T&B Petroleum by Webmaster TN Petróleo

opinion

Fifteen years of the Petroleum Law: progress and outlook,

OIL I GAs I BioFUELS

by Maria D’Assunção Costa, lawyer, Ph.D. in Energy from IEE/USP

Seismic surveys: tracking down the oil Norway: a technological ocean crossing Rio Oil & Gas 2012 Preview: Three decades of international recognition

Year XIII • September 2012 • Issue 33 • www.tbpetroleum.com.br

Special: Petrobras Business Plan

Petrobras will invest

US$ 236.5 billion by the year 2016

The current context of the Brazilian oil and gas industry, by Claudia Rabello

Special issue

Concession and sharing beyond semantics, by Antonio Bastos A. Sarmento

Leads industry agenda for flare gas recovery, by Bjørn Eiken Hartveit

Special interview:

Francisco Itzaina, president of Rolls-Royce for South America

Full-speed ahead for offshore energy

Francisco Itzaina, president of Rolls-Royce for South America

entrevista special interview exclusiva

FULL-SPEED AHEAD FOR OFFSHORE ENERGY by Rodrigo Miguez

TO MAINTAIN THIS leading position and meet domestic content requirements, the company is investing US$ 100 million in a new manufacturing plant in Rio de Janeiro. “Rolls-Royce is committed to continue expanding its technological presence, as well as its production capacity in Brazil”, states Francisco Itzaina, president of Rolls-Royce for South America. The new plant, slated to start operating by the first half of 2013, will produce and test the equipment acquired by Petrobras. In all, a total of 62 units with gas-powered RB211 industrial turbines have been installed in Brazil over the past 10 years. The total combined power generated by these units is equivalent to 1.8 giga-watts of electric power – enough to meet the needs of a city of seven million inhabitants. T&B Petroleum – What is the meaning of the agreement signed with Petrobras for supplying the 32 turbo-generators that will be assembled at the new plant in Rio? Francisco Itzaina – The agreement with Petrobras – which has had a partnership with Rolls-Royce for over 30 years now – demonstrates our commitment to development of activities in the Brazilian sub-salt layer, as well as reinforcing our alignment with Brazilian local content. To achieve these goals, Rolls-Royce has already targeted local companies with solid potential for supplying the components for the first 32 pieces of equipment, further providing support for development of this chain of domestic suppliers. What can you tell us about this portfolio for the Company’s orders in the Brazilian oil and gas industry? First, it’s important to highlight that the currently operating Rolls-Royce gas turbines, added to the 32 that will be delivered to Petrobras, will account for over half of all the power generated at that company’s offshore rigs. Our growth in Brazil is largely due to our leadership position in this type of endeavour, thanks to our Energy and Maritime units. Our principal focus in Brazil is in propellers and engines for drill ships, as well as equipment packages for platform support vessels. We’ve already sold around 100 turbines and compressors for natural gas in South America, with more than 40 RB211 and Avon turbines just in Brazil. Most of this equipment is for offshore activities, with most of the RB211 industrial generators being installed in ocean applications of Petrobras.

OUR PRINCIPAL FOCUS IN BRAZIL IS IN PROPELLERS AND ENGINES FOR DRILL SHIPS, AS WELL AS EQUIPMENT PACKAGES FOR PLATFORM SUPPORT VESSELS. Foto: Divulgação

With US$ 650 million in agreements signed to supply RB2011 gas turbine turbogenerators at the end of last year, RollsRoyce will guarantee power to more than half of Petrobras’s offshore oil rigs near the coast of Brazil.

T&B Petroleum 33

special: especial: BP 2012-2016 sísmica

Photo: Stock.xcng /T&B Petroleum Image Bank

sísmica: no rastro do petróleo

PETROBRAS WILL INVEST

US$ 236.5 BILLION

BY THE YEAR 2016 by Maria Fernanda Romero

The Five-Year Business Plan for 2012-2016 approved at the end of June by Brazil’s state-owned oil and gas enterprise (O&G SOE) calls for an increase of 5.25% over the previous five-year plan (US$ 224.7 billion for the 2011-2015 period). Investments may be on the rise, but Petrobras has decided to revise its production forecasts, which are now reduced. “Historically, these targets have never been met”, Graça Foster, the President of Petrobras points out. She notes that this is due to the fact that they have never been realistic. According to the SOE, the new plan stresses the recovery of the production curve for oil and natural gas; exploration and production (E&P) of oil and gas in Brazil; the alignment of physical and financial targets of each project; and the development of the SOE’s business with solid financial indicators. 16

n the 2012-2016 five-year business plan, which calls for investments of US$ 236.5 billion, Petrobras has decided to reduce the growth target for production of petroleum in relation to last year. And it has announced a reduction in its production forecasts for the year 2020, from 4.91 million barrels per day to 4.2 million. As far as the SOE’s president Graça Foster is concerned, not only were the targets unrealistic, the figures were too bold. “We checked and found out precisely that the last 8 business plans had not met production targets. So, one

of our conclusions is that our plan was based on bold targets that year after year turned out not to be realistic”, the CEO told analysts, investors and the media. The new forecast indicates daily production of 2.5 million barrels for 2016, whereas the previous plan predicting that Petrobras would reach 3.07 million barrels per day (bpd) in 2015. Taking into account oil, LNG (liquid natural gas) and natural gas, both in Brazil and overseas, the 2016 target is 3.3 million boe/ day, with 3.0 million boe/day being produced in Brazil. The greatest production growth (5 to 6%) is expected to occur as from

the year 2014, while expectations are for maintenance of production along the lines of the level of 2011 (about 2%). “It’s been necessary to revise the oil production curve, aimed at absolutely realistic targets, and a pragmatic vision of actual projects. It’s not possible to consider miracles when you have strong demand in the world and in Brazil,” she states. The new production curve is based on a review of the operational efficiency of the systems operating in the Campos Basin and the timetable for the entrance of new units into production over the period covered by the Plan.

T&B Petroleum 33

Photo: Courtesy PGS

Seismic surveys:

Photo: Courtesy Geo RXT

especial: special: seismic sísmica

tracking down the oil

Photo: Courtesy Schlumberger

by Beatriz Cardoso and Rodrigo Miguez

With around a dozen ships authorized to acquire data on Photo: Courtesy CGG Veritas

the sub-soil along the Brazilian coastline, and land seismic survey groups scattered from North to South, the centuryold technology – which helped discover the giant sub-salt layer fields in the Campos and Espírito Santo basins in the Southeast – continues to be the trusty retriever dog of oil companies operating here. Besides requiring new surveys,

Photo: Courtesy Georadar

such companies are reprocessing data that is now up to four decades old... and with highly positive results. 28

T&B Petroleum 33

Foto: Divulgação

special: norway

NORWAY:

Capital: Oslo Area: 385,155 km² Population: 5 million Density: 12 inhabitants per km² GDP: US$ 280 billion Annual Per Capita Income: US$ 59.3 thousand

a technological ocean crossing

HDI (2011): 0.943 Literacy Rate: 99.0% Currency: Norwegian Crown Official Website: www.regjeringen.no

Main Industries: petroleum and natural gas, food processing, shipbuilding, wood and pulp products, metals, chemical products, timber, mining, textiles, fishing.

