Brazil. We look forward to continuing to support Petrobras’ developments and bringing our expertise in engineering, project management and installation to the ongoing development of the challenging Pre-Salt Area, offshore Brazil.” Jean Cahuzac, Subsea 7’s Chief Executive Officer, said, “This contract, the first EPIC award on the Pre-Salt Porto Areas, represents a significant developdo Forno ment. It reflects Subsea 7’s capabilities Porto de Sepetiba to apply advanced solutions to meet the increasingly challenging needs of Etna Pipeline our clients in their complex deepwater Fuji subsea developments. We look forward Waimea to developing further our local content Cidade de facilities and expertise and build on our Santos BM-S-56 BM-S-42 already strong presence in Brazil.”
BM-S-17
New superintendent responsible for holding tenders at ANP Claudia Rabello has been appointed the superintendent responsible for conducting tenders at the National Petroleum, Natural Gas and Biofuels Agency (ANP). She has 12 years’ experience in the oil and gas sector, most recently working at ANP’s Institutional Communications department, where she participated in groups that planned, communicated and executed bid rounds for oil and gas exploration and production. This work brought her into contact with representatives of the agency’s upstream departments and developed her technical knowledge. Ms. Rabello has an undergraduate degree in Social Communication from PUC-RJ and a postgraduate diploma in administration and marketing from IBMEC-RJ, and she has done a course on oil and gas management at COPPE-RJ. She joined ANP in 2004.
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BM-C-45
BM-C
BM-C-47 Car end terminations (PLETs) of which BM-C-37 P-63 eighteen 7.5” production lines, three BM-C-41 BM-C-38 BM-C-44 BM-C-43 9.5” water injection lines and six 8” BM-C-46 BM-C-42 gas injection lines, and associated Porto de BM-S-44 São Sebastião 16 anchor piles and crossings. 7k Vesúv BM-S-60 m Engineering and project manageVesúv BM-S-57 BM-S-58 ment work will commence with im- BM-S-59 BM-S-4 Vesúv 174 km BM-S-45 BM-S-44 mediate effect and will be undertaken Huna Kraka PMXL-1 at our offices in Rio de Janeiro, Brazil. BM-S-42 17 Hawaii 2k BM-S-53 Fabrication of the rigid pipelines will Kilawea m BM-S-54 BM-S-52 be carried out at the pipeline BM-S-55 fabricaBM-S-11 BM-S-64 tion spoolbase, which Subsea 7 are BM-S-10 BM-S-51 BM-S-50 Tupi developing at Paranaguá, Paraná in BM-S-48 Tupi Oeste PMLZ BM-S-46 BM-S-65 Cidade de Nordeste Brazil.tal Offshore installation is schedAngra dos Reis S-M-732 S-M-734 BM-S-29 BM-S-48 BM-S-24 uled to commence during the second Lula BM-S-67 BM-S-11 S-M-857 half of 2012, usingBM-S-66 SevenS-M-855 Oceans, Guará Abaré OesteAbaré Norte Seven Seas and Skandi Seven. BM-S-9 S-M-980 S-M-982 BM-S-8 61 Victor Snabaitis Bomfim, SubBM-S-9 Santos BM-S-22 sea 7’sM-1103 Senior Brazil, S-M-1109 S-M-1105 Vice President, Basin said, “We are delighted to be awarded BM-S-21 Thebas S-M-1233 S-70 this pioneering contract in this new
m 0k
Subsea 7 announced the award of a contract with Petrobras, as Operator of BM-S-9 and BM-S-11 Consortia to Subsea 7 Inc., a wholly owned subsidiary of Subsea 7 S.A., of approximately US$1 billion for the development of the Pre-Salt deepwater Guará and Lula NE Areas located in the Santos Basin, offshore Brazil, in water depths of approximately 2,200 meters. The project scope includes the Engineering, Procurement, Installation and Pre-Commissioning of four decoupled riser systems featuring: • four submerged buoys each of 1,900 tonnes to be installed at approximately 250 meters below the sea level buoy foundations and associated tethers; and • twenty-seven steel catenary risers of 3.9km and associated pipeline
Ar BM-C-39
Forship: from north to south Pioneering Brazilian company in the field of commissioning strengthens its position in the country’s oil and gas market through strategic partnerships and a new office
Halliburton awarded gig for Statoil’s HP/ HT fields offshore Norway where eight platform hulls are being built for Petrobras, which has leased the shipyard for 14 years. The cooperation agreement provides for courses to be given and related disciplines to be developed at FURG, as well as the academic licensing of the commissioning management system developed by Forship, HMSWeb. “Growth in Rio Grande do Sul’s shipbuilding industry since the Rio Grande Shipbuilding Complex was inaugurated in October 2010 has generated demands that local professionals have been unable to meet, especially in commissioning – an area crucial to executing projects to time and quality standards and to delivering projects in real operational conditions,” says Fabio Fares, President of the Forship Group. “This is a strategic partnership to train professionals for this market segment.” About the Forship Group – Headquartered in Rio de Janeiro, the Forship Group provides engineering solutions and services for industrial plants in the oil and gas, petrochemical, shipbuilding, energy and mining sectors. A leader in commissioning, the company has developed and implemented stateof-the-art technology in the Americas, Europe, Africa and Asia. The Forship Group’s success is evident from its work for more than 50 domestic and international clients. Petrobras, Braskem, Aker, Maersk, Odebrecht, Queiroz Galvão, RollsRoyce, Samarco and Vale are among the group’s main clients.
Halliburton has been awarded several contracts by Statoil to provide services for two high-pressure/high-temperature (HP/HT) fields offshore Norway. Halliburton estimates that these significant multiyear awards have the potential to exceed more than $200 million in value. Under these contracts, Halliburton will provide directional drilling, loggingwhile-drilling, cementing, drilling fluids, and completion equipment and services at the Gudrun and Brynhild fields. Drilling is scheduled to start in the third quarter of 2011. Halliburton’s proven HP/HT technology will be key in enabling the development of the Gudrun oil and natural gas field, where temperatures exceed 150°C (302°F). Statoil is operator of the Gudrun field, which is planned for startup in the first quarter of 2014. The Brynhild HP/HT oil and gas discovery is approximately three kilometers east of the Gudrun field. “We are proud to have been awarded these technically challenging contracts for Gudrun and Brynhild,” said Brady Murphy, Halliburton’s vice president for the Europe/ West Africa Region. “These awards, together with our recent HP/HT wins in other offshore basins, reflect Halliburton’s technology investment and proven performance in challenging well conditions. This will be an important contribution to further development offshore Norway.”
Illustration: Courtesy of Statoil Hydro
Due to the demand arising from numerous projects under way in Brazil’s North and Northeast regions and in order to become involved in these region’s petrochemical and shipbuilding sectors, which are rapidly expanding, the Forship Group has established an office in Recife, Pernambuco. The office is already prospecting for business in the Northeast shipbuilding sector, home to the largest and most modern shipyard in Latin America, the Atlântico Sul shipyard in Suape, Pernambuco, and is working on projects at the Promar and Galíctio Consortium (composed of the Spanish companies Indasa, Tecnyno, Electro Rayma and Gabadi) shipyards, also in Pernambuco. The office is also close to signing deals in other locations, such as Ceará and Alagoas. In the petrochemical and refining area, besides meeting the demands of existing petrochemical complexes (Camaçari, Bahia, and Suape, Pernambuco), the company sees opportunities in large-scale projects such as the Premium I and II refineries. Marco Fares, vice president of the Forship Group, sees a market of US$50 billion in the Northeast within the next five to ten years. “This represents around US$500 million to US$1.5 billion in the commissioning area,” he says. “It’s a fabulous, quite considerable figure.” According to Mr. Fares, opening an office in the Northeast was a good move. “This greatly facilitates our activities with clients,” he explains. “In addition, we are very satisfied with local hiring. We have great prospects and employing local people is fundamental.” He says that the Forship Group expects to double its revenues this year, from R$50 million in 2010. Forship FURG partnership – In March, the Forship Group and the Federal University of Rio Grande (FURG) established a unique partnership focused on training engineers in different fields for commissioning work at the Rio Grande Shipbuilding Complex,
T&B Petroleum # 30
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hot news
PhD student in São Carlos receives Petrobras Technology Award Cristiane Alves Sierra Pereira, a student at the Postgraduate Chemical Engineering Program (PPGEQ) at the Federal University of São Carlos (UFSCar), was one of the winners of the fifth edition of the Petrobras Technology Awards Her work “Cu (II) or Fe (III) Catalysts Supported by TiO2 – Nitrogen Oxide Emission Abatement Activity,” supervised by Professor Ernesto A. Urquieta-Gonzalez of UFSCar’s Chemical Engineering Department, won the Environmental Preservation Technology category award. As Ms. Pereira explains, the research conducted at PPGEQ will enable the development of technologies to reduce nitrogen oxide concentrations in the atmosphere. Nitrogen oxide is produced by industry and the burning of fossil fuels such as gasoline. “The creation of processes to minimize emissions of these polluting gases is strategic. Catalytic processes have been shown to be highly attractive for this purpose, due to the development of increasingly efficient catalysts, thereby giving rise to cheaper proces-
ses. These processes allow nitrogen oxides (NOx) to be converted into (N2), an inert, harmless gas,” she explains. Catalysts can be used in industrial petroleum cracking plants, which generate large quantities of nitrogen oxides. “The focus of the work, which I developed during my master’s course, supported by a Fapesp scholarship, was to maximize conversion of nitrogen oxides to nitrogen gas by means of a process involving catalysts containing oxides of transition metals such as copper, iron and cobalt, deposited in a titanium matrix,” says Ms. Pereira. She states that the award has added value to her training as a researcher. “It is undeniable that winning an award of this importance is very significant for my training and will be a big plus on my resume. Moreover, it
On Tuesday April 5, multinationals Clariant – a global leader in chemical specialties – and Veolia Water Solutions & Technologies – a global leader in technological solutions for treating water and liquid effluents – unveiled a strategic alliance for managing water in industrial plants. The two companies will provide integrated solutions for treating, reusing and using less water. This unique partnership is designed to operate in Brazil, but may be extended to other markets in the future. “The agreement starts in Brazil. Then we’ll look at Latin America, and then globally,” says the vice president of Clariant’s Oil & Mining Services business unit for Latin America, Carlos Tooge. “The strategic alliance between Clariant and Veolia Water Solutions & Technologies is a significant milestone in the market. We don’t have any direct competitors, if we consider the solution we will
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Photo: Stock.xcng Image Bank
Strategic alliance
now be offering,” says Clariant’s manager for water treatment in Latin America, Eduardo Castilho. The two companies are putting their expertise and skills together to make available a complete package of chemical specialties knowledge, cutting-edge technologies, and
is very gratifying that the work I did at the DEQ-UFSCar Catalysis Laboratory has been recognized and considered significant in the area of environmental preservation technology.” The award-winning research project is part of a set of projects in the field of environmental catalysis coordinated by Professor Ernesto A. Urquieta-Gonzalez and under way at DEQ since 1998. More information about the Petrobras Technology Awards can be found at www.petrobras.com.br/ premiotecnologia. technical and operational support in water treatment systems for the full range of industrial and commercial facilities. “As a technology company, we identified an opportunity to meet the Brazilian market’s need for integrated solutions. By working together with Clariant, we will be offering our clients complete products and services for managing the treatment of water and effluents,” explains Mauro Gebrim, Veolia’s business development director for Latin America. “Through this strategy, we are sure that our clients will have one of the best solutions in the global market in this sector,” he concludes. Among the sectors that offer the greatest business potential for the partnership in the short term are oil and gas, chemicals and petrochemicals, steelmaking and metallurgy, fertilizers, sugar and ethanol, paper and pulp, food and drink, mining and textiles.
Converteam signed an acquisition agreement with General Electric Pierre Bastid and Florent Battistella will retain a significant shareholding in Converteam after the closing of the transaction. The agreement is based upon the founding principles of an ambitious growth business project and a rapid integration of Converteam into GE Energy as its center of excellence for Power Conversion. Pierre Bastid, Chairman and CEO of Converteam, declared: “GE is the ideal partner for Converteam. Our strong position in the Power Conversion business is highly complementary to GE’s global leadership in the energy value chain. This transaction will significantly bolster Converteam’s strategic ambitions to further globalize its business, strengthen its worldwide delivery capabilities and create a reference industrial player. It will also help Converteam build the strength and scale to compete on major international contracts. We look
forward to the outstanding offerings in power conversion this partnership will bring to our clients as well as the unique benefits it will provide for our employees.” John Krenicki, GE Vice Chairman and President and CEO of GE Energy, said: “Highefficiency, fully electric solutions represent a mega trend across the global energy landscape. Our customers across key industries are demanding more reliable, efficient, and flexible solutions in order to improve their competitiveness. Converteam’s world-class people and energy efficient products and services connect a lot of pieces in our portfolio and will enable us to offer integrated solutions to our customers.” Pierre Bastid added: “Converteam’s track record and the motivation of our teams, combined with GE’s extensive industrial expertise and global scale, will be strong catalysts for entering this new chapter of our shared future.”
A rapid and smooth integration of Converteam into GE Energy – Converteam will remain an autonomous profit center and will be the center of excellence for Power Conversion within GE Energy. Its mission statement is clear: maintaining high standards for technology leadership, talent development, and customer focus. GE is experienced in acquiring and integrating successful companies in a mutually beneficial way. GE has shown its ability to position the acquired companies at the center of its strategy of development as they did with Alstom Heavy Duty Gas Turbine (France) in 1999 and Nuovo Pignone (Italy) in 1994. Within GE Energy, the contribution of Converteam will be reflected by growth in annual revenues of ca. 1.1 billion euros. Conditions and Calendar of the transaction – The agreement concerns the acquisition of the Converteam group by GE, after both parties have consulted their employee representative bodies. National and European clearance processes will now be undertaken with expected completion in the summer.
The company will exhibiting at the events your latest products with to applications in offshore rigs, sea going vessels or land based operations. JD Neuhaus, specialized in air and hydraulic powered lifting equipment, is exhibiting in the German Pavilion at the OTC early May and as well in the German Pavilion at the Macae Offshore show early June. J D Neuhaus has established a reputation for excellent service and premium products, combining reliability, performance and longevity, for operation in hazardous and arduous conditions. JDN is taking this opportunity to show some of their latest products,
many of which have been developed to cover specialized applications within particular industries. These include the EH 25 monorail hoist which is designed to fulfil all requirements for the safe and effective handling of BOP products whether for offshore rigs, sea going vessels or land based operations. A 25 tonne lift capacity is combined with air or hydraulic operated lift and travel movements, together with optional remote electrical or radio controls. For shipbuilding or general shipyard applications the new JDN Profi 25 Ti hoist provides both horizontal and oblique lifting and pulling with sensitive positioning control and rugged
Photo: Courtesy of JD Neuhaus
JD Neuhaus presents at OTC 2011 and Brazil Offshore 2011
reliability. The EH and Profi hoists both benefit from recent design advantages in performance, low component count and energy savings with models also available with 37 and 50 tonnes lift capacities.
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special interview Nelson Leite, President of FMC Technologies do Brasil
The right amount of
daring
State-of-the-art technology with local content, the capacity to grow and meet the new demands and challenges of the market, and the daring necessary to invest in innovation are the ingredients to the success story that is FMC Technologies. With local production capacity and increasing its engineering and manufacturing over the years, FMC Technologies celebrates 55 years of uninterrupted activities in Brazil – originally founded as CBV Indústria Mecânica in 1956 and then bought by FMC in 1998. “We are expanding our operations in Rio and Macaé, and incorporating more tools and machines, as well as helping to develop the local industry. If we identify a need to invest more to support growth, we will do it. This, historically, has been our approach in the region – and it has been quite successful”, states Nelson Carvalho Gomes Leite, President of FMC Technologies do Brasil. A graduate of Mechanical Engineering from the Universidade Gama Filho and with a Master’s Business Administra12 T&B Petroleum # 30
by Beatriz Cardoso
tion from the Universidade Federal do Rio de Janeiro (UFRJ), the executive has more than 30 years at FMC, in a career that took him to director of operations and on to Vice President, before becoming the President of the company that is the leader in subsea equipment. “We have the largest production capacity in the country and we are capable of meeting the requirement for local content in projects,” adds Leite, in an exclusive interview with T&B Petroleum Magazine. According to the company executive, the company’s strategy for success will only be reinforced by FMC’s first Technology Center in the country, which is being constructed in the Parque Tecnológico do Rio de Janeiro - UFRJ, in order to give the necessary support for the company to continue meeting
the needs of clients dealing with the most severe offshore scenarios. T&B Petroleum – FMC Technologies has received from Petrobras an order worth US$ 125 million to supply 32 subsea trees. The units are part of the contract of US$ 400 million closed in February last year and which provides for the supply of 107 trees over four years. Where some of these 107 Xmas trees already delivered? Nelson Leite – Manufacturing of the equipment is progressing according to plan. Our equipment and system deliveries are scheduled to begin in the first quarter of 2012. When will the first trees be delivered? Tree deliveries will begin in 1Q12, as scheduled.
What are the biggest challenges of this contract with Petrobras? This is a considerable contract and it is a reflection of our long and productive relationship that we have with Petrobras. While the scope of the project is among our largest, the challenges of this project are quite similar to what we must address with any project. For example, managing the supply chain to ensure deadlines are met, the overall logistics of the delivery process, and ensuring we have the project properly staffed with the right professionals. We have a great record of success at these items, and our strong relationship with Petrobras also benefits us due to our experience and historical collaboration. This is why we are the subsea market leader internationally, and the leader here in Brazil where we’ve delivered approximately 350 trees, including about 300 delivered to Petrobras.
Photos: Courtesy of FMC Technologies do Brasil
we are the subsea market leader internationally, and the leader here in Brazil where we’ve delivered approximately 350 trees, including about 300 delivered to Petrobras.
Are there other contracts with Petrobras in progress? We have two frame agreements in place with Petrobras – the US$400 million frame agreement for 107 trees you already mentioned, and a US$300 million agreement for manifolds and multiplex control systems. In addition, our expertise and industry leadership in subsea processing resulted in our receipt of Petrobras’ Marlim project. This contract uses our innovative subsea processing technologies and systems, and it will pave the way for future subsea processing opportunities as Petrobras aims to reduce or eliminate many platform infrastructures and instead develop offshore reservoirs with subsea systems in what has been described as “underwater cities.” Beyond our subsea processing work, we also have a number of T&B Petroleum # 30
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special interview
other contracts for subsea equipment. Are there other equipment or services contracts with operators or oil companies operating in Brazil? What are those and what scope? Yes, we have several. In addition to Petrobras, we also have contracts for other high profile and innovative projects, including Shell’s Parque das Conchas (formerly known as BC-10); Chevron’s Frade; and Statoil’s Peregrino. Apart from Xmas trees, what other equipment are being demanded by the oil and gas industry in Brazil? The industry’s equipment demands in Brazil are quite similar to other deepwater basins around the globe. They include a need for technologies that will: increase oil recovery in brownfields; maximize production in greenfields/ newly discovered reservoirs; reduce operating costs while extending life of field. Brazil also is unique as there is a well known effort underway to design and deliver technologies that can successfully develop the many pre-salt reservoirs that have been discovered in recent years. These designs also must address the challenging subsea conditions, 14 T&B Petroleum # 30
we are currently expanding our existing operations in both Rio and Macae, and are also adding more machine tools as well to support the industry. in addition, this year we will complete the construction of our technology center at UFRJ’s technology park which will further support our ability to meet the needs of our customers.
especially High-Pressure and HighTemperature environments, and of course everything we design must be done with the utmost attention given to safety, quality and environmental concerns. Is there any equipment that shows new technology/innovation providing any differential comparing with others? What are the main characteristics of this innovation? Our subsea processing equipment – specifically our technologies that perform separation of oil, water, sand and gas on the seabed, have provided FMC with a competitive advantage. In addition, the subsea boosting and pumping systems we have designed and delivered have allowed customers to make step changes in offshore and deepwater production. Two of the best examples of these successes are
offshore Brazil in the Shell Parque das Conchas field and our pending delivery of separation and processing technologies to Petrobras for the Marlim field. The increased E&P activity in the coming years creates an expectation of substantial increase in demand for FMC? As the market leader, we think we are well positioned to benefit from future increases in E&P activity. As you consider the innovative technologies we’ve delivered to customers across the globe to support their various and unique subsea challenges, we gain added confidence that we have the people, infrastructure and technologies to continue this leadership role. What is the manufacturing capacity of FMC Brazilian facilities to meet local industry? We have the highest manufacturing capacity in country and are able to meet local content requirements for projects. FMC has been investing in additional local capacity for several years. In fact, we are currently expanding our existing operations in both Rio and Macaé, and are also adding more machine tools as well to support the industry. In addition, this year we will complete the construction of our technology center at UFRJ’s technology park which will further support our ability to meet the needs of our customers. The Brazilian manufacturing plant meets fully the issue of domestic content in the oil and gas? Yes – we are fully capable of meeting all domestic content requirements. Are there plans to expand FMC Brazil plants? As noted, we’re in the process of another expansion of our existing
the right amount of daring
operations in both Rio and Macaé. With Brazil emerging as one of the world’s largest producers of oil and gas, and based on the future opportunities that exist due to the many massive pre-salt discoveries, we also have the capability to further expand our existing operations to support that growth as needed. It serves only the Brazilian market or the whole region of South America? We have the capability to support projects beyond opportunities in Brazil, although Brazil is certainly the nucleus of South America’s activities. We support BG’s development in Trinidad and Tobago, for example, and other projects. But the core of activities currently remains in Brazil, where the infrastructure, relationships and opportunities exist to support Petrobras and other operators with their E&P efforts.
What are the investments planned for the coming year in the country? If you can not specify, enhance the weight of Brazil in the investment division of the group? i.e., the country will have a significant investment by the FMC Corporation? The region holds significant future potential due to the many recent discoveries that have been announced, but also due to the opportunities to enhance existing fields with new technologies to extend life and production. We announced the Technology Center’s construction in July of 2010 and noted our intention to invest approximately US$ 125 million over a 3 year period to support that effort and our growth. While we do not disclose specific dollar amounts related to our facility expansions and machine tool additions, I can say we have made considerable investments in these areas that have driven our growth,
and we are prepared to make more investments as necessary to support our customers and the future growth of the industry. What are the major competitive advantages of FMC in the Brazilian market? There are several. They include: our long history dates back to 1956 when we operated as CBV, which has continued since our acquisition by FMC; our strong relationship and collaboration with Petrobras, and agreements such as the recent Memorandum of Understanding we signed in November of 2010 to develop future subsea technology solutions for its oil and gas projects offshore Brazil. We have delivered more subsea trees – approximately 350 – than any other company and we have a strong reputation and track record for success.