From codfish to petroleum, Norway has incisively increased its presence in the Brazilian market, always with its eyes turned to the sea. In the most authentic Viking style, Norwegian industry has begun an Atlantic Ocean crossing that is unprecedented in its history: from the chilly waters of the North Sea to the tropical coast of Brazil in the South Atlantic, bringing on board investments and technological solutions to overcome a new challenge – the conquest of the Brazilian offshore market. by Beatriz Cardoso

he announcement made by Aker Solutions at the end of June to invest US$ 100 million in a new Brazilian service unit exclusively oriented to the drilling equipment business is not an isolated action on the part of Norwegian industry in Brazilian territory. Far from it: today, no less than around 150 companies from

T&B Petroleum 33

the Land of the Midnight Sun have manufacturing plants or offices here, and another 50 are active in Brazil through agents or partners. Included among them are companies the size of the oil giant Statoil and the world-wide classification firm DNV (Det Norske Veritas), as well as other leading global companies as Aker, Acergy, Deep Ocean, BW Offshore, NorSkan/DOF and SeaBrokers, and

shipyards and naval design companies, such as Havila, Havyard and Ulstein, among others, which are major players recognized in the international shipbuilding and offshore market. The fact is that in the past five years a veritable air and maritime route has been consolidated between the far-away country in the extreme North of Europe, which extends above the Arc-

tic Circle, and Brazil, which is crossed by both the Equator and Tropic of Capricorn. It is a route driven by a lot of powerful energy – fossil fuels (petroleum and gas) and renewable energy. And this route is not just restricted to business deals – which range from investments in acquisitions and installation or expansion of manufacturing plants to the sale of goods and services. It also

involves the training of human resources, partnerships in the area of research, development and innovation, and technological generation and transfer to Brazil. It is estimated that around US$ 30 billion has been invested in Brazil by Norwegian companies, with most of this volume being carried out in the past decade, in such key sectors as O&G, shipbuilding, mining and other industries. But the investments and interests go much further, chiefly to segments that require leading-edge technology, such as renewable energy, environmental monitoring, IT, etc. – and, obviously, food, such as the delicious Norwegian codfish reaching Brazilian tables ever more quickly and in greater quantities. In the case of coldwater fish, access has come about both owing to the growing trade relations between the two nations, as well as the economic boom experienced by Brazil in the past decade. Such growth has made it possible for Brazilians to enjoy goods and services previously restricted to the nation’s elite (while in Norway,

codfish is relished by all social classes and tastes). Yet it is the exceptional expansion of the O&G industry, mainly on account of the huge discoveries made in the pre-salt layer (and also in the post-salt layer) in Brazil’s offshore fields, that has provided the thrust for this Viking oil industry, accustomed as it is to facing tremendous challenges in such inhospitable regions like the Sea of Norway, to cross the seas in search of hospitable “ports” on the coast of Brazil. Strategic support Skippering the Norwegian “squadron” is the nation’s government, which through its institutional arms plows the seas for the country’s companies. One of these arms is precisely Innovation Norway (IN), the governmental promotion agency, created in 2003 to spread the word on the expertise of its industry in various segments, even more so in shipbuilding and offshore concerns, where it is internationally recognized. In just a decade, the agency has implemented a bold strategy to go international in a big way, T&B Petroleum 33

Leadership in Offshore Class and Related Services

Rio Oil & Gas 2012 Preview

events

e-mail: absrio@eagle.org • Phone: + 55 21 2276-3535

“Innovate and grow with responsibility” is the theme of the Rio Oil & Gas (ROG) 2012 Expo and Conference, an event organized by the Instituto Brasileiro de Petróleo, Gás e Biocombustíveis (IBP – Brazilian Petroleum, Gas and Biofuels Institute) and bringing together a total of 1,500 exhibitors, 200 more than its last edition in 2010. This is the 16th edition of ROG, created 30 years ago, and is now the largest event of its kind in Latin America and an international reference on the discussion and exposure of the oil and natural gas industry, with three decades monitoring and contributing to the development of the Brazilian oil and natural gas industry and the country’s insertion on the international scene.

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

Photos: Ricardo Almeida

by Maria Fernanda Romero

ThRee decAdes of international recognition

he organizers expect 55,000 visitors – 2,000 more than the previous edition – to attend the event, which covers an area of 38,000 m². The 16th edition of the Rio Oil & Gas conference will be even bigger because, in addition to occupying Riocentro’s five pavilions, it will have more stands and a new theme block – Industry ma-

nagement and scenarios – which will address issues relevant to the sector in more detail. The initiative will allow participants to discuss some issues such as new exploration frontiers, operational safety, national content, professional qualification, new technologies, responsibilities related to environmental accidents and sustainable mobility. Álvaro Teixeira, Executive Secretary of IBP, explains that

this year ’s conference theme was chosen because the oil and gas sector has shown a growing concern for improving its performance, innovating and developing new technologies and improving procedures with the aim of increasing operational safety. “This is critical for the sustainability of exploration and production activities in deeper and deeper waters. The industry is aware of the risks, but also of how important the planet’s sustainability is for future generations. It is imperative for the industry to grow,

T&B Petroleum 33

Rio Oil & Gas 2012 preview

Three decades of international recognition coffee break

C O N F E I TA R I A C O LO M B O

Centennial Flavor

One of the most traditional art nouveau ambiance in Rio de Janeiro, Confeitaria Colombo, located in the heart of the city’s downtown area, gets ready to celebrate 118 years this September, while remaining true to its philosophy of combining the best service with the tastiest treats.

by Orlando Santos

Photos: Courtesy Colombo

Colombo continues to bet on the House’s tradition and agile business management, and on maintaining a loyal customer base which, quite often, is already in the fifth or sixth family generation. Without giving in to modern times the most famous pastry shop in the country, which has been cited in every shape and form, preserves its superb art nouveau decoration - Belgian crystal mirrors, French stained glass, rosewood furniture and Italian marble countertops. Add to all of this an army of more than 70 people, creating and preparing all kinds of snacks and sweets that helped the pastry shop build its centennial success. Leading the team is Renato Freire, a chemical engineer from the state of Minas Gerais, who has been Colombo’s Executive Director for 12 years, showing that having the right chemistry is necessary even when it comes to gastronomy. A flavorful history lesson – Colombo, the city’s ultimate belle époque symbol, is part of the Historical and Artistic Heritage of Rio de Janeiro. And the pastry shop lives up to the title: it has a collection that goes beyond the great halls with their crystal mirrors and stained glass, halls that were the welcoming stages for distinguished visitors such as King Albert of Belgium in 1920, Que-