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15
special interview
In Manifolds, we have delivered and installed 28 in the country (representing around 80% of marketshare). Frame agreements with customers, such as the US$ 300 million manifold agreement and the US$ 400 million tree agreement is representative of the confidence and success Petrobras has in our technologies. Experience with Brazilian Engineering and Fabrication for complete subsea systems: 1st and 2nd complete subsea systems awarded by Petrobras (Mexilhão and Tambaú); 1st and 2nd complete system awarded by Shell (Parque da Conchas (former called BC10) and now executing Parque das Conchas Phase 2); 1st complete system awarded by Chevron (Frade). Our subsea processing expertise has resulted in significant competitive advantages for us in Brazil. The success of our Parque das Conchas system – which has resulted in a number of firsts for Brazil, has laid the foundation for future successes with subsea processing for Marlim and other opportunities. The Technology Center at Technology Park in Rio de Janeiro positions FMC at the hub of Brazil’s future oil and gas technology devel16 T&B Petroleum # 30
Our customers’ biggest challenges include a need to maximize their field dollar investments by extending field life and production as far as possible through the use of new designs.
opments – near the best in academia and a neighbor to Petrobras’ own CENPES facility. What are the biggest challenges for the company to continue serving the market, in a prominent position? First and foremost, everything we do must be designed to perform in the safest manner possible for our employees, communities and the environment. We must never become complacent and always work with our customers to design those technologies that they need in order to be successful. Our customers’ biggest challenges include a need to maximize their field dollar investments by extending field life and production as far as possible through the use of new designs. A typical offshore field may only have a recovery rate of approximately 35%. By designing systems that effectively increase that recovery rate, our customers will benefit from the incremental production increases. The consumers also will benefit as the supply of hydrocarbons is expanded. Addressing the other challenges I noted earlier – such as pre-salt and HP/HT
– also will benefit FMC in the future. And you cannot underestimate the rewards that come from successfully identifying and hiring qualified professionals to support our efforts. By training and developing these individuals, we also will maintain our leadership position and competitive advantages. How is the status of the new FMC Research Center in the Technological Park of Rio, which will house the tests with the prototype of the first subsea separation system for heavy oil in deep water in the world? Construction of the Technology Center is on schedule. It will open in the second half of 2011. The building will contain engineering offices, technical training and design areas, research and development laboratories, and the capability for full-scale prototype integration and testing of subsea systems. The Center will benefit FMC as we continue to play a significant role in the development of technologies for Brazil’s deepwater and pre-salt environments. The device, developed in partnership with Petrobras and Statoil will be installed on the Marlin field in late 2011? What are the main characteristics of this equipment? Our subsea industry leadership position was strengthened in 2009 with the receipt of a US$90 million contract to support Petrobras’ Marlim field. The development of Marlim began in 1985. It is Brazil’s largest offshore field in the northeastern of Campos Basin, covering around 150 km². Today, FMC is designing and manufacturing innovative technologies to enable Petrobras to achieve its goal of maximizing production and recovery rates at this mature field. This includes delivery of a separation and sand management system that will utilize a novel pipe separator design, licensed and
the right amount of daring
developed by FMC Technologies in cooperation with Statoil. Marlim is the sixth subsea processing project awarded to FMC Technologies since 2005. (Tordis; Perdido; Parque das Conchas; Cascade/Chinook; Pazflor are the other five.) Marlim will achieve a number of milestones for both FMC and the oil and gas industry, including the first: deepwater deployment of a subsea separation system in a mature field; separation of heavy oil and water in a subsea environment, and reinjection of water into a subsea reservoir to boost production. What are the differentiation that this Research Center will provide to FMC? We will use the University’s infrastructure to support testing activities. The location near UFRJ will allow us to develop more local talent to support equipment design. The features of the Center will also
Our subsea industry leadership position was strengthened in 2009 with the receipt of a $90 million contract to support Petrobras’ Marlim field. The development of Marlim began in 1985. It is Brazil’s largest offshore field in the northeastern of Campos Basin, covering around 150 km².
benefit our activities, including the electronic and qualifications labs, as well as the ability to work with prototypes and other technology tools.
The Technology Center incorporates the company’s investment plan in Brazil over the next three years, which reserves a total of US$ 125 million. Do you also intended to expand the plant in Rio de Janeiro and Service Center in Macaé. Are these values still the same or may increase? Our local capacity for fabrication, manufacturing and engineering has continually expanded throughout years. If we identify a need to invest more dollars to support new growth, we will. That has been our historical approach in the region and it has been quite successful. We are well positioned for local content for all product lines, and we believe strongly that our strategies and capabilities will continue to position us for future success as we work with our customers to resolve the challenges they face in developing Brazil’s oil and gas assets.
More than 50 years For more than 50 years, FMC Technologies do Brasil has developed technological solutions for the Oil and Gas industry, operating in surface, topside and subsea. The company has approximately 1,500 employees in two manufacturating plants in Rio de Janeiro, and a Customer Support Center in Macaé. In 1978, FMC manufactured the first subsea christmas tree in Brazil, and since then, has effectively contributed to the oil and gas production growth in deeper waters. The company already produced in Brazil over 28 manifolds and over 345 subsea trees; and has broken six water depth world records with innovative technological solutions. Currently, about 50% of all oil and gas produced offshore in the country passes through FMC Technologies equipment. Due to the pre salt field development and the demand for increased oil recovery solutions, FMC Technologies will open in 2011 its Technology Center. Located at the Technological Park of Rio de Janeiro – Federal University, the Center will have specialized engineering, research laboratories, product development and qualification, as well as integration testing of full scale prototypes. T&B Petroleum # 30
17
Photo: Roberto Rosa, Consorcio Quip
perspective 2011
Expectations running on oil by Cassiano Viana
Brazil has become the target of investments as one of the world’s main frontiers for oil exploration, which – together with the accelerated exploration of the pre-salt – should rev up several segments of the economy. 18 T&B Petroleum # 30
perspective 2011
tions, Brazil is in 3rd place behind China (27th) and India (51st), and in front of Russia (63rd).
The high jump As far as Brazil’s resilience to overcome the effects of the global crisis and the return to economic growth in the next four years will be decisive. Infrastructure, education, technological innovation and environmental sustainability should take the forefront as the nation’s priorities. According to the National Industrial Confederation (CNI), in its publication “Industry and Brazil: an agenda to grow more and better”, Brazil could grow at rates higher than 5% a year, as long as it has learned its lessons on stability, has prioritized competitiveness and has modernized economic and political institutions. In order to demonstrate the decisive role industry plays, the National Industrial Confederation (CNI) cites, within the same document, that periods of major growth are led by industrial development, by investments in segments of the production system, and by the multiplying effect that they play on growth. According to the CNI, it is the time for diversifying production, taking advantage of the potential domestic market, and gaining space in the foreign market. At the same time, investments in human capital, which is the knowledge that is the base of a dynamic industry, must be made. The president of CNI, Robson Braga de Andrade, believes that competitiveness is a must, and has technically 20 T&B Petroleum # 30
defined competitiveness as the capacity of a company to either equal or to surpass competitors as the consumers’ choice for price, quality, and innovation or advertising – and it has become a major national strategy. “We need to make a high jump in competitiveness, and this mission demands the mobilization of all the political and economic forces of the country: the three powers of the State – Executive, Legislative and Judicial; the companies and representative entities; and all the representative segments of society”, he defends. “The slower the process of pro-competitive reforms, the greater the risk for Brazilian industry”, he warns. According to Andrade, Brazil’s business environment is uncomfortably positioned due to the high tax burden, archaic labor legislation, difficulties to access credit, costly social security, the world’s highest interest rate, legal ambiguity, poor-quality education, and excess bureaucracy, among other factors that penalize industry.
Promising outlook On the other hand, the discovery of the gigantic reserves in the pre-salt layer has dramatically changed the domestic oil industry, and its supply chain. According to the National Oil Industry Organization (Onip), the investment forecast for offshore exploration and production will reached around US$ 400bn in the next ten years – representing a great opportunity for domestic suppliers. “The outlook is excellent. There will be
large scale investments, profoundly changing the amount of orders”, states the general director of Onip, Eloi Fernández y Fernández. “Furthermore, another important factor is that there is, for the moment, a forecast that the investments will be maintained for more than ten years. This kind of continuity allows an industry to plan and motivates new investments. On the horizon, considering the current and future scenario is that the industry will increase its relative presence. Therefore, its role will be significant to national development in the upcoming years.” According to the executive, considering suppliers’ activities, the increase in installed capacity and the attraction of new players – which could set up partnerships with domestic industry – creates a good business outlook. “Therefore, all the investment made in exploration and production in the major discoveries of the last few years will have an inevitable repercussion on the advancement of the supply industry”, he points out. “With opportunities, we have got an estimated volume of the demand the continuity of this demand over a long period, and our ability to increase the level of local content in investments.” Fernández believes the marine and offshore industries will be the highlight of the year, and, thus, an entire group of industries involving suppliers will be pulled on by these activities.
Natural Gas Law According to economist Eduardo José Bernini, executive
expectations running on oil
president of Abiquim, the scenario is good. “There are projects under study or be implemented in order to increase the nation’s refinery capacity, especially with Comperj [Rio de Janeiro Chemical Complex]”, he says, pointing out that the regulation by the Natural Gas Law, ratified at the end of last year, opened great horizons for defining the conditions for consumer and producer access to the gas transport network. The regulation also establishes the operational regime of natural gas swaps, which still depend on regulation from the National Oil, Natural Gas and Biofuels Agency (ANP), and institutes, among other things, the Ten-Year Natural Gas Pipeline Network Expansion Plan, which will be reviewed annually. Another important aspect of the Natural Gas Law, especially for the chemical industry and of great importance to the petrochemical industry, was allow the National Council for Energy Policy (CNPE) to establish the directives for the use of natural gas as a raw material – aggregating even more value to the product. According to Guilherme Pires de Mello, director of Oil & Gas for the Brazilian Association of Industrial Engineering (Abemi), the current and future outlook is promising. “As far as Abemi associates are concerned (99% of which are Petrobras suppliers), the favorable scenario is reinforced by the policy for local content, which anticipates what will be bought within the country”, he states. He points out that this guaranteed demand represents the opportunities to acquire qualifications and the search for technology, allowing companies to implement strategic plans. “In
our point of view, this policy is fundamental, so that local enterprises reach a level of competitiveness that is more than mere compliance.” According to Mello, the development efforts all along the oil and gas chain, seeking to aggregate value, will potentialize the goods and services chain, offering opportunities to consolidate a local oil industry that will be able to compete globally. “The volume of the demand involved is, without a doubt, enough to develop a consistent industry”, he estimates. “The benefits, however, should go beyond the industry to reach to most diverse of segments, from education to logistics, from metalworks to retail.” Mello even recalls the process that has demonstrated the capacity of the oil and gas industry to mobilize: the creation of the pre-salt technology cluster at Ilha do Fundão (RJ). “Besides Cenpes of Petrobras, which has recently grown, companies such as Halliburton and TenarisConfab have already announced the installation of its research and development centers in the area”, he states. “More evidence can be seen by the creation of the development centers of the Baixada Santista (SP) and on the north coast of Espírito Santo.”
Electro-electronics: slow growth According to the Brazilian Association of the Electric and Electronic Industry (Abinee), the electronic industry underwent a great paradox in 2010. Despite the difficult environment, the industry enterprises have demonstrated the competence and capacity to meet market demands; most of the companies
closed the year successfully: the industry closed 2010 with an 11% growth in sales. “The figures show a year that was apparently good, but when analyzed more deeply, there are not that good”, says Humberto Barbato, president of Abinee, referring to the steep competition on both the domestic and foreign markets, cause by the valuation of the real against the dollar, which has made it difficult for the industry. “The investments of more than US$ 40bn that Petrobras will make by 2014 in oil and gas exploration projects will increase the amount of local content in supplies to the company”, he states. “We hope that this extraordinary value reaches all links in the oil and gas chain, which includes electro-electronic products.”
A market for all According to the Brazilian Association of Independent Oil and Gas Producers (Abpip), the great expectation for 2011 is for a policy that effectively permits investors to take advantage of the opportunities that the domestic reserves hold, creating growth for local economies. The president of the Association, Oswaldo Pedrosa, believes that, amongst the measures that must be considered, is widening the portfolio of the independents, whether by returning to the ANP auctions or by Petrobras contracting. In the latter case, service contracts would be created for areas under Petrobras concession with profile of independents. Another point T&B Petroleum # 30
21
Photo: Cortesia Estaleiro Eisa
perspective 2011
would be the commercialization of oil produced. “There has to be options in buyers besides Petrobras”, he states. “In 2010, the DaxOil refinery in Bahia appeared as an alternative. More should be coming up soon. The oil independents could even follow the example of the United States, where small and medium oil companies operate their own refineries. For that, however, production scale is needed.” Another issue is that the new regulation accompanies the complexity of the market. “The current one encompasses fields of various dimensions operated by companies of different sizes”, he states, adding
BNDES
Disbursements of BNDES reached R$ 168.4bn in 2010, representing an increase of 23% when compared to 2009. This amount includes the capitalization operation of Petrobras in the amount of R$ 24.7bn. Not including this operation– which was a one-off amount – the BNDES disbursed R$ 143.7bn last year, up 5% from 2009, which was compatible with previous projections. The industrial segment of the economy received the most in funding
22 T&B Petroleum # 30
that the independents still face the problem of the tax burden and access to credit. “It is true that the policy that is being drafted will not cover all the points of contention, since it will be broad”, says Pedrosa. “Meanwhile, it is important that there is a clear position on creating regulation for the segment of independents.”
Technological bottlenecks “Historically, the oil industry has always been one of the most organized areas of the economy and Petrobras has been the springboard for developing the entire production chain. There is no doubt that the investments forecast will be made”, assesses with 47% of the Bank’s total disbursements, followed by infrastructure with 31%. The portfolio of the Sustained Investment Program (PSI) surpassed more than R$ 120bn in 2010, with R$ 87bn in disbursements. The Special Industrial Finance Agency (Finame) of the BNDES System, alone, had a growth in disbursements of 119% last year, reaching R$ 52.7bn. According to the BNDES, the investment forecast in the economy for the 2011-2014 period will reach R$ 1.59 trillion, of which R$ 611bn will be for industry and R$ 378bn for infrastructure.
Alberto Machado, president of the oil and gas department of the Brazilian Association of Machines and Equipment (Abimaq). “The main worry is how to best take advantage of this investment for national development.” According to Machado, there are technological bottlenecks, due to innovation needed to meet the new challenges of the pre-salt. These bottlenecks are caused by the lack of sufficient scale to make local manufacturing feasible, as well as by the cost of raw materials, but the major problem is the unequal grounds with foreign competitors. “The domestic industry does not need protectionism; it just needs to compete equally, which it does not have today and which would allow the significant investments serve on behalf of the growth of the nation”, he explains. “Never has there been such a favorable scenario in terms of growth opportunities for the domestic industry. However, if nothing is done about these is-
Disbursements of the Merchant Marine Fund Year 2001
R$ Million 305
2002 2003 2004 2005 2006 2007 2008 2009 2010*
338 591 721 465 658 1.100 1.300 2.600 2.019*
*Position until October
Source: Sinaval
expectations running on oil
Brazil: not very competitive Brazil is behind important international competitors in eight factors that determine the competitiveness of domestic products: availability and cost of labor, availability and cost of capital, infrastructure and logistics, tax burden, macro- and micro-economic environments, education and technology and innovation. The relative position of Brazil among the 13 countries is in the Competitiveness Report 2010 from the National Industrial Confederation (CNI), released in December. The report compares the ranking of Brazil with 13 countries, selected according to economic and social characteristics, as well as participation in the international market. The countries are: South Africa, Australia, Canada, Chile, China, Colombia, South Korea, Spain, India, Mexico, Poland and Russia. Within this group, Brazil is in last position regarding availability and cost of capital, the 12th in infrastructure and logistics, and 13th in tax burden. According to the study, the country is only in front of South Africa regarding ‘availability and cost of labor’ and loses to nine others. Brazil is also among the last positions
for availability and cost of capital, infrastructure and logistics, and tax burden. Regarding the macro- and micro-economic factors that affect
the competitiveness of companies, Brazil is also among the last places: 14th in investment volume and in evolution of exchange rate. It is 10th place for attracting foreign direct investment, in 9th place for inflation rate, and in 8th place in gross debt of government.
76% 55% 40% 35% 29% 28% 26%
T&B Petroleum # 30
23
perspective 2011
sues, we will continue to be the country of lost opportunities”, concluded Alberto Machado.
From stem to stern The National Union for the Shipbuilding and Repair Industry (Sinaval) has stated that the Brazilian shipbuilding industry closed 2010 with sales of R$ 3.5bn. In 2011, the forecast is around R$ 8bn. “There is a planning horizon of 10 years for which the demand is clearly sized”, says Ariovaldo Rocha, president of Sinaval. According to the Union, there are 269 constructions underway. Another 140 have been announced. The oil production and transport segment continues to lead as the main contractor of the Brazilian shipbuilding industry. “Regarding the demands of Petrobras, the challenges are significant. The company will produce 4.5m barrels of oil per day in 2020. Each offshore
system will produce between 100,000 and 180,000 barrels per day, which will require around 40 systems that will cost around US$ 3bn - each”, he estimates. “The demand for vessels and platforms to meet the demand from Petrobras is estimated at: 200 offshore support vessels (five for each production system); 40 production platforms; and 30 oil tankers (Suezmax) to transport between platforms and terminals on the coast.” According to Rocha, the industry continues to produce orders from contracts signed in previous years. New platform contracts, support vessels and tankers are expected. Sinaval has 37 associated shipyards that are constructing 269 projects, of which 19 are platforms. Furthermore, the contracts announced will add another 39 vessels to the EBN (Brazilian Navigation Company) program; 30 rigs; another 30 support ships, for which their public tender is expected this year; almost 40 new tugboats and barges, totaling 400 projects – all of this without mentioning the con-
Slow but steady growth G lobal economic growth
should be slow this year, however, it should grow in a more stable manner when compared to 2010, according to the World Bank in its study: ‘Global Perspectives for 2011’, which projects a growth of 7% for developing nations in 2010, 6% in 2011 and 6.1% in 2012. According to the study, developing countries should overtake the growth of wealthier nations, which is projected at 2.8% in 2010, 2.4% in 2011 and 2.7% in 2012. The World Bank calculates 24 T&B Petroleum # 30
that global Gross Domestic Product (GDP), which grew 3.9% in 2010, will fall to 3.3% in 2011. For Latin America and the Caribbean, the World Bank estimates the growth should reach an average of 4% in 2011 and 2012. According to the study, most of the developing countries in 2010 showed gains in what is called international commerce. GDP in these countries last year grew an average of 5.3%. The outlook is positive, indicating the strengthening of this trend – with average growth of 6.5% this year and in 2012.
struction of 13 new small and large shipyards, which will make a total of 50 shipyards. “The industry needs financing. The participation of the Merchant Marine Fund (FMM) is vital”, he states. “On the other hand, the price of steel is not a problem for the shipbuilding industry. Brazilian and international steelworks have the production capacity for the demand. We do not have any bottlenecks; we have challenges that have been analyzed and diagnosed by Prominp. Among these challenges are increase competitiveness, train human resources and increase local content – and for each of them there is already a plan underway.”
Offshore support The president of the Brazilian Association of Offshore Support Companies (Abeam), Ronaldo Lima, states that the industry continues its constant and significant growth, with much investment yet to be made, due to the exploration of the done Campos and Santos basins and the start of the development phase of the Pre-salt. “The time is now and the forecast is excellent. The industry has an immense potential with the Pre-salt. Offshore support will certainly play an important part, with great challenges. The forecast is for an increase in the number of vessels, estimated at more than 500 over the next 10 years”, he states. “The main obstacle today is in training human resources to man the ships. Another would be the availability of shipyards for repair and docking.”
T&B Petroleum # 30
25
perspective 2011
A new pipeline era
comparable with other nations that also have extensive pipeline networks”, he concluded.
Increased oil and gas production will require more transport and distribution. Today, the country has a pipeline network of almost 22,000km in operation. This figure must grow, considering the country should reach around 3.9m barrels per day by 2020.
Best practices
Homework Later, the Pipeline Commission of the IBP indicated the CTDUT as an independent entity and representative of the Pipeline Community to coordinate 26 T&B Petroleum # 30
the matter, while able to turn to its associates for the necessary resources to draft the proposal. The Technical Cooperation Agreement that made the RTDT possible was signed in December 2006, valid for five years, and with the objective of developing studies and activities to support, in the present and future, the refinement of the regulations of the ANP as far as issues of operational safety of petroleum, derivatives, natural gas and biofuels transport installations are concerned. “To begin with, the operator companies have to present several documents to the ANP, according to article 3º of the Regulation, among which are the preliminary evaluation of pipeline or extension risk, according to the criteria establish by the RTDT, and the chronogram for implementing the constant requirements of the new regulations”, explains Bylaardt “After some years without any significant change in operational regulations for pipelines, this one has certainly come to meet the expectations of the industry, which is also concerned with the safety of pipeline transport, and placing Brazil at an official level of control and safety that is
Photo: Petrobras Agency
A
ccording to Raimar van den Bylaardt, president of the Pipeline Technology Center (CTDUT), the pipeline industry has some “homework” that should monopolize the operational discussions this year: fit the management of operational safety of land pipelines to comply with the new Technical Regulation n. 2/2011 of the National Petroleum Agency (ANP) – Technical Regulation for Land Pipelines for Transport of Petroleum, Derivatives and Natural Gas (RTDT), issued 03/02/2011. Recalling the lecture on the Operational Safety Program for Transport Facilities for Petroleum, Derivatives and Natural Gas, during a meeting of the Pipeline Commission of the Brazilian Petroleum, Gas and Biofuels Institute (IBP) in August 2005 at the ANP, this event highlighted the need to elaborate an operational safety model for pipeline transport installations, calling attention to the fact that the success of their actions would depend on the contribution and participation of all the agents involved along the entire domestic oil and gas chain that would have their activities regulated.