Coffee Break

en Elizabeth of England in 1968, and even politicians, writers and artists. Silver platters from Portugal, porcelain tableware made by the company Vista Alegre, more than 500 old menus, photos and packaging materials of the products that were sold by the pastry shop during the last century are all part of the gorgeous collection, exhibited in the Espaço Memória (Memory Space). Created in 2002, the Space can be reserved for events of up to 30 people. 60 years of service – Loyalty is not restricted to the customers: waiter Almeida Orlando Duque (far right in the photo) celebrated 60 years of exclusive dedication to Confeitaria Colombo this July, always working at the pastry shop located on Rua Gonlçalves Dias, in the downtown area. At the age of 74, Duque is the employee that has been working at Colombo the longest. It was here, at the time when Rio was the capital of Brazil, that he served the most prestigious politicians and intellects, including Getúlio Vargas, Juscelino Kubitschek and even the Queen of England. A true enthusiast of the soccer team Vasco, Duke does not mind one bit when he gets the room ready for the illustrious flamenguistas to meet in Colombo: he has a ritual every Tuesday at around noon: he takes Flamengo’s pennant flag from the cabinet and places it on the table, on the 2nd floor next to the elevator, where the highest ranked members of the red and black soccer team have met for the last 70 years or more. A flavor researcher – Renato Freire could have followed other careers with his degree in chemical engineering and economics. He could even be a maestro, given that he leads an impeccable team, like an orchestra, that never misses a note. Or even a writer, with the two books he has published. But it was in the kitchen, mixing a little of all these ingredients, that he found his true vocation. Born in Boa Esperança, Minas Gerais, he comes from a family with a long history of culinary tradition, raised on a farm that was almost self-sufficient in terms of basic products, Renato Freire has been to Belo Horizonte, São Paulo and the Netherlands, until he got to the centennial Confeitaria Colombo, 12 years ago. Like a researcher, the chef went through the pastry shop’s old files and, with the help of former employees and confectioners, he brought back to the menu some true delights from the heydays: the cashew-based petit four (with no flour), the little sandwiches made with pain de mie (pullman loaf) that were served to Queen Elizabeth on her visit to Brazil, the ice cream soda, Rivadávia (sponge cake discs filled with dulce de leche, fondant icing) and even the famous Leque biscuits, the gaufrettes (handmade waffle cookies made in Colombo since 1920, with the pastry shop’s own recipe). Renato also made his mark by creating tasty novelties, making Colombo’s menu even more diverse than it already was. With his oven the chef created the quindim de camisola (a custard with egg yolk, coconut and sugar

Luiz B. Rêgo Luiz Eduardo Braga Xavier Marcelo Costa Márcio Giannini Márcio Rocha Melo Marcius Ferrari Marco Aurélio Latgé Maria das Graças Silva Mário Jorge C. dos Santos Maurício B. Figueiredo Nathan Medeiros Paulo Buarque Guimarães Roberto Alfradique V. de Macedo Roberto Fainstein Ronaldo J. Alves Ronaldo Schubert Sampaio Rubens Langer Samuel Barbosa

as the main ingredients), pastel de avelã com feijão branco (hazelnut pie with white beans), pastel de chocolate com pimenta (chocolate pie with pepper), among other goodies. His latest creation for Colombo is the pastel de caipirinha. All of this in addition to managing three kitchens to ensure a daily production of more than a thousand sweets and an equal number of salty snacks, all 100% handmade. And he does it without any surprises, with a team of 72 people helping him, and with the responsibility of keeping alive the centenary history of one of the city’s most traditional places. In 1988, the chef published his first book, A mágica da cozinha (The magic of the kitchen), which had five editions. In 2008, together with Sommelier Deise Novakoski, he published Enogastronomia (Enogastronomy), on the art of combining menus and wines. While leading Colombo, he still found time to review the books: Técnicas de confeitaria profissional (Professional confectionery techniques) and Técnicas de cozinha profissional (Professional kitchen techniques). In 2010, he translated Técnicas de padaria profissional (Professional bakery techniques). And he is ready to take out of the oven (or rather, the printing press) a true encyclopedia of make-believe-gastronomy. Yet, this chemical chef and writer has an even bigger dream: writing a story and recipe book on Colombo…but this is just a matter of time. CONFEITARIA COLOMBO Rua Gonçalves Dias, 32 – Centro/RJ; Tel.: (21) 2505-1500 Capacity: 350 seats; Monday through Saturday (closed on Sundays) CAFÉ DO FORTE (Colombo at Copacabana) Praça Coronel Eugênio Franco, 1 – Posto 6 – Copacabana/RJ Tel.: (21) 3201-4049 / 2247-6168 Services available for up to 50 guests, Tuesday through Friday

T&B Petroleum 33

Confeitaria Colombo

Centennial flavor article 74 The current context of the Brazilian oil and gas industry,

Year XIII • Issue 33 • September 2012 Photo: TN Petróleo

by Claudia Rabello

by Antonio Bastos A. Sarmento

T&B PETROLEUM

80 Concession and sharing beyond semantics,

GE Energy Power Conversion

68 products and services 84 coffee break 86 meeting 87 opinion

SPECIAL – PETROBRAS WILL INVEST US$ 236.5 BILLION BY THE YEAR 2016

GE Energy’s Power Conversion business is at work. In the roughest waters. Under the toughest conditions. Applying our power conversion expertise to help improve process efficiency, infrastructure reliability, and environmental friendliness. Working with our offshore customers to meet the demands and opportunities of the new electric age. We’re making change happen—electrifying change.

sections

OIL I GAS I BIOFUELS

Norway: a technological ocean crossing Rio Oil & Gas 2012 Preview: Three decades of international recognition

Year XIII • September 2012 • Issue 33 • www.tbpetroleum.com.br

Special: Petrobras Business Plan

PETROBRAS WILL INVEST

US$ 236.5 BILLION BY THE YEAR 2016

The current context of the Brazilian oil and gas industry, by Claudia Rabello

Special issue

Concession and sharing beyond semantics, by Antonio Bastos A. Sarmento

Leads industry agenda for flare gas recovery, by Bjørn Eiken Hartveit

Special interview:

Francisco Itzaina, president of Rolls-Royce for South America

ge-energy.com/electrifyingchange

# 33

2 editorial 4 hot news 50 events 64 professional profile 66 company profile

Fifteen years of the Petroleum Law: progress and outlook, by Maria D’Assunção Costa, lawyer, Ph.D. in Energy from IEE/USP

Seismic surveys: tracking down the oil

electrifying reliability

82 Leads industry agenda for flare gas recovery, by Bjørn Eiken Hartveit

opinion

Full-speed ahead for offshore energy

editorial

Great opportunities lie ahead!