The CTDUT contributed with the studies of international best practices to integral management of pipelines and helped the ANP with the drafting of the Technical Regulation, as well as, together with the Pipeline Transport Commission of the IBP, held several discussions with the community. Now it is preparing to help operators with interpreting the RTDT and implement its requirements with a first workshop on the matter to be held on March 24th. For the pipeline industry, the year also holds yet another edition of Rio Pipeline, from September 20 – 22 at the Sul América Convention Center in Rio de Janeiro. “The participation in the technical program of Rio Pipeline is fundamental for the development of the industry in Brazil, whether by updating knowledge or the discussion on trends and industry expectations, or even by the exchange of knowledge it promotes”, states Van den Bylaardt. Taking into consideration the growth of the pipeline transport industry, which moves more than US$ 50bn per year around the world, the event is extremely important. In Brazil, it is estimated that by 2013 investments of around US$ 8bn are forecasted for pipeline network expansion projects.
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T&B Petroleum # 30
27
perspective 2011
Photo: Itaipu Binational
Photo: Keystone
Photo:Sérgio Coelho/CODESP
Infrastructure is (still) a problem
Lack of infrastructure is still one of the main problems in Brazil. Data from the Institute of Applied and Economic Research (Ipea) shows how Brazilian investment in infrastructure is small compared to other countries, such as China, Chile, Colombia, and even India.
T
here is a big chance for increasing investments in infrastructure. The Brazilian Association for Infrastructure and Base Industries (Abdib) forecasts that an annual investment of around R$ 160bn will be needed to meet general demand for infrastructure - 53% more than the amount for 2009. According to Paulo Godoy, president of the Association, infrastructure should be on the agenda of priorities of the new government. “No nation has been able to achieve higher levels of development with28 T&B Petroleum # 30
out solid investments in energy, transport, sanitation and telecommunications”, he says. “Brazil must step up investments and rely on a variety of sources for funding, both public and private, in order to provide access to both quality and quantity of infrastructure services”, he states. According to Abdib, one of the most important actions is the availability of long-term credit instruments for large sums with competitive financial conditions. “The positive outlook for infrastructure also reflects Brazil’s need to consolidate the regulatory framework, with clear and stable rules that will attract investors, with legal assurance and efficient regulatory agencies that are
independent and autonomous”, he says.
Staff On the other hand, there is still a problem with staffing – a historic problem in Brazil – characterized by the need to increase staff to meet new projects, as well as broadening the base of qualified professionals. Government estimates indicate that it is necessary to train 212,000 people between 2010 and 21034 to meet the demand of Petrobras for the period. This figure, done by the Program for the Mobilization of the National Petroleum Industry (Prominp) might even be a conservative number, since it does
not take into account the demand for specialized staff among other domestic and foreign oil companies that will be increasing activities within the country in the next few years. According to Alessandra Simões, of Fesa, the problem with staffing in Brazil presents a macro-vision of two difficulties: one regarding number and the other regarding qualification. “As far as number is concerned, there are several indicators in Brazil showing a lack of staff that is unprecedented in at least the last 30 years”, she states. This lack of staff is particular to neither region nor function, meaning there is a demand for professionals of various backgrounds in regions that, until a short time ago, went through a
great exodus of workers, such as in Amazonia. “This makes the problem in some regions a bit more acute, challenging management not only in qualifications of staff, but in attracting and retaining these professionals”, states Alessandra Simões. “From the point of view of qualifications, it is not any better. Much of the problem is due to the years passed in recession, when engineering was a synonym for unemployment or career stagnation”, she explains. “Many organizational structures at the time did not plan on preparing successors or professionals with management aptitudes. In this scenario, there is a lack of young managers to assume the most promising positions within the current projects and challenges of the Pre-salt and the Growth Acceleration Plan (GAP).” Another issue that makes this lack of staff even more critical is
the cost involved in these current projects: the amounts increase to double or triple costs of the past. “And if you are looking for professionals with experience in the size of these projects, the pool of professionals shrinks even more”, she points out. With a lack of staff and an abundance of opportunities, the market reacts in different ways. The most common are: an increase in the number of trainee programs offered, executive trainee programs and also, depending on the position, the search for professionals from other segments of the production chain, or even a completely different industry. Another movement that has helped the mangers of Brazil a bit is the inversion of the flow of staff. In the past, there was a flow of Brazilians leaving the country, looking for good opportunities abroad. Today, due to the amount of investment and the exchange
Brazil: investiments in infraestructure (R$ bn) 2004
2005
8,73
11,05
9,94
9,69
12,18
15,60
16,29
83,47
71,91
21,99
9,69
8,02
13,30
14,21
12,41
12,46
92,09
46,34
Road transport
5,87
5,53
3,86
5,40
6,74
8,67
9,36
45,43
24,08
Rail transport
0,82
0,72
1,11
1,90
3,24
2,53
2,74
13,06
8,26
Airports
0,46
0,58
0,57
0,55
0,74
0,89
0,57
4,36
2,43
Ports and harbors
0,33
0,44
0,20
0,44
0,50
0,58
0,72
3,21
1,18
Waterways
0,20
0,09
0,05
0,08
0,10
0,11
0,13
0,77
0,61
Sanitation
4,82
4,43
3,74
4,46
6,44
8,28
9,76
41,92
28,34
Total
43,22
32,54
27,48
35,82
44,15
49,07
51,03
284,31
183,14
Nominal GDP
1.302
1.477
1.699
1.941
2.147
2.322
2.558
13,446
8.386
3,32
2,20
1,62
1,85
2,06
2,11
2,03
2,11
2,18
Investiment/GDP (%)
T&B Petroleum # 30
Source: Ipea
2003
Telecomunications
2007
Total 2008-2010
2002
Electric energy
2006
Total 2001-2007
2001
29
perspective 2011
Investiments in infraestructure: selected countries (% of GDP) Brazil
Chile
Colombia
India
China
Vietnan
Thailand
Philipines
Total 2008-2010
Year/period
2007
2001
2001
2006-2007
2003
2003
2003
2003
71,91
% of GDP
2,03
6,2
5,8
5,63
7,3
9,9
15,4
3,6
46,34
Fonte: Ipea
rate, many Brazilians living abroad are interested in returning home, as well as foreigners seeking residence in Brazil. “In general terms, the solution is simple: stars are made at home. The companies need to understand and believe in the future of the country, as well as invest in the current generation, but also in the generations to come”, she concludes.
Technological innovation As far as technological research and development is concerned, the first big news since the beginning of the year was the gradual transformation of The Brazilian Innovation Agency (Finep) will be gradually transformed into a kind of ‘BNDES for innovation’. The National Petroleum, Natural Gas and Biofuels Agency (ANP) plans to double the credit volume of Finep for research and development in companies by 2014. The forecast is to disburse, on average, R$ 2bn per year, requiring and additional R$ 4bn to the current budget of Finep in four years. Last year, the disbursement of resources of the National Fund for Scientific and Technological Development (FNDCT) of Finep reached R$ 3.1bn, mostly in grants for research. Loans for company project reached R$ 1.21bn, ten times more than in 2002. “The process of capitalizing Finep must continue, doubling its credit capacity in four years 30 T&B Petroleum # 30
to increase the number of companies it supports for innovation”, says Glauco Arbix, the new president of the institution, who took office in January. A sociologist, ex-president of Ipea and professor at USP, Abrix replaces Luiz Manuel Fernandes, who was at the head of Finep since June 2007. The role as a development bank would give Finep more instruments to capture resources, as well protecting the institutions from contingencies. On the other hand, in light of the difficulty in measuring the risk of financial operations for innovation, broader demands would be required to protect the exposure of the institution. “In Brazil, there is nothing similar”, says Abrix, in a collective interview. The new president considered that the way of capitalizing Finep to accompany the change in its institutional profile has not yet been defined: it may be done by an assignment from the National Treasury or capturing resources from the market. During his inauguration speech, Arbix confirmed that Finep already needs more resources this year to be able to keep up with demand of projects. Afterwards, he explained that, even if the government’s fiscal austerity impedes the target of doubling credit lines this year, he
hopes to compensate in the following years.
Environmental sustainability On the other hand, the Ministry of Environment (MMA) announced this past January more rigid rules for environmental licensing to the industry. “This is the result of five years of discussions and studies based on the consultations of state agencies, technicians and Ibama”, says the minister of the Environment, Izabella Teixeira, to journalists at the headquarters of BNDES, in Rio de Janeiro. According to the minister, the rules have already taken effect for the new bid rounds for exploration blocks for the regions both in and out of the pre-salt, and for government auctions scheduled for this year, one of which is for areas outside the pre-salt regions (11th Bid Round), and another in the much-desired new frontier. Izabella Teixeira classified the new rules as “measures to modernize environmental licenses” granted in Brazil. “It is more rigorous, more meticulous, with real costs more effective and with more sustainable environmental practices, without having to deal with the red tape that has been in the environmental area of this country”, she assesses.
Photos: MCS Image Bank and Petrobras Agency
Installation contractor for offshore industry Services Modec International LLC: installation contractor for the projects FPSO Cidade do Rio de Janeiro, FSO Cidade de Macaé, FPSO Cidade de Niterói and FPSO Cidade de Santos – mooring and risers installations procedures; logistics and materials specifications; anchors installation surveyor. Prosafe: FPSO Polvo – Mooring Masters for towing and positioning. Petrobras: four more Pelikelos (350 ton) to perform torpedo lauching, mooring services on onshore terminals; oil spill booms; oil spill recovery. MCS is authorized to operate as a Brazilian shipping company by Antaq – The National Agency of Maritime Transportation.
Av. Nilo Peçanha, 26 - grupo 904/905, Centro ISO 9001
CEP 20.020-100 – Rio de Janeiro – RJ – Brazil Phone: +55 21 2524-0296 – Fax.: +55 21 2532-4671 T&B Petroleum # 30
mcs@mcsengenharia.com – www.mcsengenharia.com
31
perspective 2011
Petrobras: the goal is to maintain the pace of growth
W
ith total oil and gas production reaching a daily average of 2.58m barrels of oil equivalent (oil and gas) and a volume 2.3% higher than the 2.52m barrels of oil equivalent produced on average throughout 2009, Petrobras hopes to maintain the same pace of growth of recent years and reach a high of 3.5% and 4% for oil and gas production in 2011. The Tupi field in the Santos Basin is forecast to produce an average of 50,000 barrels per day in 2011, and expected to reach a peak of 70,000 barrels per day end of next year, with a possibility of reaching 75,000 barrels. The unit should reach maximum capacity of 100,000 barrels per day by 2012.
At the beginning of January, Petrobras stated that proven reserves according to SPE criteria reached 15.283bn barrels of oil equivalent, up 7.5% compared to 2009. By the same criteria, the ratio of reserves/production was placed at 18.4 years. According to the criteria of the Securities Exchange Commission (SEC), reserves were up to 12.7bn boe, up 5% against the previous year. The production time with the current reserves would be 14.7 years. According to a report issued by Merrill Lynch, the growth of Petrobras is much higher than its competitors, taking into consideration the great volumes of oil to be incorporated in upcoming years.
When in 2009 Petrobras incorporated just 182m boe in the pre-salt region, this year the company has incorporated 1.281bn boe. Merril Lynch states that in 10-15 years Petrobras production will double due to the strong contribution of the pre-salt, and for this reason, maintains their recommendation to buy. Petrobras is revising a daring business plan of 224bn dollars in 5 years. In 2010, the company successfully capitalized 120bn reais, which improved its indebtedness. The revision of the company’s business plan 2011-2015 is scheduled to be issued in the second semester of this year.
New platforms: chart of orders (2010) Brazil
Field
P‐55 semissub
Roncador | CB
Total
–
EAS/Quip
1.600
P‐56 semissub
Marlim | CB
Total
–
BrasFels/Technip
1.200
P‐57 FPSO
Jubarte | ESB
Modules
Casco
BrasFels/SBM ‐ Keppel Fels
nd
P-58 FPSO
Baleia Azul | ESB
Modules
Casco
Under tender – hull Keppel Fels Singapore
nd
P‐61 TLP
Papa-Terra | CB
Total
Floatec (Keppel Fels and RJ Mc Dermott)
1.100
P‐62 FPSO
Roncador | CB
Casco
Jurong (ES)/Jurong Singapore
94 (hull)
FPSO Cidade de Santos
Uruguá | SB
Total
Modec – rent
nd
P‐63 FPSO
Papa-Terra | CB
Casco
Quip/BW Norway
1.300
FPSO Cidade de Angra dos Reis
Tupi | SB
–
Total
Modec – rent
nd
FPSO Cidade de Paraty
Tupi Nordeste | SB
Modules integration Brasfels
Casco
Schahin/Modec e SBM/Queiroz Galvão hull convertion Keppel Fels – Singapore
nd
FPSO Cidade de São Paulo
Guará | SB
Modules integration
Casco
Schahin/Modec and SBM/ Queiroz Galvão
nd
FPSO Hulls – 08
Pre-salt | SB
Total – modules to tender
Ecovix – Rio Grande (RS)
nd
– Modules – Modules
International
–
Construction
Value (US$ m)
Platforms
CB – Campos Basin | ESB – Espírito Santo Basin | SB – Santos Basin
32 T&B Petroleum # 30
T&B Petroleum # 30
33
perspective 2011
An opportunity for advancement For many companies, the year 2011 started on the right foot with a bet on the growing market and activities for offshore Brazil, and on the demand of Petrobras in the pre-salt area.
34 T&B Petroleum # 30
Photo: Courtesy Wärtsilä
A
ccording to Elon Guimarães, director of the business unit for Oil, Gas, Chemicals and Petrochemicals of Progen, an engineering consultant company, managing and implementing the industrial projects, the role of industry in oil and gas in the next few years will be fundamental. “[the industry] will need a healthy dose of qualified professionals, development of new technology and, mainly, an increase in the levels of local content”, he estimates. “We will certainly see a great advancement in several areas in Brazil, and the petroleum industry will be one the key players in this development.” With 100% local content, Metalcoating is betting on anti-corrosive organic coatings. The technology has been increasingly used by Petrobras for the internal protection of tubes, valves, filters, pumps and metallic parts and accessories. “In 2011, we will consolidate Metalcoating’s activities in Brazil by participating in several projects in the oil and gas industry that are being implemented by Petrobras and that will mobilize the entire supply chain of the industry ”, points out Gilson Gama, the company ’s commercial manager. “We started the year on the right foot, with the revalidation of our IMS- Integrated Management System (ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007) and we are included in
the ET-200.03 of Petrobras, which demonstrates our recognition in the engineering are of PetrobrasE&P for the quality of our services”, he states. “This will certainly be a good year”. According to Luis Barcellos, general manager of the Ship Power division of Wärtsilä Brasil, the expectations for 2011 are excellent. “The market is booming due to the demands of the pre-salt. Recently, Petrobras issued an RFP for chartering of new offshore support ships, besides announcing the contract to construct and charter the first lot of seven rigs to be built in Brazil”, he adds. Barcellos pointed out that, historically, the petroleum industry has been pushed by the develop-
ment of technology. “However, this development is not limited to the technical are, since quality, safety, environment and even the economy also go together with the demand of the petroleum industry.” “We have several projects underway, among which is moving our services base to a new 6,000 m² area to be used for repairing, technical assistance, etc”, he states. “We are quite optimistic since Wärtsilä has a wide range of products, besides the experience and capacity to provide specific technical solutions for the needs of each project.
Local content guaranteed Global leader in specialized chemicals, Clariant Oil & Services has great expectations for its operations in Brazil, where it is already well-positioned for its local content: its manufacturing units are ready
Photo: Petrobras Agency Photo: Usiminas
industrial park currently responds for nearly 90% of the products sold by the company in the domestic market. “This is a competitive advantage in a country where the forecast is for growing demands on local content”.
Shipping industry grows even more in 2011
Ilustration P-55: Petrobras Agency
to meet the demand for chemicals in the exploration and production industry. The Swiss company, which has 11 contracts with Petrobras in the chemical segment for offshore platforms, has been developing products geared for the pre-salt for two years. In December, the company signed its first contract for the pre-salt region, for the FPSO Capixaba, operating in the Parque das Baleias field on the coast of Espírito Santo. The increasing offshore activities on the Brazilian coast, in the pre-salt regions will demand a high volume of chemical products for both the exploratory and production phases, which present new challenges to the supply chain for these specialty items, which go from drilling fluids to anti-foaming agents and corrosion inhibitors. “Being aware o f Pe t r o b r a s ’ needs, we have already expanded our production capacity to meet the company ’s demands when reaching production of 4m barrels in 2020”, states the vice-president Oil & Mining Services Business Unit for Latin America, Carlos Tooge. The expectation of the chemical industry is that the demand will double in these first few years, during which will be the mostly exploratory activities, which utilize chemical products for drilling, completion and well stimulation. According to the executive, the demand will be even more as of 2012, when the several long-duration tests (LDTs) are initiated, pilot projects and new units scheduled for the development of the fields of the pre-salt. The investments were specially allocated for its industrial unit lo-
cated in Suzano, São Paulo, which today is Clariant’s second largest factory in the world. In Brazil, the company also has plants in Resende and Duque de Caxias, in the state of Rio de Janeiro, besides another unit for logistical support in the city of Macaé. The executive confirmed that the company is ready to meet the demand for local content in future Petrobras contracts. The company is one of the few in the industry capable of producing locally, since its
With the global expansion of maritime transport, the industry began the year at full speed. By the end of 2015, domestic shipyards will deliver 49 vessels for the Program for the Modernization and Expansion of the Transpetro Fleet (Promef). “The ship industry is booming. The orders are enormous, and require high technology, time and professionals. The investment in technology should be the priority, taking the level of market demand even higher ”, says Adauto Riva, technical and product manager of Renner Protective Coatings, manufacturer of highly resistant, anti-corrosion paints. In 2010, the company did the maintenance of modules for the P-55 platform, and the platforms in the Campos Basin and Macaé, among others. T&B Petroleum # 30
35
perspective 2011
Oil and gas industry on the move and new contracts signed 2011 began with several contracts signed among oil companies, mainly Petrobras, which continues its investment plan in refineries and oil and gas exploration and production equipment for the Campos and Santos basins. by Rodrigo Miguez
36 T&B Petroleum # 30
assembly of yard equipment. The UCR is the unit responsible for the conversion of diesel of 70% of the load to be processed at the Abreu e Lima Refinery. Commercial agreements were also signed with GE Oil & Gas. The company signed two new contracts, worth US$ 50m, which include the supply of 171 subsea wellhead systems for Petrobras. The equipment will be used for the Petrobras projects in the Campos and Santos Basins. Odebrecht Óleo e Gás (OOG) signed two new contracts for Mounting and Maintenance (M&M) for the Peregrino field in the Campos Basin (RJ). With this project, OOG will attend Statoil Brasil and Maersk FPSOs Brasil. The contracts, worth nearly US$ 60m, encompass the engineering, planning, supply, manufacturing, mounting and mainte-
nance areas, involving the fields of structures, piping, equipment, electricity, instrumentation and commissioning. The term of the contracts between OOG and the two companies will be four years. The Atlântico Sul Shipyard (EAS) won the public tender for the construction of seven ship rigs for Petrobras. The final price was US$ 4.6bn (around US$ 662m per rig). “We are very pleased with the news. The new order reinforces our position and guarantees the continuity of industry in the country”, commemorates the former president of EAS, Angelo Bellelis. The result of the public tender for ship rigs was announced on February 11th. This first package integrates a total of 28 maritime drilling units to meet the needs of Petrobras’ long-term drilling program. The priority of the rigs will be the wells of the Pre-salt.
Photo: Petrobras Agency
Photo: Bia Cardoso
A
t the beginning of the year, Petrobras signed a contract for the construction of the new Diesel Hydrotreatment Unit (HDT II) and the new Hydrogen Generation Unit (UGH II), at the Alberto Pasqualini Refinery (Refap), in Canoas (RS). The HDT II will have the capacity to treat 6.000 m³/day of low-sulfur diesel (10 ppm), in order to comply with environmental legislation and to improve air quality. The UGH II will have a production capacity of 1.250.000 Nm³/day de hydrogen, with a purity of 99%, with the added advantage of being able to carry natural gas, refinery gas, butane and nafta. The construction will take three years, with a local content index of 70%. Another important contract signed by Petrobras was for the engineering, procurement and construction (EPC) of the Coke Handling Unit (coke yard) of the Abreu e Lima Refinery in Pernambuco, one of the major projects in the company’s investment plan until 2014. The agreement, made with the Fidens Engenharia and Milplan Engenharia Construção e Montagens companies, covers the project of the coke handling system; equipment supply (semi-gantry cranes, crushers, belt conveyors, reclaimers, sistemade truck loading and weighing system, and billing); construction of the coke yard, as well as its buildings and
T&B Petroleum # 30
37
r&d
Research through partnership:
new R&D centers
in the Brazilian oil production chain
The internationalization of these centers is starting to accelerate and Brazil is gaining an ever bigger share of the market. These large multinational laboratories have the objective of generating knowledge and developing technology for innovative products destined for the market in general or specific clients. The importance of these centers for Brazil lies in the growing sophistication of the technology produced by companies here and the hiring of hundreds of Brazilian researchers, most of whom have PhDs by Maria Fernanda Romero
38 T&B Petroleum # 30
Area: 8,000 m² Investiment: US$ 50m For the development of new oil and gas technologies, mainly for developing solutions of the pre-salt. Company facilities: GE, Halliburton, FMC, Usiminas, Tenaris Confab and Baker Hughes.