he oil & gas industry is experiencing a special moment, not only due to the many technological challenges that will allow us to go beyond the new exploratory frontiers, but also because Brazil has become the center stage of the oil & gas industry worldwide. Therefore, this is a particular-

ly interesting moment that could potentially lead to a new realm of understanding and of economic and social development. Brazil cannot let this opportunity slip by; that is, it must grasp the rising interest in the country and in the wealth of the pre-salt, the increasing investments in the various segments of the commodity chain, the training of professionals and the development of knowledge that this process has the potential to generate in order to improve the country in every possible way. In other words, it must usher in greater equality, better education and health care, create more jobs as well as improve public policies, infrastructure projects… and decrease corruption! Actually, the opportunities are numerous, as the reader will find in the set of articles of this special edition prepared for the 16th Rio Oil & Gas Conference, which turns 30 (practically double the ‘age’ of TN Petróleo, which turns 15 in 2013). Both Rio Oil & Gas and TN reflect the evolution of the Brazilian oil industry, which is going to participate in the expo and the conference (since most of the projects were developed in the companies), alongside the main players of the international oil & gas commodity chain. This global participation is directly related to the volume of investments projected until 2016 - US$ 236.5bi at Petrobras alone, as our cover story explains. This vast volume of resources, which will be complemented by investments from other operators in the country, is stimulating other suppliers in this industry. For instance, the seismic area has grown and has advanced to assist in the discoveries and management of hydrocarbon production in increasingly complex scenarios in Brazil. This edition also contains an article about Norwegian companies, which strengthen ties with the Brazilian market, not only for the supply of goods & services, but also to test technologies in new technological frontiers, such as the pre-salt, among other relevant topics of this market that is expanding and becoming one of the most important segments of the economy. This is why we reiterate the importance of taking advantage of this moment to write a new chapter. Brazil will no longer be a country of the future but a country of the present – a country that wishes to build a different future. This is what I hope for and I believe the reader wishes the same. Benício Biz Diretor executivo da TN Petróleo

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 (21 8241-1133) liamedeiros@tnpetroleo.com.br EDITOR Beatriz Cardoso (21 9617-2360) beatrizcardoso@tnpetroleo.com.br ART and CULTURE EDITOR Orlando Santos (21 9491-5468)

T&B Petroleum 33

REPORTER Maria Fernanda Romero (21 8867-0837) fernanda@tnpetroleo.com.br Rodrigo Miguez (21 9389-9059) rodrigo@tnpetroleo.com.br Karolyna Gomes (55 21 7589-7689) karolyna@tnpetroleo.com.br INTERNATIONAL AFFAIRS Dagmar Brasilio (21 9361-2876) dagmar.brasilio@tnpetroleo.com.br GRAPHIC DESIGN Benício Biz (21 3221-7500) beniciobiz@tnpetroleo.com.br

TRANSLATION Rick Toledano (55 21 9880-9905)

DISTRIBUTION

COMMERCIAL José Arteiro (21 9163-4344) josearteiro@tnpetroleo.com.br

Member of ANATEC

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The articles are the responsibility

Bruna Guiso (21 7682-7074) bruna@tnpetroleo.com.br

Benício Biz Editores Associados.

of the authors, not necessarily representing the opinion of the editors. T&B Petroleum is

Luiz Felipe Pinaud

directed to engineers, geologists,

(21 7861-4828) l.felipe@tnpetroleo.com.br

technicians, researchers and buyers

PRODUCTION GRAPHIC and WEBMASTER Fabiano Reis (21 3221-7506) webmaster-tn@tnpetroleo.com.br

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T&B Petroleum 33

hot news

The Brazilian business unit of Aker Solutions, Drilling Riser (ADR), has just delivered 116 riser joints to Sevan Drilling, a Norwegian oil drilling concern. The equipment was delivered prior to the deadline set by the drilling company and will be used in the project known locally as Projeto Sevan Brasil for the new cylindrical drilling rig that will perform exploration work in the sub-salt layer of the Santos Basin. Drilling Riser is the only plant in South America that manufacturers the company’s risers, which is exclusive technology developed by Aker Solutions. According to ADR’s vice-president, Paulo Cesar Abreu, the equipment is indispensable for the drilling activities and links the rig to the seabed, in this case to the blowout preventer (BOP) equipment. “Added to the BOP, the riser joints constitute a system that is vitally important to guarantee well safety, in that they control the vertical pressure. Each riser joint weighs almost 27 metric tons and measures 75 ft. (23 m) in length”, Abreu explains.

Photo: Courtesy Aker Solutions

Aker Solutions delivers riser joints to Sevan Drilling

He clarifies that one of the highlights of the project was the planning, since the team that developed the risers met periodically to evaluate the schedule for the activities and used as a reference a timetable for delivery up to 15 days in advance. “In this manner, production stayed complete and operated at full capacity”, he adds. The company has ISO 9001 certification issued by Lloyd’s Register Quality Assurance, the biggest and oldest certification agency in the world, which demonstrates the commitment to quality on the part of Aker Solutions. “The success of this project was the result of the practical application of corporate values, demonstrating the team’s strong spirit

Mendes Júnior clinches deal with OSX to build oilrigs The Minas Gerais construction firm Mendes Júnior, in partnership with OSX, inked an agreement in August to build and assemble two offshore oilrigs to produce petroleum on the high seas for a consortium formed in conjunction with Petrobras. The deal is part of the construction firm’s plans to compete for contracts related to exploratory work in Brazil’s sub-salt layer. The firm, which in recent years has been working on projeccts for oil refineries and pipelines, is now searching for land to build its shipyards. The project, still without a defined site, would 4

T&B Petroleum 33

involve the construction of rigs that would mainly meet the needs of Petrobras. The forecast for the investments slated is from R$ 800 million to R$ 1 billion. Although the firm’s image is often associated with major engineering projects – such as the Anhanguera highway in São Paulo, the Rio-Niterói bridge, the Itaipu hydroelectric power plant on the Paraná River, and the subway systems of São Paulo and Rio, at present Mendes Júnior ’s main focus is the O&G industry. In 2010, 61% of its operating revenues already came from

in working together and their commitment to issues related to quality, health, safety and the environment,” the vice-president states. “With the delivery of this project, Aker Solutions reinforces its strategy for achieving maximum development and local content, allying our ongoing commitment to quality with the constant striving for customer satisfaction,” points out the president of the company in Brazil, Luis Araujo. Aker Solutions recently announced the start-up of construction of a manufacturing unit that will be dedicated to drilling equipment. The plant will house the expansion of the Drilling Riser unit, presently operating in Rio das Ostras (RJ). oil- and gas-related activties. Last year this share jumped to 70%. The firm’s net revenues in 2011 amounted to R$ 1.25 billion – a drop in relation to the R$ 1.44 billion achieved in 2010. The forecast for this year is further growth, though the firm has not yet disclosed its final projections. Under the agreement signed in partnership with OSX, Mendes Júnior will build part of the modules and assemble two floating petroleum strorage and offloading (FPSO) units, numbered P-67 and P-70. The projects, which involve a total of US$ 900 million, were ordered by a consortium comprised of Petrobas, BG Group and Petrogal Brasil and should be ready in 60 months.