Photo: Petrobras Agency
I
n 2010, plans to build various new research and development (R&D) centers in Brazil were announced. The positive outlook for the country’s oil, gas and energy sector and the pre-salt discoveries are the main drivers behind domestic and international companies’ growing interest in expanding in this area. There has been consistent encouragement for research and innovation in the oil, gas and energy areas in recent years in Brazil. Research and technological innovation ensures greater competitiveness in the market and, in the case of the oil and gas sector, this has also helped to improve safety, reducing risks in exploration activities. As the main challenge in research and innovation still lies in raising the capacity of the supply chain, companies are seeking to create their own research and development centers, to increasingly specialize and improve their activities and train their employees. Rio de Janeiro has been much favored by companies as the location for these centers. In particular, the state Technology
Photo: Petrobras Agency
Park on Fundão Island has excellent access to laboratories, highly qualified professionals and new business opportunities, and is a hotly contested location. According to Maurício Guedes, director of the Technology Park, more than R$500 million of investment on Fundão Island was announced in 2010 alone. There are various other key factors why companies are building research centers in the state of Rio de Janeiro. These include the state’s strategic location, its infrastructure, its easy access to raw materials, its railroad and port facilities, its demand clusters (in petroleum, shipbuilding, the auto industry, etc.), its workforce training facilities and institutional support, especially from the state government. By 2014, a number of multinationals will have research centers operating on Fundão Island. For neighbors, they will have the main campus of Rio de Janeiro Federal University (UFRJ) and Petrobras’ Leopoldo Américo Miguez de Mello Research and Development Center (Cenpes). In 2010, the first company to announce it would build a research center in the state was FMC Technologies. The company, a leader in technology solutions for the oil and gas industry, unveiled its plans for a center in the Technology Park last June. According to Paulo Couto, FMC’s vice president of technology, engineering and emerging products, the US company will invest approximately R$70 million in the center’s infrastructure alone. Mr. Couto says that investment in human resources
Rio de Janeiro Technology Park The Technology Park was established in 2003 with the aim of stimulating interaction between the university’s students and staff and companies that work with innovation. The 350,000 square meter park is designed to host knowledge-intensive companies in different fields. It is now home to six companies and a further three are expected to move in by mid 2011. The big attraction for these companies is the park’s strategic positioning, proximity to the airport and ease of interaction with university students and staff. and technology will also be significant. FMC’s center will employ around 300 engineers dedicated to researching subsea technologies for oil and gas exploration in the country, for both pre- and post-salt. The center will have an R&D unit, testing and training laboratories, integration testing facilities and an area for creating life-size prototypes. Operating under a 20-year contract, this will be the company’s first research center in Brazil, and will cover an area of around 20,000 square meters. Mr. Couto explains that building work began immediately after the announcement of June 2010 and that the center
should be fully functioning by the middle of this year. Also in the second half of 2010, in October to be precise, oil company Repsol announced its sponsorship of one of five laboratories specializing in oil and gas to be built at the Coppetec Foundation’s Technology Center no. 2 (CT2) on Fundão Island. The Spanish company is participating actively in research conducted at the Petroleum Reservoir Impact Modeling and Eco-management Laboratory (LMIERP). According to the company, a total of around 50 people will work at LMIERP, including professors, administrative staff and postgraduate students. The center was inaugurated in November. Repsol’s laboratory is focusing research on preserving biodiversity during petroleum T&B Petroleum # 30
39
r&d
FMC R&D Center Area: 20,000 m² Investment: R$70 million (in infrastructure alone) Expected startup: second half of 2011 - Testing and training laboratory, integration testing facilities and fullscale prototype area.
Schlumberger Brazil Research & Geosciences Center (BRGC) Area: 8,000 m² Investment: US$50 million - Focused on the development of new oil and gas technologies, in particular to create pre-salt exploration solutions.
Usiminas Technology Center
Schlumberger Brazil Research & Geosciences Center (BRGC) GE Global Research Center FMC R&D Center
drilling and exploration operations, evaluating the lifecycle of oil industry inputs, producing biofuels, environmental logistics in E&P, and eco-efficient modeling of petroleum reservoirs.
Schlumberger: pre-salt in the Technology Park In November of last year, multinational Schlumberger was the first company to open a technology center focused on presalt in the Technology Park. The 8,000 square meter Schlumberger Brazil Research & Geosciences Center (BRGC) is the company’s 40 T&B Petroleum # 30
first research facility dedicated to oil exploration and production activities in the Southern Hemisphere. Around 300 employees work at the site, including scientists, engineers and technicians. US$50 million has been invested in the project. BRGC is concentrating on developing new technologies in the oil and gas area, in particular to develop solutions to technical challenges found in deep waters off the Brazilian coast. The center is designed to integrate geosciences and engineering in order to improve oil
Area: 3,600 m² Expected startup: first half of 2012 - Designed to develop new steel application technologies for the oil and gas, shipbuilding and offshore sectors, especially to meet pre-salt demands.
Halliburton and Tenaris Confab R&D Center Area: 7,000 m² (Halliburton) and 4,000 m² (Tenaris Confab) Investment: R$26 million (Halliburton) and R$36 million (Tenaris Confab) Expected startup: end of 2012 - Focused on research into characterizing and monitoring reservoirs, and the productivity, construction and completion of oil wells. and gas production and recovery from deepwater reserves in the Brazilian pre-salt area. According to the company, BRGC will eventually operate three units: the Geoengineering Research Center, which will conduct research in cooperation with clients and universities; the Geoengineering Technology Center, which will develop
research through partnership: new R&D centers in the brazilian oil production chain
Photo: Petrobras Agency
Cenpes is expanded
In October 2010, the Leopoldo Américo Miguez de Mello Research and Development Center (Cenpes) expanded its research capacity to meet the needs of pre-salt exploration. The Petrobras center was reopened after a US$700 million investment to double its size. Following the expansion, it now has 800 researchers and 137 laboratories and is one of the largest research complexes in the world, covering over 300,000 m².
Located in Rio de Janeiro, Cenpes is equipped with various laboratories designed to meet technological needs in the fields of biotechnology, fertilizers, biofuels, water reuse, petrochemicals and environmental assessments in the locations where the company operates or plans to operate. The research center now also has modern laboratories focused on developing pre-salt solutions. Of the
ten new laboratory blocks, five are dedicated to pre-salt, concentrating on classifying rocks and studying their interaction with the different fluids present in them (petroleum, natural gas, water, CO2, and so on). At the reopening ceremony, the president of Petrobras, José Sergio Gabrielli de Azevedo, said that the expansion work had generated around 6,000 direct jobs and 15,000 indirect jobs.
software applications based on Schlumberger’s and WesternGeco’s Ocean and Petrel platforms; and the WesternGeco GeoSolutions unit, which will be dedicated to developing optimized geophysical solutions for the Brazilian coast. In addition to these units, BRGC will have three integrated laboratories for testing and evaluating rocks and fluids in controlled environments.
for the oil and gas, renewable energy, mining, railroad and aviation industries. Work on building the complex, which will employ around 300 researchers and engineers, began this year and is expected to be completed at the end of 2012. “We chose Rio de Janeiro as it has strong transport and logistics infrastructure and it is close to our clients and a number of universities,” says João Geraldo Ferreira, president and CEO of GE Brasil, adding that cities such as Belo Horizonte, Campinas and São José dos Campos were also considered for the project. Alongside the Global Research Center, GE is building a US$50 million training center for its employees. When the company unveiled its plans for the two centers, it signed cooperation agreements with government
entities, universities and Brazilian companies. For example, Vale and GE signed a technical cooperation agreement focused on energy generation, storage and distribution projects. Through the agreement, the two companies can exchange knowledge and experience and work together to share information about the Global Research Center’s activities, to help develop technologies and cooperate in identifying promising areas for research and development. Also in November, Usiminas laid the foundation stone for its technology center at the Technology Park. The steelmaker will occupy an area of 3,600 square meters at the park, located on Fundão Island, also known as the University City Island. The aim of the project, which is due to begin
GE Global Research Center in Brazil At the start of last November, GE announced it would open its fifth Global Research Center in the Rio de Janeiro Federal University (UFRJ) Technology Park on Bom Jesus Island, which is joined to Fundão Island. The US$100 million research center will focus on the development of advanced technologies
T&B Petroleum # 30
41
r&d
operating in the first half of 2012, is to develop new steel application technologies for the oil and gas, shipbuilding and offshore sectors, especially to meet presalt exploration demands.
Halliburton and Tenaris Confab December 2010 saw a further announcement, as Halliburton, an oil exploration and production service provider, and Tenaris Confab, a manufacturer of steel
pipes, signed a contract to build research facilities in Rio for developing new technologies for the oil and gas sector. The research unit will focus on two areas: the characterization and monitoring of petroleum reservoirs; and the productivity, construction and completion of oil wells. It is expected that construction work will begin in the second half of 2011 and will be completed
IBM to have research center in Brazil In June of last year, IBM announced it would establish a research center in Brazil to focus on the natural resources area, especially oil and gas. Oil exploration in the pre-salt area is expected to generate specific research assignments at the center, to help meet enormous challenges in exploration, production and logistics. “We are going to operate in these areas, bringing to bear our skills in the areas of modeling and simulating geological processes and engineering systems, high-performance computing, intelligent digital fields, massive data analysis, optimization and logistics,” says Ulisses Mello, director of IBM’s natural resources area. According to Mr. Mello, various factors contributed to the decision to open the laboratory in Brazil, including the maturity of the country’s educational system, the availability of technical talent, an abundance of water and other natural resources, the upcoming mega-events (World Cup and Olympics) and a government policy backing science and technology. IBM has eight research centers in six countries, employing more than 3,000 scientists and engineers. The negotiations between the company and the Brazilian govern42 T&B Petroleum # 30
ment lasted a little under three months. Abu Dhabi and Australia were also in the running to host the center. Three government bodies worked to bring this investment to Brazil: the Ministry of Development, Industry and Foreign Trade, the Ministry of Science and Technology, and the National Development Bank (BNDES). Mr. Mello explains that the center’s research into natural resources will include the advanced management of water, minerals and agriculture, especially biofuels, and he points to another key area for research: “Intelligent human systems, in particular largescale events. The aim is to develop innovations to be used at the major sports events to take place in Brazil, including the 2014 World Cup and 2016 Olympics. This work also incorporates service science, based on understanding, modeling and simulating systems focused on quality, efficiency and productivity, as well as intelligent devices that can be created by using advances in the area of semiconductors.” According to Mr. Mello, some of the research laboratory’s activities commenced soon after the company’s announcement in June 2010. “Facilities at one site were official inaugurated in March 2011, in Rio de Janeiro. The São Paulo unit will be opened shortly. We are in the process of hiring researchers and we are already discussing strategic partnerships with companies and universities,” he says.
by the end of 2012. Investment in the center may reach R$62 million. Halliburton, which will occupy a 7,000 square meter site, is set to invest US$10 to US$15 million (approximately R$26 million) to build its center, where it plans to develop solutions involving well simulation and performance, electronics and 3D software and visualization. The research laboratory will work in research areas related to natural resources, semiconductors, largescale events and service sciences. “In the oil and gas area, we will concentrate on the numeric modeling of geological and geophysical processes, and the optimization of integrated reservoir management operations. We will be very involved in the development of technology and processes that can transform our large cities into ‘intelligent cities,’ making them a lot more sustainable by raising the efficiency of transport, energy and especially the management of disasters such as floods, landslides, and so on,” Mr. Mello explains. He says that in Brazil, IBM has not yet signed any contract in the oil and gas area, but it is discussing strategic partnerships with companies and universities. Globally, IBM has worked on various projects in this area, for example with Statoil in the integrated operations area and with Shell in reservoir management, developing new methodologies for incorporating 4D seismic data in the historical adjustment process. “This research laboratory in Brazil is IBM’s ninth in the world and the first in the Southern Hemisphere. We will be working in an integrated manner with our other global labs, which together employ approximately 3,000 researchers, most of whom have PhDs. However, our intention is to lead petroleum research from here in Brazil, with the support of the other global laboratories,” he concludes.
Tenaris Confab’s research center will occupy a 4,000 square meter site and will concentrate on the R&D, mining, construction and auto industry sectors. The company’s aim is to develop new pipe-welding technologies, test and simulate large-diameter pipes and study metallic polymer liners. There will also be a specific facility for premium TenarisHydril connections, specially designed for drilling operations. The company plans to invest around US$21 million (approximately R$36 million) in the center. In addition, in March of this year, BG Group announced it would establish a Global Technology Center in Brazil as the first step to developing worldclass technology solutions in the country. The center will manage projects in line with priorities
Photo: Courtesy of Tenaris Confab
research through partnership: new R&D centers in the brazilian oil production chain
agreed upon with the National Petroleum Agency (ANP). At the same time, BG signed a memorandum of understanding with the University of São Paulo’s Polytechnic School to develop research projects in the oil and gas sector, as part of its R&D investment plans for the country. “Besides forging partnerships with universities and making investment in infrastructure, the center will develop new technologies and contribute to training high-level human resources
across the country,” said the chairman of the BG Group, Sir Robert Wilson, who came to Brazil to announce BG Brasil’s US$30 billion, ten-year investment plan. The BG Global Technology Center (GTC) will manage research programs to be carried out in Brazil. Pre-salt, drilling, operational safety and the environment are some of the areas of focus. BG Brasil plans to invest US$1.5 billion in the program by 2025. According to the company, GTC will be the BG Group’s research epicenter and will pursue solutions to all of the group’s technological challenges on a global scale. The center’s work will concentrate on research, development and the application of studies and plans produced in partnership with Brazilian academia and service providers based in Brazil.
usa/brazil Barack Obama in Brazil
“This is a country of the future no more”,
says Barack Obama
According to the US President, oil and renewable energy will drive a new and prosperous economic relationship between the two countries. by Cassiano Viana
It is a two-way street that also creates more opportunities for Brazil. 44 T&B Petroleum # 30
Photo: Petrobras Agency
A
midst the international crises of Libya and Japan, US president Barack Obama visited Brazil in March, on a mission to strengthen the relationship between the two countries, as well as create more space for US exports and, consequently, more jobs for Americans. After starting his visit in Brazil in the capital of Brasília, where he was received by President Dilma Rousseff and participating in meetings with businessmen of the two countries, Obama continued on to Rio de Janeiro to give a speech in the Theatro Municipal. During the speech, Obama praised the advancement of democracy and of the Brazilian economy and stated that, after years of being called the country of the future, Brazilians should know the future has arrived. “It is here now”, he exclaimed. According to Obama, Brazil is becoming a model for the future.
Photo: Renato Araújo, Agência Brasil
The importation of oil was one of the main issues on the agenda of the American president in Brazil. In light of the rising oil price and the crises in oil producing nations of the Middle East and North Africa, the American government wishes to reduces its oil dependency and diversify its portfolio of suppliers. The White House has already expressed its desire to buy Brazilian oil for the long-term and anticipate the purchase of oil from the pre-salt. Brazil already has an oil presales agreement with China, which lent US$ 10bn to Petrobras in 2008 with a guarantee to import 200,000 barrels per day for a period of ten years. “The United States devour oil, consuming almost a quarter of world production and need to diversify their supply sources”, assesses economist and ex-director of the National Oil, Gas and Biofuels Agency (ANP), David Zylbersztajn. “Brazil can only win. It is like opening up a factory, already having a guaranteed buyer”, he stated. Obama travelled accompanied by a delegation of businessmen and several Secretaries, including the Secretary of Energy, Steven Chu. According to specialists, after the visit, the exploration of the pre-salt could gain a new push. In the opinion of the director of the Brazilian Center for Infrastructure, Adriano Pires, a presales agreement for oil would help new financial lines and could even accelerate the production schedule for the new wells discovered, “
Dilma Rousseff and Barack Obama, during the ending of the US-Brazil CEO Forum Discussion, in the Palácio Itamaraty
which may represent more investments and financing that would turn the pre-salt into a reality”, states the Director. However, the American interests go beyond oil. On the agenda were meetings on other industries, such as renewable energy, biofuels and nuclear energy. Brazil and the US are major producers of ethanol. The two countries already have a memorandum of understanding on biofuels, signed in 2007. The agreement provides for cooperation in research and incentives for the use of biofuels in other countries.
Interest in pre-salt During the Brazil-US Business Summit, an event organized by
the National Industrial Confederation (CNI), the Brazil-US Business Council and the American Chamber of Commerce (Amcham), Barack Obama confirmed that the US wishes to strengthen economic cooperation and widen its commerce with Brazil. “We see the chance to sell more goods and services to a rapidly-growing market… When our businesses send more products overseas, it supports the workers who make and sell those products”, stated the President, in a speech to almost 400 Brazilian and US businessmen. “It is a two-way street that also creates more opportunities for Brazil”, stated the President, praising the entrepreneurial capacity of Bra-
Getting closer The president of CNI, Robson Braga de Andrade, saw the creation of the Brazil-United States Commission for Economic and Commercial Relations as an important solution for the pending bilateral issues. “This agreement will effectively create a way of solving problems to avoid double-taxation and technical and sanitary barriers for bilateral commerce”, he stated. According to Braga, the participation of Obama at the Business Summit is a clear signal that, today, the US sees Brazil as a great ally – not only economic, but political. Regarding the importance the American president gave to US exports to Brazil, the president of CNI pointed out that there is a need to revert the bilateral balance of trade, which reached US$ 8bn in 2010 and may almost double this year. “Our mission, as Brazilian businessmen, is to change this scenario”, he stated. T&B Petroleum # 30
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We will be a major producer of oil; our discoveries will be the world’s main additional source of oil production in the next 10 years. José Sergio Gabrielli de Azevedo, president of Petrobras, during the event zilians, and pointing out that the economy of the country is in the international spotlight, stimulating investments and favoring bilateral partnerships. Obama highlighted that the US is interested in being a partner to Brazil in the exploration of the pre-salt. “We want to help you with the technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers”, stated Obama, who also mentioned that the two countries could also be partners in the production of renewable energy. Another area of interest is in infrastructure and participating in the construction needed for the 2014 World Cup and the 2016 Olympics. During the event, the president of Petrobras, José Sergio Gabrielli de Azevedo, said that global demand 46 T&B Petroleum # 30
Photo: Courtesy UNICA
Photo: Petrobras Agency
usa/brazil
for oil should increase with the return of US economic growth. Gabrielli pointed out the US government’s approval of the Petrobras project for oil and gas production in the Cascade and Chinook fields, in the American part of the Gulf of Mexico. “We are taking the FPSO production system to the Gulf of Mexico for the first time. The American regulator has recognized the safety and technology behind the project”. Regarding future projects, Gabrielli stated that Petrobras has broad horizons for increasing production. “We will be a major producer of oil; our discoveries will be the world’s main additional source of oil production in the next 10 years.” He also pointed out that the development of the pre-salt discoveries will require major investments and a mobilization of the supply chain in Brazil, the US and in several other countries around the world.
Regarding biofuels, Gabrielli stated that the forecast is for an increase in production and demand, especially in the transport industry. The company executive highlighted the project, on a semiindustrial scale, that Petrobras developed together with an American company to produce ethanol from the cellulose of sugar cane bagasse. At the end of the Summit, the president of Petrobras told journalists that he considered the attention of Barack Obama a very positive sign regarding the business relations with Brazil in the energy industry. “It is quite a change to have the American government consider the strategic value of business relations, which today are just on the commercial basis of the market. New channels and mechanisms are needed to give value to and facilitate these relations”, stated Gabrielli.
Brazil and the US to develop aviation biofuels Barack Osama’s visit to Brazil served for their governments to establish a partnership for the development of aviation biofuel, in order to reduce the industry’s greenhouse gas emissions. The partnership is set up to coordinate efforts and establishes common standards and specifications for aviation biofuels. A protocol was also signed to develop and cooperate in space research. With this agreement, the two countries have promised to strengthen partnerships in the private sector by creating a favorable environment for research and academic circles, as well as efforts for cooperation and incentives for the development of aviation biofuels. The agreement also mentions an interchange of Brazilian and US specialists.
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environment
Maritime Passive Safety drives the future of shipping towards eco safety
The Fast Oil Recovery System New technologies offer efficient solutions to cope with environmental consequences of Accidents at sea.
T
he new principle of Corporate Social Responsibility adopted by more and more shipping companies gets awareness at the International Maritime Organization (IMO), with an historic shift to Goal-Based construction standards for newly built ships[i]. Such a new angle sets new goals to be achieved covering safety and environmental protection. It marks a major change in the global maritime approach to safety regulation reflecting a fundamental switch towards a Risk-oriented Approach. In that respect accidental pollution becomes a significant environmental issue expecting technical solutions able to fully satisfy all shipping players as ship-owners, shipbuilders, authorities, insurers, class societies, flag administration.
The Risk-oriented Approach: switching from Eco Efficiency to Eco Safety A newly created association, the Maritime Passive Safety (MPS) Association, gathers the international expertise to provide 48 T&B Petroleum # 30
FOR Systems were born from an alarming statement that 20,000 ships permanently circulate on our seas at the time without any access on board to easily and rapidly empty the cargo and bunker tanks in case of accident. the ship with permanent onboard equipments and the shipping companies, with proper information and adapted processes in order to mitigate the deep consequences of an accidental pollution. Passive safety experts have notified the danger of current ship design when pollutant recovery operations have to be performed. Obviously the ship designs make great progress in Eco efficiency (Nox Sox, tratamento de água de lastro, anti fouling…) but a lack of knowl-
edge and consideration do not make such ships Eco Safe. This Eco Safe notion has been a main topic for JLMD Ecologic Group during 10 years of analysis led by a Risk Based Approach. The French based engineering company is one of the leading founders of the Maritime Passive Safety association. JLMD, with the Fast Oil Recovery (FOR) System, contributes to fulfill the lack of “postaccident” equipments onboard in the event of incident. The FOR Systems are emergency pollutant recovery devices for cargo and bunker tanks that are installed directly onboard ships. Each cargo or bunker tank is permanently equipped with a minimum of two security circuits that are immediately accessible through dedicated connectors located on the ship’s upper deck.
The FOR system: A smart solution to put shipping on the Eco Safety track The FOR system indeed allows to “evacuate” the polluting cargo from the vessel, ensuring an immediate and easy way for the salvage team to connect to
Image: Provided by the Company SVITZER
two hoses and recover the cargo. Through one of the circuits, sea water is injected by the salvage team. The system is then following Archimedes’ buoyancy principle, that oil, which is lighter than water, is propelled towards the top and entirely recovered via the other circuit. The FOR System enables bunkers to be rapidly recovered, thereby limiting the environmental consequences should there be an accident at sea. The system works with any kind of liquid pollutant. “FOR Systems were born from an alarming statement that 20,000 ships permanently circulate on our seas at the time without any access on board to easily and rapidly empty the cargo and bunker tanks in case of accident,” commented JLMD Ecology Group in a statement.”The FOR Systems end complex and slow salvage processes thanks to offering all-time, quick and standardized accesses to the cargo and bunker tanks for the salvage teams,” it added.
CMA CGM, the Worldwide N°3 container ship player, has been the first to equip FOR systems onboard (13 300 TEU) then equipping also series of 8 500 TEU and 11 400TEU built in south Korea. CMA CGM led the analysis Connectors installed in a container ship major accidents (grounding, with JLMD enhancing bunker wreckage), any incident as valve tanks piping diagram weaknessor pipes failures or off specificaes due to common piping intertion oil loading turn into time connection (venting / overflow) consuming spare procedures to which will disrupt any recovery correct the situation. Dischargprocesses forcing salvage coming or loading operations can panies to drill through deck or waste hours and sometimes days hull to access each tank. to face up to even small malfuncIf the regulation made tanks’ tioning. integrity great progress by movTo easily integrate the FOR ing the tanks away from hull (Marpol annex IV), unfortunately system as well as correct the disturbance due to unsuited piping in event of emergency situations diagram, JLMD re engineered the tank accesses are now more partially existing piping diagram complex. Furthermore beyond T&B Petroleum # 30
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Image: Provided by the Company SVITZER
environment
of CMA CGM ships, increasing significantly the accessibility of the bunker tanks. Each incident or accident has now a proper recovery process compliant with the FOR system installed, making the ship Eco safe. As Ludovic Gerard, director of fleet and new construction for CMA-CGM, explained: “With the FOR System, JLMD is answering a need that is growing within the shipping industry for efficient post-accident technologies. Our teams have worked together with JLMD in order to perfectly adapt the system to the container ships bunker tanks. This technological innovation is totally in line with CMA-CGM’s environmental strategy. It is now onboard of all of our new vessels.”
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The Maritime Passive Safety: Partnering with shipping industry to lead a greener future The system has been issued a new class notation by certification agency Bureau Veritas and has been backed by the the Centre of Documentation, Research and Experimentation on Accidental Water Pollution (CEDRE). “Ten years of research and development have been necessary for JLMD to develop the appropriate know-how now in compliance with the Bureau Veritas FOR Systems notation,” said Gilles Longuève, director of JLMD Ecologic Group. “The new FORS label edited by the certification agency confirms efficiency and great potential of our technology. We have
made sure we offer an effective, simple, tailor-made and immediately available solution for all the players of maritime transportation who wish to demonstrate their commitment in favor of environment,” he commented. The new authorities’ Risk Based Approach highlights the double objectives of the ship now to reach: Eco Efficiency and Eco Safety. The Eco efficiency is now well supported internationally to reduce the foot print of the ship during normal operation. It arises now the necessity to consider the Eco Safety of the ship when incident or accident occurs. French based JLMD Ecologic Group expects to have its Fast Oil Recovery Systems (FOR) fitted to at least 10% of the international maritime fleet by 2015. To date, 35 ships (bulkers, tankers, chemical product carriers, container ships and navy vessel)have been equipped with the FOR system.
JLMD Ecologic Group is represented in Brazil by BBLink exclusive agent for the FOR system .
HIGH-QUALITY I N F OR M AT I ON
At your fingertips Information technology is improving at an ever faster rate. It’s not enough to be fast at communicating facts: you need to act effectively, knowing where to find information and swiftly transforming it into news. You need to explain ideas concisely while also providing in-depth analysis of issues and promoting reflection. You need to show trends in various parts of this complex industry and provide an opportunity for all actors in this market to give their opinions. All of this can be found on T&B Petroleum’s website. We offer our users news, special reports, figures and indicators, interviews and analysis. You no longer need to look for information. We’ll do it for you. Visit us!
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The One Stop Shop
Brazilian Pavilion:
for the offshore international market by Maria Fernanda Romero
For the 12th consecutive year, the Brazil Pavilion, organized by the Brazilian Petroleum and Biofuels Institute (IBP) and by the National Organization for the Petroleum Industry (Onip), will be present at the 42nd edition of the Offshore Technology Conference (OTC). This year, the country will emphasize its offshore supply activities and not
BBrazilian razilian Pavilion– Booth Pavilion Booth # 1117#1117
Organization: ANP;
Organization: ANP; IBP; ONIP
IBP; ONIP
Participating Companies: ABEMI;
Participating Companies: ABEMI;
Altona; Altus; Automind; Chemtech;
Altona; Altus; Automind; Chemtech;
Coester; Device; Flexomarine; Grupo
Coester; Device; Flexomarine; Grupo
GP; Grupo IFM; Jaraguá; Keppel Fels;
GP; Grupo IFM; Jaraguá; Keppel Fels;
Kromav; LabOceano; Lupatech; MCS
Kromav; LabOceano; Lupatech;
Engenharia; Maxen; Metroval; Oceânica;
MCS Engenharia; Maxen; Metroval;
Orteng; Poland; Protubo; Radix; Rio
Oceânica; Orteng; Poland; Protubo;
Negócios; Sacor; Schulz; Stemac;
Radix; Rio Negócios; Sacor;
Subsin; T&B Petroleum Magazine;
Schulz; Stemac; Subsin; T&B Tomé Engenharia; Usiminas;
Petroleum Magazine; Tomé Vanasa; WBS; WEG
Engenharia; Usiminas; Va n a s a ; W B S ; WEG
just the Pre-Salt. OTC 2010 Exhibition area: 568,000 square feet (ft²) | Visitors: 73,000 | Companies: 2,400 | Contries: 40
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Photo: Courtesy
O
il exploration in the pre-salt of Brazil has not even begun and the world market has already taken note of the potential of Brazilian oil. The growth of oil and natural gas exploration and production in the deep waters has made the Brazilian offshore industry an important market that has grown rapidly over the last ten years. For this reason, many countries have kept their eyes open to prospect business in Brazil – a fact that can easily be seen from the innumerous meetings with foreigners, whether at the OTC where the Brazil Pavilion was largely visited and, more recently, on the occasion of the visit of Barack Obama, who made it clear that Americans – well-known giants of the oil and gas industry – wish to be the “customers” of Brazil. In 2010, The Brazil Pavilion occupied 550 m², of which 200 m² was exclusively for Petrobras. Besides the IBP, ONIP, and the National Oil, Natural Gas and Biofuels Agency (ANP), there were 37 companies exhibiting. This year, the Pavilion will have 36 companies participating from the most diverse segments of the Brazilian petroleum industry, of a total of 146 from Project Oil Brazil, which will cover an area of 511 m² in the main Pavilion of the fair. This is the eighth time that the IBP and ONIP have organized the Brazilian space with domestic suppliers. Regarding changes to the Pavilion, Bruno Musso, superintendent of ONIP, says that space for each company has been increased in
order to give them more visibility and allow them to receive their guests more comfortably. “We have also made some changes to the graphic communications by standardizing the booths in order to project the concepts we wish to promote (experience and the Brazilian tradition in supplying goods and services to the offshore oil industry)”, he points out. According to Musso, they have noticed the reaction to the good times of Brazil on the global market, due to the oil discoveries in the pre-salt, which have ended up sparking interest in acquiring knowledge of the Brazilian experience in the oil industry – a fact that has been very good for the fair’s participating companies. “The forecast for this edition of OTC is extremely promising and we hope to bring to Brazilian enterprises the possibility of taking advantage of this positive scenario to make new contacts and bring opportunities in the international market. It is also a good time to look for technology partnerships, and OTC is one of the best places in the world to explore this type of strategy”, state the representative of ONIP. According to Musso, the 36 exhibitors are from six states and will take 44
products and 37 services to OTC. Regarding products, the superintendent stated that emphasis will be given to equipment, such as valves, control panels and pressure vessels. With respect to services, engineering, software and industrial automation will be highlighted. For the fifth year, the Pavilion will count on the partnership of the Brazilian Trade and Investment Promotion Agency (ApexBrasil). The current plan, good for one year, provides R$ 2,000,000 in agency resources and counteroffers from companies and partners of R$2,598,000. “We have 8 target markets at the moment, which are: Peru, Argentina, Colombia, Qatar, Iran, Libya, Angola and Canada. This doesn’t actually mean that we assume activities with all of them, or that other markets might not be considered, but represents opportunities that the intelligence area of the APEX has detected”, states the superintendent of ONIP.
Growing interest Brazilian businessmen from across the industry are indeed interested in participation in the world’s most important event for development of offshore resources in the areas of drilling, exploration, production and environmental protection. According to Regina Cunha, senior
brazilian pavilion: the one stop shop for the offshore international market
commercial specialist of the US Commercial Service of the American Consulate (which coordinates the participation of the Brazilian delegation of businessmen to the event) there have been 270 registrations in the delegation as of April 4th. “The profile of the delegation includes companies representing equipment and services, engineering companies, manufacturers, oil companies, industrial associations, etc.”, she explains. Ms. Cunha says that they expect to reach 250 or more participants by the end of the month. The executive states that the mission organized by the American Consulate allows the businessmen to broaden horizons on opportunities and even offer advantages: “The participants of our delegation will receive wider exposure at the fair as they are invited to take part in the Business-to-Business Matchmaking Program with American companies, free of charge. Ms. Cunha also pointed out that the participating Brazilian companies will be registered in the databank of the US Commercial Service. “Since we receive proposals throughout the year from American companies looking for partners or Brazilian representatives, we always turn to this databank to show the American companies their Brazilian counterparts and foster partnerships”, she explained. “Besides the opportunity to prospect new business, the businessmen will have the chance to come face-to-face with the latest in international trends of the industry and apply them to their
products”, added the representative of the representative of the US Commercial Service of the American Consulate.
Great expectations According to the executive secretary of the IBP, Álvaro Teixeira, the forecast for the Brazil Pavilion at OTC 2011 is excellent, due to the entrance of new companies and the growing Brazilian presence at the event. “This systematically increasing participation of Brazilian companies at the event shows not only the export potential of suppliers, but the interested aroused in foreign buyers and partners about Brazil, which is currently a world reference in the offshore oil and gas industry.
According to the IBP, this fact represents the consolidation of this most important project to promote the domestic industry, which began 12 years ago, together with ONIP”. The superintendent of ONIP, Bruno Musso, states that the Brazilian participation at OTC is extremely important because it presents Brazil not only as a country with the most recent success in discovering oil, but also a country that holds a significant supply industry. “There are two important concepts: one is the face of the country, or rather, the strong presence of Brazil at the industry’s largest event; the other is the microeconomic face, where the Brazilian companies leverage business and promote their products, which, in the end, generates jobs and income in Brazil”, he says. According to Mario Jorge Coutinho of MCS Engenharia,
Focus on energy In 2003, at the time when she was Minister of Mines and Energy, Dilma Rousseff showed up at OTC in Houston. On the occasion, she confirmed the dedication of the Lula government to stimulate growth in Brazilian oil production, with the goal of reaching self-sufficiency (already achieved) and a broad schedule of projects for E&P, from both Petrobras and other oil firms that had already seen the country as strategically important on the international oil and gas scene. Last March, during his visit to Brazil, the president of the United States, Barack Obama, heard directly from the president of Brazil that her country wishes to be a great exporter of oil and gas, especially for the United States. Dilma Rousseff pointed out that this objective of the government is a strategy so that, even if there is excess oil and gas, there is no reduction in the amount of renew-
OTC 2004: Dilma Rousseff, Minister of Mines and Energy, at that time, visits Brazilian Pavilion, with Álvaro Teixeira (IBP), Benício Biz and Lia Medeiros (T&B Petroleum Magazine).
able energy, such as hydroelectricity and biofuels, in the Brazilian energy matrix – which is considered one of the world’s most balanced. Barak Obama has much to think about, especially considering that, although the USA is a major producer of ethanol, the country is dependent on the oil importations and is a voracious consumer of energy. T&B Petroleum # 30
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with the crisis in the Middle East and other places of instability around the globe, Brazil represents a place of secure opportunities. “The visit of president Obama demonstrates this very situation, and increases the expectations to explore the pre-salt ahead of schedule. This OTC will bring more opportunities to meet with not only American companies, but also assure the continued supply for their countries of origin”, he estimates.
Special participation Last year, just after one month of existence, Radix, an engineering and IT solutions company, was at OTC. Now, soon to complete its first year of business, the company will reinforce its participation at the event. “We cannot afford not to participate in the world’s largest offshore event. We expressed our interest to take part in the Brazil Pavilion for this year in May of 2010, and it was with great satisfaction when we got the confirmation that we would be participating in the select group of almost 40 Brazilian companies that will represent the country”, says Luiz Eduardo Rubião, director da Radix. According to the company executive, the company will present the solutions and services that Radix can offer the offshore market for the first time. The portfolio of Radix is based on engineering services and software that interact with each other, aligning process knowledge with software development in several fields, from conceptual 56 T&B Petroleum # 30
design to detailed engineering of greenfield units and the optimization/modernization of brownfield units. “We develop information systems and industrial IT, everything from the architecture and modeling until approval and commissing of a solution, and it some of this that we will be presenting at our stand”, says Rubião. The main objective of Radix at the event is to present itself to the offshore market, but according to the company director it is “to make contact with potential clients, suppliers and partners, besides representing Brazil as a genuinely national company, comprised of the best professionals from the best universities all over the country, who are highly prepared to overcome the challenges that lie ahead in our country, and particularly, this market – which is also part of the objectives of the Radix mission to OTC 2011”. “We expect to expose the high quality work of our team and show ourselves as a new Brazilian company, totally capable of attending the global offshore market”, explains the executive. Furthermore, Radix wants to shake the Brazil Pavilion at OTC 2011 with the result of a contest it has promoted among the best Brazilian Universities. The company invited 24 universities to participate in teams of two engineering students and one professor of the same university. Each team produced a video of up to five minutes on the theme of the contest, which were published on Radix’s Facebook fanpage. In the second phase, the five most voted will be evaluated by a panel and the winning team won round-trip tickets, lodging, and
OTC registration in Houston for the event, as well as a visit to the University of Texas. Furthermore, the five best videos will be shown at the Radix stand at the Brazil Pavilion at OTC. With this initiative, Radix hopes to demonstrate the Brazilian capacity to develop innovative projects of technical quality that can contribute to the active and promising petroleum industry. “We have already received confirmation from some participating universities, and many e-mails from interested students. We have high expectations about the material we will receive, and we will be evaluating the creativity and originality with which the teams explore the subject”, says Rubião.
The latest equipment A participant since OTC 2001, Orteng, a supplier of electric and electromechanic equipment and systems, will take to OTC this year its latest developments for the oil and gas market in the areas of production, prospecting, refinery, and transport of oil and gas, as well as its basis for constructing modules for FPSO and integrating these units at a shipyard located in the Porto do Suape, in the state of Pernambuco. The search for new partners for business development in Brazil and abroad, contact with decision-makers inside Petrobras, and establishing the Orteng brand as one of the major Brazilian companies are the main objectives of Orteng at the event. “This year we hope to tighten relationships and look back at the results of our commercial relations with our foreign partners,
brazilian pavilion: the one stop shop for the offshore international market
such as GE and Hytec, besides prospecting new partnerships with other companies that will create opportunities both in Brazil and abroad”, says the engineering director of Orteng, João Martins. In 2010, at the last edition of OTC, Orteng Engenharia announced the start of activities in the shipbuilding industry, via its partnership with Construcap. The project involves assembling production modules, integration and load-out, and even the manufacturing of jackets and semisubmersible platforms.
An experienced debut For the first time, Abemi, the Brazilian Association of Industrial Engineering, will be present at OTC. Some of the associations members have already participated at other editions, but this is the first time that the Association itself will participate with its own stand in the Brazil Pavilion. The president of Abemi, Carlos Maurício de Paula Barros, says that the objective it is publicize the fact that Abemi can be an entranceway for foreign companies to invest in the Brazilian oil and gas industry, since it is Abemi that brings together the main players in Brazilian industrial engineering, including companies for projects, construction, assembly, manufacturing and industrial maintenance. “We believe that Abemi can be a way for foreign companies
to exchange the experience and technology with our 135 associates, who are mainly suppliers of the oil and gas industry”, explains Barros. The executive explains that Abemi will take its market experience to the event, meaning more than 45 years of representing Brazilian industrial engineering, and adds: “We know that the demand for this industry is more than US$ 400bn by 2020, and so that the foreign companies also participate in the investment, they will have to get in contact with majors in Brazilian industrial engineering”. Barros says that Abemi has already received foreign groups who wish to get to know the Brazilian market and want to know which companies to exchange knowledge, what are the local market demands, etc. “Therefore, we believe that it is time to take our companies to meet these investors, so that they become more competitive, even on the international market”, he states.
Subsea technology Since Brazil began participating in the Pavilion in 2000,
Flexomarine, the only Brazilian manufacturer of submarine and floating hoses, has participated in the event. The director of the company, Gustavo L. Ferreira Leite, says that Flexomarine always gives a general overview of the company, highlighting a new product, which this year will be the duoflex hose for operating in FPSO spools. “At OTC 2011, we will present a product designed and tested in real scale to meet the demands of operations and certification, according to OCIMF (Oil Companies International Marine Forum) rules. We will give an institutional focus to the event, showing Flexomarine as a solid company in the market, and evolving”, explains the director. According to the executive, the Brazilian offshore market is bubbling, and forecast to double in the next 10 years. “Flexomarine is fully aware of this and has already implemented an investment plan to double production capacity, increase productivT&B Petroleum # 30
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ity and reduce costs, while maintaining quality”, he states. The Brazilian participation at the event, according to Gustavo, is extremely important, since Brazil is now the “golden boy” and the world’s attention has turned to the country. “To be present at the Brazil Pavilion calls attention and publicizes domestic companies to the world market – which can be demonstrated by the fact the number of participants has increased over the last five years”, he points out. At OTC 2010, Flexomarine announced the development of a new type of hose specially designed for spools for SBM.
Brazilian engineering Despite the presence of their company executives at OTC since 2001, Kromav, specialized in engineering projects and services, has participated with a stand in the Brazil Pavilion since 2009. Traditionally, the company presents its latest and most relevant projects in the offshore area. Their third year at the Pavilion, the company plans to show its involvement with the MOP-1 (Operation Module of PIGs) platform project in Bahia. The MOP-1 will be set for operations at a water depth of 28 m remotely. The unit, the first of its kind to be used by Petrobras, will be interconnected to the PLEM of Camarupim and should start operations in 2012. On the Espírto Santo coast it will meet the needs of the Baleia Azul pilot project and other systems for the area 170 km long, and will need to start by April 2012. 58 T&B Petroleum # 30
According to Ricardo Vahia, Director of Kromav, there are two main objectives for participating in the event: networking with the companies of the Brazil Pavilion and Petrobras Americas; and offer services to companies abroad. “During the fair, the atmosphere is favorable to new knowledge and, consequently, new business. Furthermore, we closed a contract with a Finnish engineering company that had a contract with Petrobras last year. This company contracted us due to our knowledge of feed and detailing projects for Petrobras”, recalls Vahia. Due to the business prospected at OTC events, the company participates until today. Vahia says that the expectation for OTC 2011 is great. “It is always great, since we have already had a return from each event, whether by contracts directly linked to contacts made at OTC, or by consolidating our name on the market. Curiously enough, upon the occasion of our first OTC event, we offered and won a contract with a major Brazilian project enterprise that is our market competitor”, says the executive. Vahia cites the visibility and opportunities to access new technology as important factors for Kromav to participate in the event. Regarding the engineering market of Brazil, Vahia considers it a difficult but extremely important market for the development of the country. According to the executive, the project is the beginning of any endeavor and has a very important impact on success. “It is a difficult market because of the competition with companies abroad and by the changes in the demand for services. There are periods of
hyperactivity, where the problem is getting a experienced workforce; there are periods of low activity, when we keep people idling, which is necessary since a project professional is hard to replace, although it incurs more costs”, he says. Currently, Kromav is involved in several projects, some of which are the contract for Leopoldo Américo Miguez de Mello Research and Development Center (Cenpes), where the company is developing several basic projects together with Chemtech and Exactum; the MOP-1 platform project for the Promon/MCE consortium; and a completion feed service for a company from Finland.
Automation For the first time as an exhibitor, Device – a company that specializes in software engineering and industrial automation system programming – will be participating in OTC. Device’s intention in showcasing its expertise in the oil and gas sector is to attract new partners interested in participating in its ventures in Brazil. The company stands out for its offshore work in northeastern Brazil, as part of EPC and other contracts for Petrobras and other clients. Approximately 90% of Device’s revenues come from oil and gas. The company is currently starting work on a new multi-million dollar contract in the region. “As this will be our first time as an exhibitor, our idea is to show visitors – including executives from Brazil and other countries – Device’s strategic positioning, which is focused on adding value across the board, from the development
brazilian pavilion: the one stop shop for the offshore international market
of automation engineering designs to their implementation in continuous process plants,” says Luciano Weber, Executive Director at Device. According to Mr. Weber, the company will present the assignments in which it is involved with Petrobras and its business strategy for fast, sustainable growth, highlighting the considerable potential for new partnerships.
“Our main objective at OTC is to demonstrate Device’s new positioning aimed at business excellence and the major business potential in the oil, gas and electricity sector, which represents around 90% of the company’s revenue. We want to be known for adding value, presenting the possibility of developing complete automation projects, from the planning stage through procurement, development and implementation at the client’s site,” explains Mr. Weber. Device has high hopes for the event, which the company con-
Brazilian Regulation
A long-time participant in OTC, even before the creation of the Brazil Pavilion, the National Petroleum, Natural Gas and Biofuels Agency (ANP) will be attending once more this year. The agency’s director, Haroldo Lima, says that ANP expects the event to feature in-depth discussions of the challenges of oil and gas
siders to be very strategic, not only to open up possibilities in the international market, but also as an excellent opportunity to show other Brazilian companies the efforts it is making to achieve excellence and add value. “It is also a way of demonstrating our commercial boldness,” says the executive. Mr. Weber adds that Brazil is prominent in the global energy market, and so companies active in the country have to present themselves to the world in a competitive manner. “Everyone needs to perceive Brazilian
exploration and production, regulation, environmental problems, technological challenges and sector trends. “The oil and gas sector is one of the most dynamic in the world. OTC is always a great opportunity to learn from the experience of other countries and also to show what is happening in Brazil,” says Mr. Lima. At this edition of OTC, ANP will explain the workings of the two regimes in place in Brazil: the concession system for all sedimentary basins except the pre-salt polygon; and the production-sharing arrangement for the pre-salt polygon and other areas considered to be strategic. The agency will also highlight its role in regulating, contracting and inspecting exploration and production activities under the two regimes. “The concession regime, which remains in place throughout the country except in the pre-salt area, has been a success over the last 13 years. Approximately 70 companies are currently working as concession-holders in Brazilian sedimentary basins,” explains Mr. Lima. He argues that the production-sharing regime for pre-salt will enable Brazil to develop an industrial policy to generate jobs, technology and revenue through the export of higher added-value products. In addition, Mr. Lima stresses that resources obtained from presalt production will be invested in anti-poverty programs, education, sustainable production and technology. Regarding OTC, he says it is very important for ANP and all parties involved in the oil and gas sector in Brazil to participate: “It is a unique opportunity to attract new investment and strengthen Brazil’s image as the most promising petroleum frontier in the world.” T&B Petroleum # 30
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event
From left to right: Fernanda Véga (Onip), Luciana Vasconcelos (Apex Brasil), Tatiana Campos and Adriene Kfuri (IBP).
companies as competitive and serious. Our market is the flavor of the month, and those who take advantage of this moment will be more solid in future. Device has been participating in all the trends taking place in our country and abroad in order to help strengthen domestic industry,” he concludes.