Repsol and Petrobras make a significant gas find in Peru Repsol has made a new gas discovery in block 57 in Peru. The well, known as Sagari, was successful in two different formations, known as Nia Superior and Nia Inferior. Preliminary estimations indicate the field may hold between 1 and 2 trillion cubic feet of gas resources. Repsol is the operator of the block with a 53.84% stake. Petrobras holds the remaining 46.16%. The Sagari find reinforces the potential of this area in Peru, home to the Repsol’s Kinteroni find, one of the five biggest discoveries made worldwide in 2008 and currently under accelerated development with first gas planned for the end of 2012. Production tests carried out at depths of between 2,691 and 2,813 metres produced gas flows of 26 million cubic feet of gas with 1,200 barrels of condensate per day in one formation, and 24 million cubic feet of gas with 800 barrels of condensate per day in the other. The sum of both tests indicates about 11,000 boepd. Repsol plans to carry out further exploration in the block once the production tests are complete. Repsol in May presented its 2012-2016 strategic plan with ambitious growth targets based on

Petrobras starts production of FPSO Cidade de Anchieta in presalt of Campos Basin the strengths of its exploration and production units, the company’s growth engine. The plan envisages investment of over 19 billion euros in the next five years and annual production growth of 7% to reach 500,000 barrels of oil equivalent a day in 2016. This is higher than the industry average. Repsol also plans to add six barrels of oil equivalent to reserves for every five barrels pumped during the period. Repsol has made more than 30 oil and gas discoveries in the last five years, including five which are amongst the largest made worldwide, significantly bolstering future reserve and production growth prospects.

InterMoor completes conductor installation offshore Brazil at Papa Terra InterMoor says it has completed installation of the drilling and production conductors for the Papa Terra project FPSO in the Campos basin offshore Brazil. The conductors were installed in water depths of 3,937 ft (1,200 m). InterMoor chartered the Skandi Skolten, DOF Subsea’s

construction anchor handling vessel, and the installation barge with a custom conductor launch system. For conductor driving, InterMoor used MENCK’s MHU-270T DWS which included a deepwater hydraulic hammer. Both InterMoor and MENCK GmbH are Acteon companies

Petrobras has started the oil production at well 7-BAZ-02-ESS through the platform Cidade de Anchieta. The platform is located in the Baleia Azul field in the area known as Parque das Baleias, off the coast of the state of Espírito Santo in Campos Basin. This platform, which is an FPSO (Floating, Production, Storage and Offloading), is exclusively dedicated for pre-salt production at Baleia Azul, Jubarte and Pirambu fields, in which Petrobras holds a 100% stake. FPSO Cidade de Anchieta will produce oil of high commercial value (28º API). The FPSO was chartered to SBM Services Inc., and has the capacity to process 100,000 barrels of oil and 3.5 million m3 of gas per day. The platform is installed at a water depth of 1,221 meters, 80 km off the coast. The produced natural gas will be pumped through the Sul-Norte Capixaba pipeline to the Nautral Gas Treatment Unit in Cacimbas, on the coast of Espírito Santo state. The initial production of well 7-BAZ-02-ESS, which is already connected to the platform, is estimated at 20,000 barrels per day. An additional 9 wells (6 production wells and 3 injection wells) will be connected to the platform. Peak production of 100,000 barrels per day by is expected to be reached in February 2013. FPSO Cidade de Anchieta was converted at the Keppel shipyard in Singapore and is part of the pre-salt development project for the Parque das Baleias area. T&B Petroleum 33

hot news

The output of the Brazilian sub-salt layer in July was 172.8 thousand barrels of oil per day and 5.7 million cubic meters of gas, for a total of 208.9 thousand barrels of oil equivalent per day (Mboe/d) - fully 9% over the previous month, when the total reached 191.2 Mboe/d. This was the highest production figure from these reservoirs, exceeding for the second time the mark of 200 Mboe/d. The first time was in December of 2011, with production of 200.6 Mboe/d. These achievements were the result of output from 10 wells, located in the fields known as Jubarte (1), Lula (5), Caratinga and Barracuda (1), Marlim Leste (1), Marlim and Voador (1) and Barracuda (1). Of the 10 sub-salt layer wells currently producing, seven are among the 30 biggest producers. Production highlights were the wells of the Lula Field, three of which are among the five biggest producing wells, with the one known as 7LL3DRJS standing out as the biggest single producer in the month of July, with average output of 37.2 Mboe/d. All told in Brazil, oil production totalled roughly 2.023 million barrels per day, a 2.6% dip in relation to July, 2011 and 0.5% compared with June of this year. Gas production reached 71 MMm³, a rise of

Photo: Petrobras Agêncy

Sub-salt layer production beats record in July

6.1% in relation to the same month of 2011 and a reduction of 1.4% in comparison with the previous month. Oil rig No. P-52, located in the Roncador field, produced the most -- 151.1 Mboe/d. The biggest reductions in production of petroleum and natural gas in relation to the previous month were noted at the fields known as Marimbá and Albacora Leste, due to scheduled maintenance shutdowns at oil rigs Nos. P-08 (Marimbá) and P-50 (Albacora Leste). The Marlim Sul Field in the Campos Basin was the one that accounted for the highest output of petroleum and the second highest production of natural gas, with average output of 321.9 Mboe/d. The burning of natural gas, 3.6MMm3/d in July of this year, represented a drop of almost one third (30.7%) in relation to the same

month in 2011, but actually rose slightly (0.4%) compared with the previous month of June. In July of 2012, 308 concessions operated by 26 companies were responsible for the national output. Of this total, 79 are offshore concessions and 229 onshore. It should be pointed out that of the total of producing concessions seven are engaged in exploratory activities and producing on the basis of long-duration testing (LDT), while another 11 relate to contracts for areas containing marginal accumulations. The average API grade of the petroleum produced in July was approximately 23.8º, with 8% of the produdction being ranked as light oil (>=31°API), 57% médium oil (>=22°API and <31°API) and 35% heavy oil (<22°API), according to the ranking published by Administrative Ruling No. ANP 09/2000, issued at the start of the previous decade by the Brazilian National Agency for Petroleum, Natural Gas and Biofuels - ANP. The production of petroleum and natural gas in Brazil came from a total of 9,005 wells, 755 offshore and 8,250 onshore. The field with the highest number of producing wells was Canto do Amaro, in the Potiguar Basin, with 1,113 wells.

Transocean sells shallow-water drill rigs to Shelf Drilling Transocean Ltd. has agreed to sell 38 shallow-water drilling rigs to Shelf Drilling International Holdings, Ltd. for approximately $1.05 billion. The transactions are expected to close in 4Q 2012, subject to certain conditions. 6

T&B Petroleum 33

Shelf Drilling is a newly formed company sponsored equally by Castle Harlan Inc., CHAMP Private Equity, and Lime Rock Partners. “This agreement marks an important milestone in our asset strategy to increase our focus on high-specification floaters and jackups, improving our long-

-term competitiveness,” said Steven L. Newman, President and Chief Executive Officer of Transocean Ltd. “Our strategy will be to maintain an exclusive focus on shallow water drilling…” said David Mullen, president and CEO of Shelf Drilling.

Global O&G Capex to Exceed $1 Trillion Increased activity in the Exploration and Production (E&P) sector will be the primary driver in pushing oil and gas capital expenditure (capex) to an enormous $1,039 billion for 2012, states the latest report by natural resources experts GlobalData. The new report predicts that the total oil and gas capex will increase by 13.4 percent this year over the 2011 total of $916 billion, as oil companies intensify upstream operations across locations as diverse as offshore Brazil, the Gulf of Mexico and the Arctic Circle. Investor confidence in new upstream projects is being driven by the increasing number of oil and gas discoveries (242 last year alone), combined with consistently high oil prices and the arrival of

new technologies that are giving the major firms access to deep offshore reserves that were previously technically and financially unviable. North America is expected to witness the highest capex globally, with $254.3 billion, representing a share of 24.5 percent of the 2012 global total. Compared to a global average capex growth rate of 13.4 percent, North America is expected to witness a capex growth of 15.7 percent. The increase of unconventional oil and gas activities, especially the continuing exploitation ofshale oil and gas sites and the development of Canadian oil sands are the major drivers for these investments. GlobalData predicts Asia-Pacific to follow very closely with a capex of $253.1 billion, while the

Middle East and Africa are forecast to spend $229.6 billion. National Oil Companies (NOCs) are expected to lead in terms of capex, contributing approximately half of the total, with Integrated Oil Companies (IOCs) and independents making up the remainder. NOCs including Petroliam Nasional Berhad, China Petroleum & Chemical Corporation and Petroleo Brasileiro S.A (Petrobras) plan on substantially increasing their E&P spending this year. In terms of capital expenditure for the 2012–2016 period, Petrobras ranks first globally amongst NOCs, whereas ExxonMobil Corporation is expected to be the number one IOC. Together, these two plan to undertake a massive oil and gas capex of $409 billion through to 2016.

Acquisition of Old School Services LLC Boots & Coots, a Halliburton business line, has enhanced its pressure control offerings with the acquisition of Old School Services LLC. The acquisition gives Halliburton the resources to provide operators with the through-tubing equipment required to resolve production challenges faced by the rapidly growing unconventionals, horizontal drilling and multistage completions markets. Through-tubing – or “thru-tubing” – equipment and services

are vital to the well completion process. They provide methods for removing objects or debris from the wellbore to enable well production, and they offer innovative solutions that allow increased operating depths in the well. OSS has a broad selection of specialty tools for fishing, milling, cleanout, and tubing-conveyed perforating services that complement the well intervention services provided by Boots & Coots.

“Bringing OSS into the Boots & Coots business line creates one of the safest, most experienced and most reliable pressure control offerings in the industry,” said Dee Edwards, vice president of Boots & Coots. “As we expand this service worldwide, our customers will benefit from the most complete suite of pressure control services to help them safely manage and maintain the effectiveness and reliability of their operations.”

- Subsea 3D Laser and Imaging - Laser Scanning 3D - Geomatics - Microseismic - Environmental Solutions T&B Petroleum 33

Phone: +55 22 2773 4937 / +55 22 2763 7511 / +55 22 8112 9261 www.egs-engenharia.com

hot news

AVEVA extends global reach of engineering information management solutions AVEVA and Infosys, a global leader in consulting and technology, have signed a partnership agreement to jointly deliver engineering information management solutions to support the operation and maintenance of process plant and power facilities. This will enable energy, power and chemical companies to have a unified team to deploy, manage and monitor critical high-value assets, resulting in improved return on capital investments. Through this partnership, Infosys will provide global scale and reach to advance the delivery of AVEVA’s suite of information management solutions to clients across the world. Under the terms of this agreement, AVEVA will provide its AVEVA Enterprise software and service portfolio, including

AVEVA NET, to deliver unique information management capabilities based on its Digital Information Hub concept. This is a portal through which users can access information to enable accurate, up to date decision making throughout an asset’s entire lifecycle. Infosys will use its extensive sector expertise to provide management consultancy, as well as programme management, systems integration and technology services, to help companies take full advantage of information management solutions based on AVEVA’s enterprise software. ‘This agreement with Infosys is very significant and will help us to meet the growing demand for our AVEVA Enterprise Solutions’, commented Derek Middlemas, Chief Operating

Officer and Head of Enterprise Solutions, AVEVA. ‘Infosys and AVEVA have highly complementary skills in the delivery of integrated information management solutions. The combination will enable us to offer market-leading enterprise solutions and services for integrated asset and resource management.’ Frederic Ramioulle, Vice President of Global Engineering Services at Infosys added, ‘Customers are focused on getting the maximum return from the substantial outlay they make in plant and machinery. This partnership allows us to provide a comprehensive portfolio of solutions, including engineering, plant information management and industrial control services, to companies making investments in major capital assets.’

Petrobras must accelerate negotiations with foreign groups to build new refineries. According to the Minister of Mines and Energy, Edison Lobão, there are many international companies interested, and the company is talking with companies in Japan, China and the United States, and may reach an understanding with them. The minister cited the Premium I refinery, being built in Maranhão, as a strong candidate to receive investments from China. “The Chinese came to me during the Rio +20 in June, and want a partnership with the Premium I,” Lobão said. “I’m arranging to meet them with the president of Petrobras, Graça Foster, to develop understandings and reach a conclusion.” 8

T&B Petroleum 33

Photo: Petrobras Agêncy

Petrobras seeks foreign partner for refineries

Capable of processing 600,000 barrels per day of oil, the refinery is estimated to R$ 40 billion, according to the latest balance of the Growth Acceleration Program (PAC). His start-up is scheduled for October 2017, but little has been done so far. In late April, only 1.2% of the works had been executed. The project will focus on product-level “premium”, ie, high quality and very low sulfur content.

Lobão ruled out the possibility that capital contribution by foreign partners will be compensated in the future by sending oil or derivatives by Petrobras. “The foreigner will invest, become a member and participate in the company’s results,” said the minister. “The fact is that there are interested and Petrobras does not shy from it, do not want to own myself. Vai She retain a majority stake in any circumstance, but she admits minority partners perfectly.”