A new look Mercotubos, a Brazilian company that has been operating for over ten years in the market for oil and gas products and services and has annual revenues of around R$200 million, will have a fresh new look for this edition of OTC: the company will be presenting itself using its new brand, Maxen, which was announced to the market at the start of April. In 2010, the company implemented its expansion plan by opening a new plant in the municipality of Escada in the metropolitan region of Recife, Pernambuco. According to Luiz Fernando Rossini Pugliesi, the President of Maxen, the new brand reflects the company’s new phase. It is not only the company’s name that has changed, but also its positioning in the market. “The 60 T&B Petroleum # 30
Mercotubos brand is very associated with the distribution of pipes. This area remains very important to the company in terms of both strategy and revenue; however, we now have a much wider scope than distributing pipes. We are approaching the market through three business units, and the new name and brand were developed with this purpose in mind,” he says. Mr. Pugliesi explains that the new name is a combination of “Max” – maximum, positive, growing – and “En,” which represents energy, more specifically the oil and gas sector. He says that one of the objectives for the brand and company is to be the leading second-tier supplier in the oil, gas and energy supply chain – in other words, to directly supply Petrobras’ clients and be its main partner in the areas where it operates – due to its capacity for innovation and execution in industrial construction and production work in general and in complete and integrated supply solutions. Regarding the company’s three business units, Mr.
Pugliesi says that value is added to their work, and not merely through their integration. In other words, Maxen is more than the sum of its parts, adding value through cutting-edge technology, service customization and competitive delivery times and prices. At OTC 2011, besides presenting its new brand to the market, Maxen will take the opportunity to showcase its full range of oil and gas sector products and services. The president of Maxen explains that the company decided to participate in OTC because it is intensely engaged in the exploration and production sector, the supply of FPSO modules and the use of new technologies in Brazil, with the aim of meeting the needs of presalt operations. “OTC is a very important event for us, giving us the chance to present ourselves to the international oil and gas market and find out about new technologies that can be applied to our products and services,” he says. “OTC is a globally important trade fair in the oil and gas sector. We hope that interest in the Brazilian market continues to grow as we have seen in previous years.”
KNOWLEDGE AND INFORMATION
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www.tbpetroleum.com.br T&B Petroleum # 30
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professional profile
Eduardo Tosta
Aiming for
Monaco
Mechanical engineer with a specialization in petroleum from PUCRio and in VIV (Vortex Induced Vibration in marine and offshore structures) by the Polytechnic of Milan, Eduardo Tosta was an employee of the Petrobras Research Center (Cenpes). With more than 14 years experience in the oil and gas industry, this native of Rio is the head engineer of Subsea 7, responsible for the concept, manufacturing, and installation of submarine equipment. by Cassiano Viana
“All my 14-year professional experience has been in the oil industry. The first contact was made in the Petrobras Research Center (Cenpes) as a trainee of basic engineering”, he states. At the time, the general superintendent was Antônio Sergio Fragomeni. “Fragomeni died in 2009 at the age of 53. He had started at Petrobras in 1968 and had been the manager of the construction of the Enchova platform and general superintendent of Garoupa, besides having managed the Petrobras Office in London. He was the superintendent of Fermat and of Cenpes. Both he and the general manager Marcos Assayag, who is today the manager of the Equipment and Logistics Area of E&P of Petrobras in London, together are the two most brilliant people I have met.” At the end of his time at Cenpes, Tosta was invited to work in a private research center in São Paulo, which had among its clients a major boiler and tank manufacturer planning to enter the oil and gas market. “So there was a spin-off of our group and headed to Sorocaba”, he remembers. After one year in São Paulo, the return to Rio lead him to work directly with Petrobras and, in one of his many projects, he was sent to Italy, where he did his post-graduation in VIV. “My focus was to create innovative solutions for some of the present demands and those to come”, he remembers. “It was my goal for many years, in the technical support of a major company. It allowed me to 62 T&B Petroleum # 30
develop a wide and long look of the oil and gas market, working with the state of the art in the world. We created scenarios in order to identify the technological bottlenecks and develop solutions, even before the demand had reached the market.” These projects took him abroad in search of new technology. One of the stops was in Scotland. “I will never forget my first experience in the North Sea. It was at the end of autumn; I took off from Norway in a Russian helicopter, on the way to a ship under construction. The flight was just over gigantic waves that roared just below, which made me think: ‘and if we get any closer?’” The Norwegians seemed right at home even in the midst of that force of nature”, he recounts. However, it had always been his dream to live in Monaco, the principality in the south of France on the shore of the Mediterranean, “of course without having to work”, he jokes. For someone who has visited half the world, it is comic to think about living in a country with an area of 2,000 km² - the second smallest country in the world, after the Vatican. Due to work demands, Eduardo has for some time now been on a rotation between Rio de Janeiro and another city in Europe. “Everything depends on the development of a project and its validation. But generally in the final phase it is here in Brazil and I end up moving to another city in Brazil. Shortly, it will be Vitória”, he stated. In 2004, in need of growing professionally, he consulted yet another one of his mentors: José Formigli, who is today the executive manager of the Pre-salt Area of Petrobras, who advised him to do the petroleum specialization course at PUC. “In order to consolidate
and expand my knowledge, this course opened doors to work in submarine structures”, he states. With acquired experience in various environments and companies, Eduardo is today considered well-positioned in a promising market that is still holds challenges for those willing to meet them. For a professional that wants to make a career in the oil and gas industry, what are the major
Age: 36 Graduation: Mechanical Engineering with a specialization in Petroleum First job: Cenpes, contractor main positions occupied: manager of Technical Support and technical manager of Projects average Hours worked per day: 10 Hobbies: travel, hiking and woodworking childhood dream: live in Monaco Adulthood dream: live in Monaco without having to work Music: rock (“I’ve been listening a lot to Wolfmother”) A place to rest: my parents place in Minas Gerais, where I often do a lot of work Film: A good year Book: Solution Selling: Creating Buyers in Difficult Selling Markets, of Michael Bosworth
jobs today and in the future? “Senior professionals in other industries that wish to migrate to the oil and gas industry have to have well-established professional experience which will be associated in the industry. Junior professionals need to get a solid academic background in traditional engineering and a specialization in petroleum.” In the management area, according to Eduardo, a PMP (Project Management Professional) certification by the Project Management Institute (PMI) – a global institution geared for the management of projects, headquarter in Philadelphia, Pennsylvania, USA – will do nicely, in order to get the official and public recognition of individual abilities in the field of project management. “The industry today has a strong demand for engineers of materials, ships and drilling. Solutions are now being made for oil exploration and production at water depths of 3,000 meters and in the pre-salt”, he explains. According to Eduardo, the job of the future in the industry will be geared towards market intelligence, in the capacity of companies in foreseeing market behavior, challenges in technology, logistics and human resources. “Brazil is breaking several technological barriers and, taking into consideration this success, we are encountering more problems, challenges and surprises all the time”, he assesses. “The need to overcome the obstacles as quickly and efficiently as possible to meet the inherent technological demands will be taken into consideration with future contracting. A professional to work in this field should have a lot of experience in the company’s area of activities, able to map the traps ahead and offer solutions”. T&B Petroleum # 30
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professional profile
Photos: Stock.xcng Image Bank and Petrobras Agency
Eduardo’s free time is spent travelling: but isn’t it tiring to travel for work and pleasure? “It is completely different. Many people think that travelling for work is a kind of benefit. When I travel for work, besides the inherent tiredness of the actual travel itself (keep in mind I am more than 1.90m tall!), I work at least eight hours per day due to the travel, I make daily reports to my management regarding the advances and complications of the day. But the worst is that the work in Rio doesn’t stop while I am away. The deadlines don’t change just because I am travelling, and your colleagues continue to depend on your decisions. Thus, even when travelling, I routinely connect myself remotely and do, at least, a large part of the work that I would do when in Rio”, he explains. “When you travel for
pleasure, your mind is relaxed and occupied with nothing important. If I stay in Rio, I will work, even if at home.” From his father, an ex-navy artilleryman, he inherited his taste for woodworking: “When I stay in Rio, I have a small shop at home,” and adds “woodworking is almost a mediation. My father always was doing it, mostly sculpting brute pieces. Unfortunately, I do not have this talent, but I acquired a
taste for working with this material. I make small furniture and even an entire stand with four shelves and an L-counter, 4 meters long”, he exclaims. Cooking is another passion. He went to Tiradentes (MG) in search of a Russian cutler to buy high-quality knives – chefs are usually fanatics about knives. The Burza knives – a word that means ‘storm’ in the Cossack language – by Russian, Woldyslack Nicolayewcht Zacarowiskini, whose family has been making knives for 300 years, was indicated by a friend, ex-sous chef of Copacabana Palace. “When I arrived at his workshop, the Russian immediately asked me what my profession was. He likes to deal with specialists. For him, each knife is a knife. There are European families that buy Burza knives for more than 100 years”.
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products and services
Photo: Courtesy of OSX
OSX
Letter of intent for construction of FPSO OSX-2 OSX Leasing, a subsidiary of OSX, an EBX Group company, entered into a Letter of Intent with SBM Offshore (Single Buoy Moorings Inc Offshore), to start project activities for the engineering, procurement, construction, and installation (EPCI) of FPSO OSX-2 (Floating Production Storage and Offloading vessel), to be chartered and operated by OSX to its client OGX for 20 years in the Campos Basin, in Rio de Janeiro State. The FPSO OSX-2 will have oil production capacity of 100.000 bopd,
storage capacity of 1.300.000 bbls and total estimated CAPEX of US$ 775 million, as it shall be provided for in the relevant EPCI definitive agreement currently in negotiation between OSX and SBM. After the EPCI signature, the chartering of FPSO OSX-2 shall be contracted between OGX and OSX, providing for an average daily rate around US$ 290.000,00, with oil production start-up expected for mid of 2013.
“This initiative reaffirms OSX´s commitment to supply our clients with integrated solutions of equipment and services for the offshore oil and gas industry, contributing for the development of the production of the oil and gas that are being discovered in our country”, stated Luiz Eduardo Carneiro, OSX´s CEO. The banks ING Bank N.V. and Santander (Brasil) S.A. were mandated joint lead arrangers for the financing of up to 80% of the total CAPEX of FPSO OSX-2.
The largest crane in the Americas will be installed at OSX´s shipyard. The company belongs to EBX Group and it is focused on offshore marine industry. The crane will be 125 meters high (equivalent to a 40-floor building), will have a distance of 186 meters between the pillars (two times the length of Maracanã soccer field), and a capacity for 1,600 tons (which corresponds to the weight of 2,000 cars) and it will be implanted at the Açu Superport Industrial Complex, in São João da Barra, north of the state of Rio de Janeiro, where the company will build its shipyard. OSX signed a Letter of Intent (LOI) with Hyundai Samho, a subsidiary of Hyundai Heavy Industries - which is an OSX partner at the Shipyard - to acquire this equipment, similar to the one already installed in the offshore division of Hyundai.
Photo: Courtesy of Hyundai Shipyard
OSX will have the largest crane in the Americas
The South Korean crane will be used to construct hulls and to move loads in the shipyard’s dry dock area. The equipment will allow the assembly of large blocks or modules of FPSO vessels at once, ensuring productivity, in line with the deadlines for constructions.
OSX’s shipyard has obtained Preliminary Environmental License. After obtaining the Installation License, which is expected to happen further this semester, OSX will start the construction of the largest shipyard in the Americas.
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products and services
Keppel Fels
Keppel FELS has delivered Alpha Star, the second of two DSSTM 38 semisubmersible rigs, to Brazil’s Queiroz Galvão Óleo e Gás (QGOG) four months ahead of schedule and with zero lost time incidents. This continues Keppel FELS track record of delivering its rigs on time or ahead of schedule. It is the third early delivery this year, following the early delivery of the semisubmersible drilling tender, West Jaya, to Seadrill and of the KFELS N Class rig, Rowan Stavanger, for Rowan Companies. Mr. Tong Chong Heong, CEO of Keppel Offshore & Marine, said, “This is our second safe and early delivery to QGOG and a sterling record for our company. This outstanding achievement is a demonstration of the great teamwork and synergy we have built with QGOG. It brings to fore the excellence of our efficient processes, project management, innovative methods and the Can-Do spirit which we apply on all our projects.
Photo: Courtesy of Queiroz Galvão
Keppel Delivers Rig to Queiroz Galvão
“We are glad to be able to send Alpha Star off early to contribute to Brazil’s exploration and production efforts, enabling QGOG to anticipate its service from Petrobras. Our philosophy is to provide maximum value to our customers and we look forward to supporting QGOG as they expand their foothold in the deepwater drilling segment.” The rig has been chartered by Petrobras for six years to support exploration and production activities offshore Brazil. Mr. Leduvy Gouvea, Chef Executive Officer of Queiroz Galvão Óleo e Gás said, “With this early delivery,
we are able to start work earlier for Petrobras, and reinforce our status as the premier drilling operator in Brazil. We are confident that Alpha Star will be just as successful as its sister rig, the DSSTM 38 Gold Star, which is performing successfully for Petrobras in Brazil. “Through the various projects we have been working on, they have proven to be an exceptional partner, delivering projects which exceed expectations and enabling us to efficiently serve the fast-growing oil and gas exploration industry. They share our commitment to provide technologically advanced and high quality products to our customers in a reliable and safe manner.” Jointly developed and owned by Keppel’s Deepwater Technology Group and Marine Structure Consultants, the DSSTM 38 design is in the league of some of the world’s most advanced drilling semisubmersibles. Designed to maximize uptime with reduced emissions and discharges, a DSSTM 38 rig is well-suited to handle the operational requirements in the deepwater “Golden Triangle” region, which comprises Brazil, Africa and the Gulf of Mexico.
Technology for ethylene plant in Mexico Technip will provide technology for the cracker of the Ethylene XXI project and be responsible for the basic engineering project for this plant and for the high density polyethylene plant Braskem-Idesa, the joint venture between Braskem and the Mexican group Idesa, has taken another important step forward in the development of its Ethylene XXI project in Mexico. The JV selected Technip as the technology supplier for the ethylene cracker with annual production capacity of 1.05 million tons. The plant is part of the petrochemical complex to be built in the Coatzacoalcos region, in the Mexican state of Veracruz, with operations scheduled to begin in January 2015. The integrated complex will
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also include a low density polyethylene plant and two high density polyethylene plants. Braskem-Idesa has also selected Technip as the main manager of the basic engineering project for the cracker and high density polyethylene plant. Technip is the largest company in its sector, with recognized experience in implementing mega-crackers for ethylene production with an approach based on Engineering, Procurement and Construction (EPC). Braskem-Idesa believes that this choice will bring important benefits for the project, since, once completed, the cracker using Technip’s last-generation technology will be the most modern and efficient in operation in the Americas.
Photo: Courtesy of Braskem
Technip
Technip’s operating centers in Rome, Italy and Claremont, California will execute the activities involved in the detailed engineering project for the ethylene plant, while those related to the high density polyethylene units will be executed by Technip’s office in Lyon, France. The basic engineering project is scheduled to be completed by the end of 2011.
Petrobras/Innova
Petrobras announces acquisition of Innova Innova is located in the Petrochemical Complex of Triunfo-RS (Brazil), produces styrene, polystyrene, and ethylbenzene, raw materi-
als for synthetic rubber, acrylic and polyester resins used for disposables, paper, tires, paintings, packages, among others.
The South Petrochemical Complex at Triunfo, RS, houses three industrial units meant for producing ethyl benzene, styrene monomer, and polystyrene, totaling 220,000 m² of occupied area and 113,000 m² of area that has already been constructed.
Photo: Petrobras Agency
Petrobras announces the acquisition of 100% of the capital of Innova S.A. for US$ 332 million, from Petrobras Energía Internacional S.A. – PEISA, a wholly owned subsidiary of Petrobras Argentina SA. The acquisition allows Petrobras to invest in Innova aiming to align its assets to Petrobras’ assets and presents synergies with some projected investments such as some units for the Petrochemical Complex of Rio de Janeiro - Comperj.
Maersk
Maersk Drilling orders two drillships Maersk Drilling has signed a contract with Samsung Heavy Industries in South Korea for the construction of two ultra deepwater drillships. The drillships are scheduled for delivery in the third and fourth quarters of 2013, respectively. The total project cost for the two drillships is close to USD 1.3 billion. This includes a turnkey contract with the yard, owner furnished equipment, project management, commissioning, start-up costs and capitalized interest. The contract includes an option for the construction of two additional drillships. “We see an increasing share of the global oil and gas production coming
from deepwater, and this trend will drive a solid growth in the demand for ultra deepwater drilling services in areas such as Brazil, West Africa and the Gulf of Mexico,” says Claus V. Hemmingsen, CEO of Maersk Drilling and member of the Executive Board of the A.P. Moller – Maersk Group. “This will be the first drillships in Maersk Drilling’s ultra deepwater fleet. They will complement
our existing three deepwater semisubmersibles and they will add a new important aspect in our offering to our customers in the ultra deepwater market,” Claus V. Hemmingsen continues. The 228 meter long drill ships will be able to operate at water depths up to 12,000 ft (3,650 m) and will be capable of drilling wells of more than 40,000 ft (12,200 m). With its advanced positioning control system (Dynamic Positioning System) the ships will automatically maintain a fixed position in severe weather conditions with waves up to 11 meters and wind speeds up to 26 meters per second.
BG Group
BG Group announced it will invest up to US$30 billion in Brazil over the next decade, confirming the South American country as one of the most important locations worldwide for the London-based energy group, Chairman Sir Robert Wilson said. The investments, which will include US$1.5 billion in spending on a new global technology center through 2025, were announced by Wilson following a
meeting with Brazilian President Dilma Rousseff in Brasilia. The investments may be “a first step towards turning Brazil into a global provider of technological solutions,” BG said in a statement. The company will also invest in training in Brazil. BG has invested US$5 billion in Brazil since 1994, including in development of some of the country’s important presalt oil finds, in conjunction with Brazilian oil giant Petrobras. These are located under a layer of salt in the Atlantic Ocean seabed, where total reserves are estimated at as much as 50 billion barrels of oil.
Photo: Comgas
BG Group to invest US$30 billion in Brazil
BG Group plans to produce 550,000 barrels of oil equivalent a day in Brazil by 2020, making this one of the group’s most significant production centers. BG is also a majority shareholder in Brazil’s biggest natural gas producer, named Comgás, and a shareholder in the Brazil-Bolivia gas pipeline.
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products and services
Castrol Offshore
GreenField lubricants from Castrol Offshore are likely to remain the only products fully tested to environmentally-responsible standards set by Norwegian authorities through 2011. Changes to Norwegian Activities Regulations introduced on January 1st 2010 require discharged lubricants and chemicals, used in closed systems in amounts of more than 3000kg a year per facility, to be registered for use offshore. Applications including crane hydraulics, thrusters, drilling system hydraulics and mooring winch gears, require Harmonised Offshore Chemicals Notification Format (HOCNF) registered products. Castrol Offshore proactively registered its products before the January 1st 2010 deadline. Castrol Offshore’s environmental specialist, Susannah Linington, explains, “We believe we remain in the unique position of being able to offer products fully tested and registered with the Norwegian authorities.” Topside hydraulic fluid Castrol BioBar and thrusterspecific Castrol BioStat have both been tested and registered according to the OSPAR (the Oslo and Paris Conventions for the pro-
Photo: Courtesy of Castrol
Castrol Greenfield takes environmental lead
tection of the marine environment of the North-East Atlantic) requirements on the Norwegian NEMS database. The range is completed by Castrol Anvol CF22, formulated for BOP control systems, Castrol BioTac for jacking legs and deck machinery and Castrol BioTrans for gear boxes. All of these products are easy to retrofit. According to Ms Linington, “These products give operators the opportunity to select environmentally responsible alternatives without compromising on technical performance in comparison with conventional mineral oil products.” UK legislators recently arrived at a new definition of offshore ‘releases’, to provide the basis for enforcement against operators for unintentional chemical releases. Permit holders now have an obligation to prevent damaging incidents or to limit their environmental consequences.
Castrol raises industry awareness of environmentallyresponsible lubricants As the environmental voice grows louder, tolerance of any form of pollution from shipping diminishes and legislative demands escalate, greater attention is being paid to how the industry conducts its business. Many types of lubricants, hydraulic fluids and greases are used in shipping and offshore. These are vital to the safe and reliable operation of equipment, but their use can result in their being discharged, spilled or washed into the sea. Many of these lubricants claim to be “environmentally friendly” or “environmentally preferable” or “food grade” but,
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scientifically, this actually means nothing. When choosing a “green” lubricant, customers need to make sure that any environmental claims are backed up with relevant scientific data. Castrol decided to develop a new lubricant range called the “Bio Range” for applications throughout a vessel where leakages present a risk to the marine environment. This is a pioneering approach to take in relation to marine lubricants. As a first step the lubricant supplier assessed where discharges or leakages are likely to occur in the course of a vessel’s normal operations.
Ms Linington says the use of Castrol GreenField products would also allow operators to meet obligations under these new rules. Again, the Canadian government recently started asking offshore permit holders for information on the environmental specifications of thruster fluids. Currently, shipboard lubricants do not have to undergo the same rigorous environmental testing as those used offshore. However, for example, the final draft of the European Ecolabel for lubricants extends to lubricants in marine applications. Meanwhile, in the US, the US Environmental Protection Agency (EPA) is reviewing criteria in the Vessel General Permit for the selection of environmentally preferable lubricants for use in stern tubes and thrusters. Similar guidelines have been provided by the International Maritime Organization for ships operating in Polar waters, which state: “Sterntube bearings, seals and main propulsion components located outside the hull should not leak pollutants. Non-toxic, biodegradable lubricants are not considered to be pollutants.” Given these trends, Ms Linington says, “The shipping industry also needs to review applications that have the potential to discharge lubricants into the sea, either intentionally or by accident, as a matter of urgency. It is imperative that owners assess whether they could use products in these applications that have a reduced impact on the marine environment, based on biodegradation, bioaccumulation and toxicity whilst maintaining good lubrication performance.”
scenery
Brazilian basics Buoyed by GDP growth of over 3% every year since 2004, Brazil is currently frantically building new infrastructure to develop its vast reserves of natural resources - in particular, the so-called presalt cluster, in the Atlantic Ocean, which is part of a region that extends about 800 km along the coast of Brazil from Espirito Santo state to Santa Catarina state.