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entrevista special interview exclusiva

Full-speed ahead for offshore energy by Rodrigo Miguez

To maintain this leading position and meet domestic content requirements, the company is investing US$ 100 million in a new manufacturing plant in Rio de Janeiro. “Rolls-Royce is committed to continue expanding its technological presence, as well as its production capacity in Brazil”, states Francisco Itzaina, president of Rolls-Royce for South America. The new plant, slated to start operating by the first half of 2013, will produce and test the equipment acquired by Petrobras. In all, a total of 62 units with gas-powered RB211 industrial turbines have been installed in Brazil over the past 10 years. The total combined power generated by these units is equivalent to 1.8 giga-watts of electric power – enough to meet the needs of a city of seven million inhabitants. T&B Petroleum – What is the meaning of the agreement signed with Petrobras for supplying the 32 turbo-generators that will be assembled at the new plant in Rio? Francisco Itzaina – The agreement with Petrobras – which has had a partnership with Rolls-Royce for over 30 years now – demonstrates our commitment to development of activities in the Brazilian sub-salt layer, as well as reinforcing our alignment with Brazilian local content. To achieve these goals, Rolls-Royce has already targeted local companies with solid potential for supplying the components for the first 32 pieces of equipment, further providing support for development of this chain of domestic suppliers. What can you tell us about this portfolio for the Company’s orders in the Brazilian oil and gas industry? First, it’s important to highlight that the currently operating Rolls-Royce gas turbines, added to the 32 that will be delivered to Petrobras, will account for over half of all the power generated at that company’s offshore rigs. Our growth in Brazil is largely due to our leadership position in this type of endeavour, thanks to our Energy and Maritime units. Our principal focus in Brazil is in propellers and engines for drill ships, as well as equipment packages for platform support vessels. We’ve already sold around 100 turbines and compressors for natural gas in South America, with more than 40 RB211 and Avon turbines just in Brazil. Most of this equipment is for offshore activities, with most of the RB211 industrial generators being installed in ocean applications of Petrobras.

T&B Petroleum 33

Francisco Itzaina, president of Rolls-Royce for South America

Photo: Courtesy

Our principal focus in Brazil is in propellers and engines for drill ships, as well as equipment packages for platform support vessels.

T&B Petroleum 33

entrevista special interview exclusiva

The SANTA CRUZ plant will guarantee a gradually higher level of local content, for example, in each gas turbine package And how about the supply for support vessels? In relation to offshore support vessels, just last week we delivered the first ship under the agreement with the local shipyard Navegação São Miguel that is intended to fight oil spillages at sea. At present, over 100 platform supply vessels (PSVs) and anchor handling tug supply (AHTS) vessels are equipped with Rolls-Royce technology, with more than 40 of these vessels being built in Brazilian shipyards. In Brazil, our technology is also a major presence in over 15 drill ships, besides numerous FPSOs and shuttle tankers.

delivered to Petrobras, the components of which will be partially produced by Brazilian suppliers.

The need for more than 60% domestic content in O&G projects was a motive for building a plant

in Rio, or was it already in your company’s plans? Our commitment to expand our firm’s presence in Brazil goes well beyond the signing of an agreement. For this reason, well before the first agreement with Petrobras – to be more precise, six months beforehand – we had already purchased the land in Santa Cruz. The choice of that site was also due to the fact that the City of Rio put into practice a program for improvement of that region. Though, without doubt, the need to increase our level of local content here in Brazil – not just in terms of our equipment, but also by means of our services – led us to make the investments in opening the factory. The plant will guarantee a gradually higher level of local content, for example, in each gas turbine package delivered to Petrobras, the components of which will be partially produced by Brazilian suppliers. When will the first turbo-generators start to be delivered and how many can be built at the same time in the new plant? Each batch is made up of four turbo-generators. The first batch will be delivered in March of 2013, and the remaining

Increasingly Brazilian A global company in terms of power systems, Rolls-Royce has been present in Brazil for over half a century. It also operates here in the aircraft industry. The 32 gas-powered RB211 turbines, including heat recovery units, are aimed at meeting the energy generation requirements of eight floating production, storage and offloading (FPSO) vessels that will operate in the Lula and Guará oil fields in the sub-salt area of the Santos Basin along the southeastern Brazilian coastline. 12

T&B Petroleum 33

The new turbo-generators will be supplied in groups of four, the first being scheduled for delivery in the first half of 2013. Each one of the eight FPSO vessels will be equipped with four gas-powered turbo-generators. To assure that the vessels in question operate at maximum performance level, Rolls-Royce will supply Petrobras with maintenance, technical support and training services over the forthcoming decade. According to Francisco Itzaina, in order to meet the requirements

of these agreements, the company intends to mobilize a local chain of Brazilian suppliers to provide critical components for generation of gas-powered turbines for generation of energy.

Full-speed ahead for offshore energy

seven will be distributed at intervals defined by the agreement through the beginning of 2016. The factory will have the capacity of producing up to three sets of turbines simultaneously. Rolls-Royce is investing R$ 200 million to build the plant. How much will its total investment be in 2012 and in the years ahead in Brazil? In the first phase, Rolls-Royce is investing R$ 200 million in the Santa Cruz factory. Even so, this amount may even double if the projects for construction of a second plant are approved. The second one will be devoted to assembling diesel propellers and generators – as well as a training center – which will be the

company’s fourth in the entire world. Does your company already have a guarantee for injecting another R$ 200 million in the training center and assembling propellers, along with the manufacturing unit? We do not yet have such backing for the project, since it depends of the approval of our Board in London. If it works out, the training center will include an e-learning system, training for instructors and a state-of-the-art simulator. Besides the Petrobras orders, will the Santa Cruz plant serve other companies in the industry? Yes. At first the plant will be dedicated to assembling and testing industrial turbine packages for the O&G industry, but it will also

meet the demands of companies in other industries for power generation systems. How much does your company calculate it will save on importation upon operations of the Rio de Janeiro unit? What I can say at this point is that Rolls-Royce may be saving the equivalent of US$ 1.5 billion on the importation of products and services over the course of the next decade. When will the new installation for repair and overhaul of gas-powered RB211 industrial turbines in São Bernardo do Campo (in the neighboring state of São Paulo) begin operating and what benefits will accrue for Rolls-Royce?

T&B Petroleum and TN Petróleo magazines

OTC and Brasil Offshore 2013 special issues opinião

PETRÓLEO I GÁS I BIOCOMBUSTÍVEIS

Conteúdo local: fortalecendo a cadeia produtiva de óleo e gás no Brasil, de Manuel Fernandes, sócio-líder da área de Óleo e Gás da KPMG no Brasile professor de International Accounting da FGV.