T
he cluster’s oil has been found in waters as deep as 3000 m and as much as 7000 m below the seabed beneath a layer of salt. The area comprises 112 000 km² in deep and ultra-deep water reservoirs, of which 41 000 km² have not yet been put up for tender. It is the “most significant oil discovery in the past 20 years”, according to Wood Mackenzie consultants. The conductor of the orchestra will be state-owned company Petrobras, along with a new company to be created, Petrosal, very much alike Norwegian Petoro. Knowing how to deal with these companies will be key for the success of old both incumbent and new players in the Brazilian oil and gas game. These tenders will all contain gradually increasing minimum local content requirements that can go as high as 95% in 2017. This means that interested companies should run and start looking out for local partnerships, areas to establish new facilities, operational bases, enrolment as supplier with Petrobras (CRCC), etc. In order to implement such audacious plans, Petrobras will rely on large capitalisation from shareholders, especially the controlling stakeholder, the Brazilian government. Petrobras will further count on cheap and abundant financing from government development bank BNDES, and other state-owned banks. In order to reduce prices of equipment, and at the same time allow for the gradual escalation of local content requirement in its projects, the company is breaking up large EPC, service and supply contracts into smaller packages, emphasising greater detail and standardization of orders, starting with an ambitious programme of eight FPSOs to be locally built, in a dry-dock chartered by Petrobras itself in the southern part of Brazil, in Rio Grande. In order to reduce prices, Petrobras is also planning to revise its standard contracts in order to reduce risk to the supplier. The target is to produce 3.3 million bpd of equivalent oil (boe/d) by 2013, and 4 million by 2020, along with 5100 boe/d of natural gas by 2020. Private companies are coming up with huge investments as well. Devon, Shell, Chevron and StatoilHydro will collectively invest US$ 25 billion through to 2013. In addition to this, a new law opened up concessions for gas pipelines. Among the projects already authorized for tender is the 948 km Middle North Gas Pipeline, budgeted at US$ 1.6 billion. Petrobras, in addition to the daring plans in the E&P sector, is also conducting an ambitious plan of revamping existing refineries and constructing new ones. In the gas sector, US$ 3 billion will be spent on developing infrastructure for LNG. The target is to build a liquefaction plant to come into operation in 2013 with a capacity to liquefy 10 mil-
Heller Redo Barroso is the founding partner of Heller Redo Barroso & Associates, a Brazilian Rio-based boutique law firm specialized in Oil and Gas, Power, Shipping, and the Offshore Petroleum Industry.
Marcos Macedo is an associate lawyer at Heller Redo Barroso & Associates
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Photo: Petrobras Agency
scenery
lion m³/d. Petrobras also intends to build a terminal for docking LNG tankers in order to be able to export LNG. Two LNG terminals exist today (Pecém and Guanabara), and a third one will likely be built in Rio Grande in the short-term, with a capacity for 14 million m³/d. A fourth one is also been studied. Also under study is the expansion of the LNG terminal in the Guanabara Bay, from current 14 million m³/d to 20 million. With all the projects, Petrobras estimates capacity of 166 million m³/d of natural gas in 2017. The seasonal demand for gas is characteristic of the Brazilian electrical system, based on hydroelectric plants and safeguarded by the energy generated by predominantly natural gas-fired thermoelectric plants (if we consider the ones already under construction and the future public tenders for the construction of new thermoelectric plants, which is also a niche worth exploring by foreign investors, then Brazil needs an additional 3 – 4 GW power plant installed capacity per year, considering current expected GDP growth rates for the next five years. Some 75% of this is still hydroelectric power, but thermal power tends to increase and occupy a larger share of the pie. Petrobras is the sixth larger electrical generator in the country with 5461 MW of installed capacity, and is going to invest US$ 2.4 billion in the sector for expansion through 70 T&B Petroleum # 30
2013. Installed capacity is forecast to increase from 99 747 MW to 154 797 MW by 2017, which represents an increase of 55% in the current generation capacity. In addition to Petrobras investments, a further US$ 80 billion will be invested in the electrical sector through 2017 - US$ 63 billion for generation and US$ 39.1 billion for transmission. Wind power is also a promising sector in the Brazilian marketplace. This year, the first tender exclusively focused on wind power projects will be carried out. So far 1.2 GW worth of projects to be put up for tender have been registered with the relevant regulatory agency, ANEEL. On top of all this, new ports and shipyards are already under construction. It is likely that every major shipyard in the world will have a significant presence in Brazil (in association with local major contractors) in the next couple of years. In addition, ANP has not since 2007 held tender for new offshore exploration areas. The industry is pressing government to conduct tenders of outside-pre-salt areas urgently, for it cannot be in such a standstill for so long. The government froze all tenders until the new regulatory framework for pre-salt is introduced. This includes production sharing agreements for new areas and maintaining the concession regime for the areas already tendered, some as long ago as 2000.
brazilian basics
The model is very much like the Russian model, only that the PSC is mandatory for the new areas, and not discretionary. One can thus expect new tender for promising areas outside the pre-salt areas. Tenders for the pre-salt areas may take a while to come up, since a government-proposed specific regulatory framework for the pre-salt cluster has just been passed on to Congress in the form of four different bills. In the pre-salt area, the Brazilian government has already made it clear that the national content requirements in E&P will escalate to around 85 - 95%. This means that whoever wishes to have a piece of the pre-salt pie will have to establish significant local presence, in particular equipment suppliers (topsides, pipes, risers, umbilicals, drilling packages, power packages for offshore units, etc.), who will likely need to build production facilities in Brazil. Newcomers to Brazil’s oil and gas marketplace are usually dismayed by what seems like an overly complex, heavily regulated and bureaucracy-prone legal system. Companies worry about corruption, and about securing their assets against unlawful seizure or nationalisation. These are somewhat far-fetched concerns in today’s Brazil, but understandable ones if we look at the country’s not-sodistant past, and at the Latin American neighbourhood. The hard facts are: • Brazil boasts a booming economy barely shackled by the worldwide financial meltdown. • Brazil is an investment-grade country. • Brazil blossoms among the BRICs. • Brazil is clearly poised to become the huge next safe hub for the world’s smart money.
Offshore industry transformation To capitalise on the long-term opportunities Brazil’s vast offshore treasure chest offers, Petrobras, the statecontrolled oil giant, will itself be investing a whopping US$ 174 billion through to 2013. A total of 23 development and production projects are forecast to be up and running by then. By 2020, the company may well have invested US$ 111 billion in the pre-salt reservoirs alone. As reported, Petrobras is about to embark on a spending spree from a gigantic shopping list that includes 550 generators, 550 derricks, 350 turbines, 700,000 t of structural steel for platform hulls, 550 wet Christmas trees, 500 wellheads, 80 000 pumps, 18 000 storage tanks, and 4000 km of flexible lines and it doesn’t stop there. It goes on for 55 000 more items, of which drilling packages and FPSO packages, subsea equipment and compressors are considered to be the most critical. And there will be contracts for rigs and platforms that will be chartered under service agreements: 24 drilling rigs for 10 000 – 14 000 ft, mostly drillships and some semi-submersibles, 200 support vessels (especially pipelayers, AHTSs, PSVs, tug and tow boats, and line handlers),
18 FPSOs, and so on, and so on. The company will also renovate its oil tanker fleet, with 26 ships already contracted and another 23 up for bidding later. Needless to say, Brazil will become a gold mine for suppliers and service providers in the worldwide offshore petroleum industry. But there is one catch. These vendors will likely be required to meet an ever-growing “local content” percentage established by Petrobras (which may end up controlling over 90% of the exploratory blocks). And Petrobras will have targets to reach with Brazil’s National Agency for Oil, Gas, and Biofuels (ANP) regarding national content and will most assuredly pass on these requirements to its supply chain.
‘Dutch disease’ and local content policy The discovery of massive oil reservoirs can be both a blessing and a curse to a country. These windfalls can cause the so-called ‘Dutch disease’ - experienced 50 years ago by the country of Holland, when big petroleum finds triggered massive cash inflows and currency exchange escalation. As the country’s economy became more dependent on hydrocarbons, the redirection of funds and inflationary forces seriously disrupted other sectors. This shift toward exporting natural resources and away from industrialised products is just the opposite of what has characterised developed countries. It was not exactly what the Dutch had bargained for. To avoid the Dutch disease, the latest thinking from the Brazilian Government is to seek to channel outside pre-salt funds into building up the country’s industrialized infrastructure - specifically sectors vital for exploiting the submerged black gold over the long haul. While pushing for the gradual escalation of local content requirement in its projects, Petrobras is also seeking to shave prices by breaking up large EPC, service, and supply contracts into smaller packages, emphasizing greater detail and standardisation of orders. This will kick off with the eight FPSOs to be in Rio Grande. As another aid in reducing prices, Petrobras is also planning to revise its standard contracts in ways that will reduce risks to suppliers. Regardless of the particulars, and in view of the petroleum self-sufficiency the country has recently achieved, Brazil wants to play the game of selling globally but spending its cost of sales at home.
History of the local content concept Basically, “local content” consists of contractual commitments embedded in concession contracts (oil licences, or oil lease licences in some jurisdictions), whereby the concessionaires are required to procure a minimum percentage of equipment and services from local suppliers. By upping such demands throughout the country’s exploration and production projects, Brazil aims at fostering the development of a strong T&B Petroleum # 30
71
Photo: Petrobras Agency
scenery
local offshore petroleum industry supply chain. Naturally any obligation imposed on the concessionaires (licence holders) will subsequently be mirrored in contracts down the line with their suppliers and contractors. However, in practical terms, the concessionaires (remembering that Petrobras is likely to have a hand in 90% of all concessions) will require varying levels of local content from its suppliers and contractors based on the specific type of activity. Technologyintensive products and services will carry a lower local content percentage rather than low-tech activities. This is obviously because Brazil still lacks an installed capacity for high-tech work in the offshore industry. Under Brazil’s current regulatory framework, local content commitment is one of the judgment criteria applied in evaluating bidders’ offers, together with the Minimum Exploratory Program and the Signature Bonus. In presenting their offers, bidders indicate a specific percentage of local content, which is turned into a number of points used to rank bidders’ offers along with other parameters. Historically, during bidding rounds one to four for oil concessions, there were no minimum requirements for local content commitment. The local content percentage had a cap and counted only for minor effects. Companies offered their local content commitment for both the exploration phase and the development stage, limited to the cap provided in the bidding. In rounds five and six, minimum commitment percentages were introduced. These varied depending on the blocks’ locations (onshore, shallow water, and deepwater). In these rounds, local content gained more weight in evaluating bidders’ of72 T&B Petroleum # 30
fers and percentages were pumped up from the earlier 15 - 40%. In ensuing rounds, up to the ninth and last offshore bid round (the tenth round auctioned only onshore blocks), the bidding indicated both minimum and maximum percentages of local content. Shallow water blocks were split into two types (shallow water up to 100 m, and shallow water from 100 m up to 400 m). In these auctions, the weight of local content was reduced to 20% of bids’ final point evaluations.
Evolution of local content policy Surprisingly, local content policy is not expressly established in Brazil’s current Petroleum Law (Law 9.478/97). The development of local industry is mentioned (and briefly at that) only in the section of the law on the national energy policy’s main principles. In the first few bidding rounds conducted by ANP, local content commitment was mainly regulated by concession contract provisions. Later, ANP established (in Ordinance 180/2003) specific rules regarding the reporting and monitoring of local content. In bidding round seven, ANP introduced major changes in concession contract provisions and created a guide book for concessionaires to use in monitoring the fulfillment of local content commitments. The impetus was PROMINP (Programa de Mobilização da Indústria Nacional de Petróleo e Gás Natural - Mobilisation Program for the Oil and Gas National Industry), introduced in 2003 and first applied to the licenses in the seventh bidding round. Since its inception, PROMINP has significantly raised the participation of local industry in investments in Brazil’s oil and gas sector from 57% in 2003 to 75%
brazilian basics
in the first half of 2009. This represents additional value of US$ 14.2 billion for goods and services purchased in the Brazilian marketplace. Estimates indicate that 640 000 new jobs were created in this period. To sum up, commitment to PROMINP significantly increased local participation from US$ 35 billion in the years 2003/2007 to US$ 190 billion expected for the years 2009/2013. With this new scenario, Petrobras and other oil and gas players operating in Brazil will demand locally-produced goods and services in increasingly larger amounts. This offers a great opportunity for local companies (even those with foreign ownership) to supply locally (in the most efficient manner) materials, equipment, components, and services in a shorter period of time while still meeting the industry high quality standards. Of course, they must be prepared to move quickly to become enrolled on the CRCC vendors list with Petrobras. As far as regulation goes, ANP crafted a local content certification system to be applied in concession agreements between ANP and the concessionaires. This complies with contractual requirements established since Round seven. This regulation already constitutes a set of four administrative acts. The “Local Content Certificate” is a document issued by a ‘certifier’ that is pre-registered with ANP. Currently, the most important certifier is ONIP, which is also the one appointed by Petrobras in almost all their contracts. ONIP has 2000 companies registered as members, all of them participating in the supply chain for the offshore petroleum industry. The certification is conducted according to a template made available by ANP. It states the percentage of local content of the particular good or service hired for measurement. Activities are carried out by an entity duly accredited by the ANP (regardless of commercial relationship) to publicly certify, through issuance of a certificate, that a given good or service is in compliance with the requirements established in the Regulations of Local Content Certification. According to Administrative Act ANP no. 36, the agreement executed between the certifier and contracting party will necessarily contain: • Clear definition of the product, product for temporal use (goods used in rental agreements, charter party, tenancy, or operational or financial leasing, etc.), service, subsystem, system, or set of systems to be certified. • The schedule for the certification activities. • A contract clause stipulating that all activities will be carried out according to present regulations. • Identification of certifier personnel involved in the execution of activities. • Identification of contracting party personnel responsible for conducting the activities. • Definition of access, examination, and analysis of:
- The documentation to be analysed. - The productive processes necessary for the preparation of the product to be certified. - The constituent components of the product to be certified. - The outsourced and/or subcontracted components and relevant documentation. - The imported components and relevant documentation. • Prices and commercial conditions of the certification agreement. • The agreement identification code. Definitions, methods, and criteria for calculation of local content of goods, goods for temporal use, services, subsystems, systems and set of systems related to oil and natural gas exploration and production activities are those contained in the local content primer according to Annex III of Administrative Act ANP 36. English translations of all these Administrative Acts relating to PROMINP and national content can be downloaded from the Heller Redo Barosso web page (www.hrblaw.com.br). For example, the local content percentage (CLb) for goods is applicable to equipment and materials and is calculated using the following formula: CLb = (1 - x/y) x 100 where: ‘X’ stands for the price of imported components (in R$), including raw material. ‘Y’ stands for the sale price of product in practice, excluding IPI and ICMS. In parallel, the Brazilian Government created the Fund to Ensure Shipbuilding (‘FGCN’) to mitigate the risks of completion, performance and credit connected with the construction of new yards and manufacturing facilities in the oil supply chain. FGCN will mainly support the credit risks of financing the construction of drilling rigs. Petrobras will also negotiate with local banks a Special Programme of Credit with certain conditions to fund development of the local offshore petroleum industry supply chain.
The CRCC The plan for CRCC is to build a database of prequalified service providers and suppliers organised according to their products or services, so as to expedite Petrobras’s purchasing process. As Petrobras needs such products or services, bidding or negotiation will be simpler and faster, largely based on price and delivery capabilities. This will dispense with the current extensive examination of products on a case-by-case basis, which is obviously time consuming and counter productive for Petrobras. Furthermore, Petrobras can decide to invite companies to participate in biddings or direct purchase negotiations on the basis of information contained in the CRCC database. CRCC has existed for a long time but was largely dispensed with in international purchases T&B Petroleum # 30
73
Photo: Keppel Fels
scenery
and in most deals with the majors. However, in a few months, it is likely that companies without CRCC registration will be prevented from selling or providing services to Petrobras. Moreover, there is a noticeable trend in making CRCC enrollment a requirement for qualification of companies for biddings. This is being especially pressured by the Petrobras Engineering Division. CRCC may also be used as an instrument to control domestic content requirement. For example, the companies registered will also be prequalified considering their “local content”. CRCC may then be updated from time to time as companies become more and more “Brazilian”, or “tropicalised”.
Achievements of the Local Content Policy to date In the early concession bidding rounds, the local content commitment was very soft - e.g. in BM-ES-1, the local content commitment was 5% in the exploration phase and 15% in the development stage. However, in the latest rounds we have noticed a major push in the offered percentages, some reaching as high as 80%. In view of this more aggressive scenario, oil companies – most notably Petrobras - have started to contract with local suppliers as part of huge projects. Two such examples are the R$ 2.5 billion semisubmersibles P-51 and P-52, with a capacity of 180 000 bpd, to be built by Keppel and Technip with local content requirements of 65% and 55% respectively. Other recent projects with sizable local content include part of the construction of FPSO P-54; modernisation of FPSO P-34, and construction of the topsides of FPSO P-63. In addition to these major capitalconsuming projects, we could also cite numerous other engineering projects involving the construction and installation of subsea systems, support vessels, 74 T&B Petroleum # 30
and offshore cranes as examples of increasing local content.
Likely changes in Local Content commitment A very sensitive point in the currently proposed regulatory changes for oil concessions is the direct hand of the government in managing E&P projects. According to the wording incorporated in the new proposed framework for hydrocarbon exploration in the pre-salt area, a new 100% government-owned company (named ‘Petro-Sal’) would essentially mastermind all E&P projects in the pre-salt region. For every concession, it would have the right to name half of the operating committee members, including the chairman, who would have a tie-breaking vote and veto powers. Accordingly, the new public company would have control over any decision of the operating committees, including the contracting of services and goods. This would enable its representatives to require higher scale of local content, or even bestow om them the power to decide on contracting certain local suppliers. Furthermore, the new regulatory framework has introduced the concept of “sole operator”: it sets forth that Petrobras will operate all pre-salt areas. Since Petrobras is essentially controlled by the government, government officials will therefore pull the strings at Petrobras so as to make it the chief enforcer for implementing national local content policy (e.g. by making Petrobras’s vendor’s list - CRCC enrollment a requirement in future biddings and contracts).
First come, first served In light of recent government statements, local content requirements will undoubtedly climb, thereby forcing interested international suppliers to set up and
run Brazilian subsidiaries in order to participate in the massive oil revenues that will begin to flow from the pre-salt region. As previously mentioned, in the pre-salt area, the Brazilian government has already signaled national content requirements of 85 - 95% for some items by the year 2020. This means that players wanting to have a piece of the presalt pie will have to pull together significant local presence. In particular, equipment suppliers will likely need to build production facilities in Brazil. There will be no getting around it. The new policies will affect, without limitation, activities such as the purchase and sale, construction, conversion, upgrade and chartering (bareboat, time and voyage charters) of ships and offshore units. This would include a lengthy list of vessels such as jack-ups, spars, TLPs, pipe-layers, ROVs, floatels, semi-submersibles, drillships, FPSOs, FSOs, as well as support vessels (PSVs, line handlers, AHTs), seismic vessels, and coastal-trade and long-haul bulk-carriers, chemical and oil-tankers, and LNG vessels (including FSRVs and SRVs). Equipment supply will probably be the hardest hit: drilling packages, topsides and the subsea systems, and equipment ‘by the piece’ such as offshore cranes, manifolds, turrets, derricks, cantilevers, umbilicals, risers, wet x-mas trees, thrusters, power modules, compression modules and hydraulic pumps. Consequently, some major international offshore contractors and suppliers are already jump starting their competitive position by establishing operational and manufacturing facilities in Brazil. This is the only way these companies will be able to have contracts with Petrobras or Petrobras contractors in the near future. Even prior direct association with local Brazilian companies will become insufficient in the very near future, as the lack of local content from a foreign supplier or contractor could jeopardize a project even if the company is an established subcontractor to a contractor of Petrobras. The CRCC and the new procurement department at Petrobras’s Engineering Division will certainly be two very powerful forces for realising the ambitious domestic content targets within the very short time-frame set out by the Brazilian government. Due to the lack of local installed capacity of the major international players in the offshore petroleum industry, bidding and direct negotiation invitations are currently going mostly to Brazilian contractors, who in turn will procure technological partners, operators, financial partners, and project managers from abroad Most of these Brazilian contractors are unfamiliar with the finer details of the offshore petroleum industry and somewhat ‘illiterate’ in the high-tech end of it. So they are quite dependent on associations with international companies. This is a huge opportunity for international suppliers and contractors to begin opening the door into Brazil: start with associations. But players should always bear in mind, as mentioned before, that
Illustration: FMC Technologies
brazilian basics
associations should only be a first a step toward future independent standing achieved through the construction of local presence and infrastructure. For those companies that do not know, a company is deemed to be a ‘Brazilian company’ for local content purposes if it is incorporated in Brazil. For the purposes of quantifying local content, certifiers will certainly check on how many Brazilian employees the company has, what are its local assets, and what is the percentage of imported items. Although this somewhat oversimplifies the process, the message is clear. By becoming established in Brazil, foreign companies may be directly invited to participate in auctions where high national content is required, therefore allowing it to compete with ‘native’ Brazilian contractors. But the early birds are already chasing the worms. New ports and shipyards are currently under construction. Every major global shipyard is already involved in Brazil, negotiating the construction of their own yards here, all of them in association with the biggest Brazilian conglomerates. All the Korean yards are here, for example. Despite these challenges, the Brazilian pre-salt region, also nicknamed as the ‘blue rump steak’ due to its shape, still represents one of the best business opportunities for E&P services and goods providers throughout the world. Companies ready to come and establish local manufacturing capacity in Brazil and forge strategic associations will be well-positioned for a head start in the run for black gold. T&B Petroleum # 30
75
production
Peak Oil.
Does it Matter? Peak Oil, the point in time at which the maximum rate of global petroleum extraction is reached, is a source of concern for some and celebration for others. At face value, this definition appears simple. But it becomes fairly complex when all of the angles are considered.
F
Dato’ Rob Fisher, is a Senior Advisor to Bain’s Global Oil & Gas Practice. Prior to that, Rob spent 32 years with ExxonMobil Corporation in a variety of executive positions in their exploration & production, gas and downstream businesses in the US, UK, Saudi Arabia and Malaysia. Dato’ Rob was Chairman and CEO of the ExxonMobil Subsidiaries in Malaysia from 2003 to 2006.
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or example, are we talking about oil alone or oil and gas? Do we count both conventional and unconventional production? Do we include coal bed methane, shale oil and tar sands? Despite this complexity, I believe that these questions are relatively unimportant, because the event they are addressing is of much less significance than the focus on it would imply. We often hear the phrase “the days of easy oil are over.” But they never really occurred. Easy oil is only easy in the rear-view mirror. Shallow water production in the North Sea today appears easy in comparison to, say, that from deep water offshore West Africa or tar sands extraction in western Canada. But try telling that to the Project Managers for the first generation of gravity-based structures placed in the North Sea in the 1970s. Project cost overruns of several fold and multi-year delays were the standard – even for this “easy” oil. The most difficult oil and gas produced today will, twenty or thirty years from now, be dismissed as easy by our children. The point here is that even if we have passed the point of Peak Oil already, those implying that the petroleum industry is dead or dying are guilty of great exaggeration. I will show that Peak Oil is not an urgent concern. In fact, it is not a concern at all. First, at today’s consumption rates, we have approximately 120 years of recoverable reserves. That breaks down to 40 years of conventional reserves and an additional 80 years of “unconventional” reserves. Reserves have remained approximately constant since the mid – 1980s, if we define reserves as years remaining if consumption remains constant at current rates. Oil consumption has increased over this period by over 30 percent. So, not only have 25 years of consumed reserves been replaced, but the remaining reserve base has grown by this same 30 percent. Almost all of this increase has not been from easy oil, but - from a mid – 1980s perspective - from the category of “difficult” or maybe “impossible” oil. We continue to increase reserves through new discoveries, new extractions from discovered resources, field optimizations and unconventional resources. All this is despite the continued geopolitical events that have restricted access to many of the world’s most prospective regions.
Photo: Keystone Image Bank
It defies logic and experience to maintain that this trend will suddenly end. Second, we know that the consumption of oil is driven by two primary factors: the global demand for energy and the price of petroleum relative to energy alternatives. Again, it sounds simple. Unfortunately, these primary factors are driven by a multitude of variables that are vitally important and difficult to predict. For example, global energy demand is the result of population growth and the rate of economic development, region by region and country by country. Relative price is driven by the complex interactions between technology development, economic subsidies and handicapping of other energy sources. So, although we know what the drivers are, predicting how they will develop is an impossible task, as evidenced by the many erroneous historical predictions of petroleum demand and price. What we can predict is that economic growth will be most effectively driven by a reliable supply of energy provided at the lowest cost. It is more useful to identify the trends that will continue, regardless of the rate at which new petroleum reserves are added to the world’s base, and how the global energy demand and energy source price relativities will evolve. In my view, these are the three most important trends. First, new technologies must continue to emerge and existing ones to mature. That will make production of ever more difficult petroleum reserves possible and increasingly economic, and will reduce the cost of competing energy sources. Climate and other environmental concerns will focus technology development resources onto alternatives to fossil fuels. Nuclear technology, including enhancements to current waste disposal methods, will evolve to facilitate growth of this industry. Improved battery technology will eventually provide a more userfriendly transportation alternative to gasoline power. Wind and water power will have their place too, although their pace of growth will more likely be driven by the degree of financial subsidy than the free market. These technological developments will be facilitated by scientists and engineers. Globally, we need more and better- educated human resources in these areas. Nationally, economic development will be driven by people in these disciplines. Commercially, the companies that will succeed will be those recruiting, developing, funding and directing qualified personnel in research and technology implementation. Second, given the complex factors involved in energy supply evolution, flexibility is necessary. Governments should not reject or constrain any potential
source of energy, as all will likely be required at some point. Economic advantages between sources will oscillate, and attempts to pick winners and losers will inevitably lead to negative economic outcomes, with national development correspondingly impacted. Those governments that encompass market solutions to energy supply will ensure that their nations are best positioned to develop relative to others. They must also pay appropriate attention to scientifically and economically justified environmental impacts, maintain stable commercial and fiscal environments in the energy sector, and prioritize the education of young people in the disciplines required to address energy issues. Third, and, finally, the petroleum industry will face competition from alternative and potentially subsidized energy sources. Our job remains to continue to invest in technology and the people who can develop that technology. The task is not just to find and produce petroleum more effectively. As alternatives develop, the industry must ensure that every petroleum molecule adds the maximum economic value. The last barrel of oil produced is unlikely to be used to fuel electricity generation, or even to enable consumers to drive down to the local supermarket. Maybe it will fly our great, great, great grandchildren on vacation, or produce the plastic that will ensure that our great grandchildren have more active and productive senior years. Somehow, I suspect that it will be used in a way that none of us can yet imagine. Peak Oil will occur one day. It may already have done so. But we should not be distracted by it. When it does occur, this event will not signal the demise of petroleum as a growth enabler. With sufficient investment in technology and people the industry can look forward to continuing to fuel global economic development for many years, and, indeed, decades to come. T&B Petroleum # 30
77
pipes
Technology increases the offer of
national pipe for the oil and gas industry
Reflecting a worldwide trend, the use of ERW steel pipes is growing in Brazil in the oil and gas industry with application in exploration, production and transportation.
T
Wilson Rosa Cordeiro is the Vice President of Apolo Tubulars. A mechanical engineer by background, with a specialist diploma in metallurgy and economics, he has more than 40 years of experience in the manufacture of steel and welded tubes.
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he ERW (Electric Resistance Welding) pipes manufactured through the process known as (HFIW) High Frequency Induction Welding, are being increasingly used in a variety of contexts in the oil and gas industry, including pipelines, exploration and production. Their use extends into deep waters, where a wide range of temperatures and pressures exist, and they are also being utilized in highly corrosive environments. Gradually they are substituting pipe that is manufactured using other processes. The pipes are the result of major advances in the quality of hotrolled steel and new pipe-welding technology, such as the HFIW. Those technologies, when combined with a rigidly controlled system of continuous production, allow the delivery of a product that is highly competitive in terms of operating costs and quality ---- quality that matches or surpasses pipes manufactured by other processes, in particular regarding resistance to collapse or rupture, as well as susceptibility to corrosion. Pipes manufactured using the continuous ERW/HIFW process are recognized as being more efficient. They also allow for lower-cost applications than pipes manufactured using other processes. Petrobras is employing them widely. According to the latest Preston Pipe & Tube Report (Vol. 29, No. 01 – January 2011), in 2009, welded pipes made up 30.6 percent of the pipe market for casings and production in the U.S.A. and Canada, as compared with 69.4 percent for laminated pipes using the conventional extrusion process. By 2010, those numbers had changed to 48.3 percent welded pipes versus 51.7 percent laminated pipes using the conventional extrusion process. The shift highlights the strong performance of pipes that are produced using the ERW process in the highly competitive North American oil and gas market. In the line pipe sector, the performance of welded pipes has been even more expressive, achieving a market share of more than 90 percent in the competition against pipes manufactured using the extrusion process. That market domination is partially due to low ovalization and the ability to offer pipes of greater length, thus reducing significantly the
Photos: Courtesy of Apolo Tubulars
number of circumferential welds and increasing the speed of pipeline construction in the field. ERW/HFW pipes represent excellent dimensional stability, uniform wall thickness (concentricity) and low ovalization, characteristics that are particularly important in helping to determine resistance to collapse and helping guarantee an installation’s structural integrity, particularly in deep water applications as in the case of the pre-salt wells. When it comes to susceptibility to corrosion, some technicians still express concern when comparing welded pipes to pipes that have been produced using the extrusion method. This perception may be due to the older manufacturing process used when the welding was done with more rudimentary, less efficient techniques. Thanks to the advances offered by electric resistance welding, notably with the introduction of the HIFW method, today, pipes are available in the marketplace with characteristics that are similar to pipes produced using the conventional method. More recently, the industry has perfected the manufacturing process, introducing an advanced treatment of the zone thermally affected by the welding. This results in a uniquely characteristic pipe, considered premium, with a high resistance to corrosion. In fact, the resistance at that heated affected zone of the pipe is as high as the base metal. This gives the final product homogeneous metallurgical characteristics along the entire length of pipe wall, just like pipes that are produced by the conventional process. In accordance with current market demands, the ERW pipes that are considered special or premium are submitted to corrosion tests that meet the norms established by NACE (National Association of Corrosion Engineers), such as: Corrosion under tension in an atmosphere with H2S (NACE TM0177-2005; “Laboratory Testing of Metals for
Resistance to Sulfide Stress Cracking and Stress Corrosion Cracking in H2S Environments”; Fragilization by hydrogen (NACE TM284-2003; “Evaluation of Pipeline and Pressure Vessel Steels for Resistance to Hydrogen-Induced Cracking”. These and other tests showed the ERW pipes to have performance results equal to those of other types of pipe. In order to guarantee a special or premium product, modern manufacturing standards for ERW/HFIW pipes must include non-destructive tests throughout the production process to detect possible defects and guarantee a perfect product. For applications requiring high mechanical resistance, ERW/HFIW special or premium pipes are submitted to sophisticated heat treatment that normalizes material and help to create a high degree of uniformity in terms of microstructure, as well as physical and chemical properties. ERW/HFIW pipes are manufactured in Brazil and the country’s oil and gas industry has been recognizing their quality and value, in the same way as occurred in the North American market. T&B Petroleum # 30
79
coffee break
Relics of the
MNBA
An old treasure newly on display
When looking at the role of the Museu Nacional de Belas Artes (MNBA) in the cultural life of the city of Rio de Janeiro – and in the entire nation – it is clear that the museum has become a hallmark of some of the most important by Orlando Santos cultural events over the years.
Photo: Jaime Accioli
D
Museu Nacional de Belas Artes Avenida Rio Branco, 199 – Centro Telephone: 2219-8474, Tuesday to Friday from 10am to 6pm; Saturday, Sunday and holidays from 12pm to 5pm Entrance: R$ 5,00 (free on Sundays) www.mnba.gov.br
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espite the problems that have always been aroused by the constant remodeling of the building, which had never been meant to be a museum – not to mention the recent three-year closure of its most famous gallery with the nation’s most important collection of 19th Century art. The gallery is once again open to the public, after the careful restoration of this extremely delicate national treasure. Thus the MNBA has begun yet another year, proving its vitality and tenacity to meet the challenges for the benefit of the public to once again behold these true relics. The management of the museum has pointed out the importance of this major event – the re-opening of the famous gallery – as seen by the fact that nothing less than the most significant artists and works produced during 19th Century Brazil are concentrated in one single gallery – the oldest of its kind in Rio de Janeiro, since, at the beginning of the 20th Century, a selection from the showroom of the Escola Nacional de Belas Artes later became part of the Museu Nacional de Belas Artes. Within the immense Brazilian Art Galler y – the largest in Brazil, with 2,000m² and 8 meter walls – there are 230 works o n d i s p l a y, w h i c h a r e 1 0 0 m o r e t h a n b e f o r e t h e r e n o v a t i o n . The collection includes painting, sculpture, art on paper and furniture – all
Photo: César Barreto Photo: Divulgação MNBA
Photo: Divulgation MNBA
2
3
1
Outlining a tour of the exhibition, the curator, Pedro Xexéo, states: Photo: Divulgação MNBA
of which has been restored for the exhibition. The space has been remodeled according to new concepts in art criticism and expo-graphics and will reflect a new concept in museums. The research behind the renovation of the space sought to highlight the original standards of the painting, as well as the recuperation of windows and doorknobs. Among the works of art that can be found in the museum are the Battle of Avaí (1) by Pedro Américo (measuring 66 m², from 1872/1877); Battle of the Guararapes (50 m², 1879) and the First Mass of Brazil (3), (270 cm x 357 cm, 1860), both by Vitor Meireles. Besides these works of art, the exhibition includes Bad News by Rodolfo Amoedo (1895); Descanso da modelo by Almeida Junior (1882), Gioventu (2) by Eliseu Visconti (1898). Sculptures include Christ and the adulteress (4) by Rodolfo Bernadelli (1888); The Paraíba do Sul River by Almeida Reis (1886); and Allegory of the
such as the watercolors of Rodolfo Amoedo e de Henrique Bernardelli. According to the curator, Pedro Xexéo, for some time now, there has been a conceptual revision of international art historiography, and therefore, the so-called “academic” art produced in the 19th Century has been reviewed and some artists rediscovered. Therefore, some names present in the Brazilian Art Gallery of the 19th Century hold an honorable mention with regard to technical and artistic ability, contributing to the refinement of art during that period, and leading into the introduction of Brazilian modernity. The renovation of the 19th Century Brazilian Art Gallery of the Museu Nacional de Belas Artes was sponsored by financial support from institutions and organizations such as Petrobras, BNDES, Banco Itaú, Caixa Econômica Federal and the Ministry of Tourism, as well as resources directly from the Ministry of Culture.
“(...)the gallery tries to delineate as closely as possible the evolution of art
4
Brazilian Empire by Chaves Pinheiro (1872), as well as other works by Belmiro de Almeida, Debret (while in Brazil), Agostinho da Mota, Taunay, Araújo Porto Alegre, Zeferino da Costa, Castagneto, Antonio Parreira, Henrique Bernadelli, Facchinetti, and Estevão Silva, among dozens of other artists. Some highlights from the exhibition include: the canvass of São Pedro de Alcântara (artist unknown) to be viewed for the first time, and the painting of Almeida Junior, The Remorse of Judas, returning to the walls of the gallery after 60 years. Finally, there is a new gallery for artwork on paper,
produced during the 19th Century in Brazil. Revealing a vast panorama that narrates, little by little, its most significant chapters, between the second decade of the 19th Century and the first years of the 20th Century. The sculptures and paintings not only illustrate the traditional styles, neo-classicism, Brazilian romanticism and some of its variants, such as realism, the outline of symbolist art and exemplary array of impressionism, as well as genres typical of the art of the 1800s: inspired by historic events, portraiture, genre scenery, still life, landscape, and even the realism outdoors, born outside the academies.” T&B Petroleum # 30
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meeting
May
2 to 5 – USA OTC 2011 Local: Houston, TX Phone: +1.972.952.9494 Fax: +1.972.952.9435 registration@spe.org www.otcnet.org/2011/ 5 to 7 – India POWER-GEN India & Central Asia 2011 Local: New Delhi Phone: +44 1992 656 610 exhibitpgica@pennwell.com www.power-enindia.com 10 to 12 – Egypt Intergas VI Local: Cairo Phone: + 202 2405 1919 mohamed@eif-eg.com www.intergasegypt.com 10 to 13 – Brazil 11ª Coteq Local: Porto de Galinhas, PE Phone: +55 11 5586-3197 coteq@abendi.org.br www.abendi.org.br 16 to 17 – Brazil VI Congresso Rio Automação Local: Rio de Janeiro, RJ Phone: +55 21 2112-9079 Fax: +55 21 2220-1596 eventos@ibp.org.br • www.ibp.org.br 17 to 19 – Uzbekistan 15th OGU 2011 Local: Tashkent, Uzbekistan Phone: 0044 207 596 5144 Fax: 0044 207 596 5144 enquiry@ite-exhibitions.com www.oguzbekistan.com/2011 21 to 25 – Algeria 5th Algeria Energy Week 2011 Local: Oran Phone: +44 20 7596-5173 rukhsara.liberman@ite-exhibitions.com www.sea5-algeria.com 23 to 26 – USA LNG Americas 2011 Local: San Antonio, TX Phone: +44 20 7978 0061 lng@thecwcgroup.com lngamericas.cwclng.com
Junho
01 to 03 – Malaysia Oil and Gas Asia Conference Local: Kuala Lumpur, Malaysia Phone +44 (0)20 7840 2139 Fax +44 (0)20 7840 2119 oga@oesallworld.com www.oilandgas-asia.com/ 7 to 9 – Canada Gas & Oil Expo & Conference North America Local: Calgary, Alberta Phone: +1 (403) 209-3555 Fax: +1 (403) 245-8649 ryanmurray@dmgevents.com www.gasandoilexpo.com 7 to 9 – Nigeria Nigeria Oil & Gas Technology 2011 Local: Victoria Island Phone: +44 20 7978 0000 CWCConferences@thecwcgroup.com www.cwcnogtech.com 7 to 9 – Germany NGV 2011 Local: Berlim Phone: +54-11-4300-6137 info@ngv2011berlin.com www.ngv2011berlin.com 7 to 10 – Azerbaijan Caspian International Oil & Gas Exhibition & Conference 2011 Local: Baku Phone: 0044 207 596 5091 Fax: 0044 207 596 5008 me.coombes@ite-exhibitions.com www.caspianoil-gas.com/2010/ index.html 14 to 17 – Brazil Brazil Offshore 2011 Local: Macaé, RJ Phone: 55 11 3060-4868 Fax: 55 11 3060-4953 contato@Braziloffshore.com www.Braziloffshore.com/ 21 to 24 – Russia 11th MIOGE 2011 Local: Moscou Phone: 0044 207 596 5135 Fax: 0044 207 596 5135 trubetskaya@ite-expo.ru www.russianpetroleumcongress.com/2010/
Send your release to: tnpetroleo@tnpetroleo.com.br.
82 T&B Petroleum # 30
22 to 23 – Canada Atlantic Canada Petroleum Show Local: Newfoundland Phone: +1 (403) 209-3555 Fax: +1 (403) 245-8649 bettyshea@dmgevents.com www.atlanticcanadapetroleumshow.com
August
15 to 18 – Brazil International Congress of the Brazilian Geophysical Society Local: Rio de Janeiro, RJ Phone: 918 497 5500 Fax: 918 497 5557 eventos@sbgf.org.br sys2.sbgf.org.br/congresso/ 22 to 24 – China CIPPE 2011 - Shanghai Local: Shanghai Phone: +86-10-58236588 58236548 Fax: +86-10-58236567 http://sh.cippe.com.cn/cippeen/ cippe@zhenweiexpo.com
September
20 to 22 – Brazil Rio Pipeline Conference & Exposition 2011 Local: Rio de Janeiro, RJ Phone:+55 21 2112-9077 Fax: +55 21 2220-1596 congressos@ibp.org.br www.riopipeline.com.br
October
10 to 13 – Argentina Argentina Oil & Gas – AOG 2011 Local: Buenos Aires Phone: +54 11 4322-5707 Fax: +54 11 4322-0916 aog@uniline.com.ar www.aog.com.ar 25 to 26 – Brazil Pernanbuco Business 2009 - Oil & Gas, Offshore, Shipbuilding Local: Recife, PE Phone: +55 21 2112-9077 Fax: +55 21 2220-1596 congressos@ibp.org.br • www.ibp.org.br
November
10 to 12 – Argentina V ExpoGNC 2011 Local: Buenos Aires Phone: +54 11 4300 6137 info@expognc.com www.expognc.com
opinion
of Marilda Rosado de Sá Ribeiro, professor of International Law at Uerj and partner of the law firm of Doria, Jacobina, Rosado e Gondinho Advogados
Great expectations
for the oil and natural gas industry Brasil is currently undergoing a period of growing expectations regarding outlook for the economy and improvements in social indicators. According to data of the Central Bank (Bacen), direct foreign investment reached a peak of $30bn dollars in the last few years.
W
ithin this context, the oil and natural gas industry has been a key factor in attracting such investments. After having survived the most acute crisis in recent years, this year, 2011, could be emblematic, highlighting a new level of opportunities for investors. Proof of this good moment is the 10.8% increase in the nation’s proven oil reserves and the increase in the price of the oil barrel on the international market, reverting what had been the trend of the falling oil price – not only due to the return of growth of global aggregate demand, but also due to the political crisis in the Middle East and North Africa. Upon approval of the bills of law that modify the Brazilian regulatory framework, three structural changes have been made: the institution of the Product Sharing Contract (PSC) only for the pre-salt blocks; the creation of Pre-Sal Petróleo S/A (PPSA); and the remunerated assignment of 5bn of pre-salt oil barrels, without public tender, to Petrobras. Although there are still questions and uncertainty regarding the exploration and production in the pre-salt area, the market is looking out for signs of a return to the Bid Rounds of the National Oil, Natural Gas and Biofuels Agency (ANP), after a recess that has lasted for three years now. Even if the announced 11th Bid Round for Exploration and Production of Oil and Natural Gas does not include pre-salt areas, there is the possibility that a significant number of new foreign players come to Brazil in search of op-
portunities via farm-ins in areas held by companies which already have Concession Contracts. Furthermore, the strengthening of independent companies, some of which have been financially leveraged by recent and successful capitalization operations, has allowed us to witness the avidness of the market for new areas. It would mean a major accomplishment for Brazil to turn the tables and take hold of its immense sedimentary basins, which have been underestimated and underexplored until today by a percentage of less than 7%. Despite the many questions regarding the constitutionality of the new production sharing model and the creation of a new state enterprise, the year 2011 could hold the reconciliation of the market to adapt itself to deal with a hybrid system, which will not only include concession and production sharing agreements, but also the remunerated assignment. Moreover, since the areas of onshore and post-salt exploration will continue to be regulated by the legal framework and contract already practiced, there would be no grounds for postponing a public tender, at least for areas of this nature. The data of budget projections from oil companies already on-site, headed by Petrobras, have also heated the market for services, as can be seen by the T&B Petroleum # 30
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opinion
number of new service providers that have their eye on the growth opportunities. Another noteworthy fact is that this scenario is not even limited to the oil market. Research has pointed out that, with the increasing oil price to levels higher than US$ 90, natural gas has returned as an important and highly feasible economic alternative. In this scenario, the 1st Public Tender for Natural Gas Pipeline Concessions is on the horizon, in the second semester. Petrobras, for example, has already directed a significant part of its budget to expand the nation’s natural gas pipeline network. To take advantage of this positive moment, the company forecast an extension of 1,640 km to the current network. This year will see the consolidation and maturation of the natural gas transport structure, motivated by the approval of Decree 7,382 of December 2, 2010, which regulates the Natural Gas Law (Lei 11.909/2009) which provides for the activities related to the transport, treatment, processing, storage, liquefaction, re-gasification and commercialization of natural gas. There is no doubt that the long-debated definition of the regulatory framework for the oil and natural gas industry – which has consolidated the success of more than a decade since the ratification
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of the Petroleum Law (Lei 9.478/97), and aggregates new solutions in a clear and equal process, attaining the so-desired legal security that assures stability in the industry – will win the confidence of investors. On the front of the independent players, the good news is that provision of Law 12,351 of December 22, 2010, of the Executive Power establishes policies and specific measures to increase the participation of small- and medium-size companies in the activities of exploration, development and production of oil and natural gas. Therefore, it is expected that the doubts and gaps have been overcome and the industry has been propelled by the favorable moment Brazil is passing through in capturing resources, confronting technological challenges, logistics and training of human resources to consolidate a new height for the Brazilian oil and gas industry. In a way that is consistent with the claims of new values consecrated by our legal system, this sustained growth shall come handin-hand with the increase in the Human Development Index of our country. This text was written in collaboration with attorneys Amalia Casas de las Peñas, Ilana Zeitoune and trainee Igor Aragão, from the Oil and Gas Department of the law firm of Doria, Jacobina, Rosado e Gondinho Advogados.
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