Petroquímica quer crescer com o pré-sal Um rio de energia Maior investimento de Cingapura no Brasil

Ano XIV • set/out 2012 • Nº 85 • www.tnpetroleo.com.br

E&P: prioridade permanente Panorama do setor petróleo no Brasil, por Wagner Freire

Edição especial

Fontes de financiamento e incentivos para a cadeia de E&P no Brasil, por Paulo Buarque e Sérgio Caetano Leite O contexto atual da indústria do petróleo no Brasil, por Claudia Rabello Como o capital de projetos suporta a sustentabilidade, por David Dixon Refino global: como manter a rentabilidade em tempos turbulentos, por José de Sá Supply Chain: mecanismos de financiamento à cadeia de suprimento da Petrobras, por Roberto Alfradique Vieira de Macedo Concessão ou partilha além da semântica, por Antonio Bastos A. Sarmento

Entrevista exclusiva

Francisco Itzaina, presidente da Rolls-Royce para América do Sul

Energia offshore a todo gás!

opinion

Fifteen years of the Petroleum Law: progress and outlook,

OIL I GAS I BIOFUELS

by Maria D’Assunção Costa, lawyer, Ph.D. in Energy from IEE/USP

Seismic surveys: tracking down the oil Norway: a technological ocean crossing Rio Oil & Gas 2012 Preview: Three decades of international recognition

Year XIII • September 2012 • Issue 33 • www.tbpetroleum.com.br

Special: Petrobras Business Plan

PETROBRAS WILL INVEST

US$ 236.5 BILLION BY THE YEAR 2016

The current context of the Brazilian oil and gas industry, by Claudia Rabello

Special issue

Concession and sharing beyond semantics, by Antonio Bastos A. Sarmento

Leads industry agenda for flare gas recovery, by Bjørn Eiken Hartveit

Special interview:

Francisco Itzaina, president of Rolls-Royce for South America

Full-speed ahead for offshore energy

T&B Petroleum 33

entrevista special interview exclusiva

Numbers

Rolls Royce Plant in Santa Cruz, Rio de Janeiro

Area: 103,000 m 2 Investment: R$ 200m Begin operations: March 2013 Specialties: assembly and testing of industrial turbine packages for the oil and gas industry Location: Santa Cruz, Rio de Janeiro

There is no date set for the new service installation to begin operating. If the decision is made maintain the generators that operate on Petrobras rigs in Brazil, expansion may occur in 2013. Even so, if it is decided that maintenance will only involve the equipment ordered recently by Petrobras, the new installation will begin functioning in 2016 or 2017. As for benefits, we can state that the capacity for maintenance and overhaul of such equipment in Brazil proves our commitment to the nation’s growth, in that it keeps us increasingly closer to our local customers – reminding you here that the RB211 turbines are used in Petrobras’s oil rigs. What is your company’s outlook for business in the O&G industry in the years ahead?

The oil and gas market has been growing as a share of the overall sales of Rolls-Royce in Brazil, and should reach 30% in the next 10 years. Your company is also heavily present in the energy industry. How does Rolls-Royce see the Brazilian market, especially for wind power, which is growing by leaps and bounds here? Rolls-Royce is always on the lookout for all opportunities relating to the industries in which it operates, though at present we do not have plans to develop wind power projects. How are things going with the orders placed by Brasil Supply and Navegação São Miguel? Regarding the orders of Navegação São Miguel placed with Rolls-

-Royce, the agreements total investments of around R$ 71 million. The first ship, Mar Limpo II, arising from the agreement was delivered in July. The other five will be delivered by 2014. Those ordered by Brasil Supply will be delivered in 2013. How are the negotiations going in relation to the Petrobras drill ships? To support the growth of the Brazilian offshore industry, the Maritime division of Rolls-Royce is committed to increasing domestic content and participating in several rounds of bidding for drill ships and supply service vessels. We intend to invest in the supply of propellers and equipment for the 33 future sub-salt drill ships that will be made in Brazil.

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T&B Petroleum 33

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special: especial: BP 2012-2016 sísmica

Petrobras will invest

T&B Petroleum 33

Photo: Stock.xcng /T&B Petroleum Image Bank

sísmica: no rastro do petróleo

US$ 236.5 billion

by the year 2016 by Maria Fernanda Romero

special: BP 2012-2016

Foster pointed out that 10 drill ships delivered in 2011, with zero domestic content, amounted to a sum total of 542 days of deliveries behind schedule, which compromised production. This year, of the 12 drill ships scheduled for delivery, 3 are still behind schedule.

Oil prices Petrobras’s Chief Financial and Investor Relations Officer (SFO), Almir Barbassa, adds that maintaining parity with respect to fuel prices is a fundamental point in the SOE’s business plan for the period from 2012 to 2015. “We have to keep up with the international price, making medium- and long-term adjustments, as we’ve been doing”, he says, referring to the recent rise in fuel prices. “We presume parity with the international price. If it’s not reached, it continues to be the goal. The readjustment makes us a target”, Barbassa notes, suggesting that new rises may occur. According to Barbassa, the price for Brent oil should remain at US$ 110.8 (bbl) for the meantime and gradually decrease to US$ 90 over the course of the period. He explained that the financial planning for the 2012-2016 Business Plan does not call for issue of new stock and stresses the need to keep the SOE’s investing rating robust. To achieve the new objectives, Petrobras has three programs that it considers structuring ones in order to sustain the plan: the first to increase the operational efficiency of the Campos Basin; the 18

T&B Petroleum 33

It’s been necessary to revise the oil production curve, aimed at absolutely realistic targets, and a pragmatic vision of actual projects. It’s not possible to consider miracles when you have strong demand in the world and in Brazil” Graça Foster, president of Petrobras

second to optimize operational costs to identify cost-reduction opportunities; and the third to manage local content, so as to take maximum advantage of Brazilian industry’s competitiveness in terms of goods and services.

E&P is the priority Of the total volume of investments forecasted by the plan, US$ 141.8 billion (60%) are

aimed at the exploration and production segment (in Brazil and abroad). In Brazil, E&P will get the lion’s share of US$ 131.6 billion, accounting for almost 95% of the total volume, with around 4.5% (US$ 10.7 billion) being going to projects overseas. Of the US$ 141.8 billion cited above, 68% (US$ 89.9 billion) will be allocated to development of production, 19% (US$ 25.4 billion) to exploration and 12% (US$ 16.3 bi) to infrastructure and support. Investments in the sub-salt layer correspond to 51% of the total to be invested in E&P. Average annual investment will be US$ 47.3 billion. Investments in exploration total US$ 25.4 billion and are aimed at new frontiers, in the nation’s eastern and equatorial margins. “Our reserve/production ratio needs to be kept at a safe level, more than 15 years. This obliges us to invest heavily in exploration and in aggregation of proven reserves that support future production growth”, says the SOE’s Chief Exploration and Production Officer, José Miranda Formigli. At present, he states, the Petrobras reserves/production ratio stands at 19 years. Ms. Foster clarifies that Petrobras revised the timetable of its projects in the area during a period of three months. Besides the contribution of the new systems, the increase in O&G production in Brazil will partly arise from the results to be achieved by Program for Increasing the Efficiency of the Campos Basin (Proef). “This unit represents 25% of our production potential.

Photo: Petrobras Agêncy

Petrobras will invest US$ 236.5 billion by the year 2016

Therefore, we have to strive for it to recover its production, according to targets that can be met, with all the organizational support of Petrobras for the Campos Basin team,” chief E&P officer Formigli commented. In the presentation of the Business Plan (PN), it was highlighted that the SOE’s operational efficiency dropped in recent years, on account of the Campos Basin Operating Unit (UO-BC): in the first quarter of this year the operating efficiency of the latter basin was 72% (71% on average in 2011), while for Petrobras, not computing the results of UO-BC, it was 93%. The general average was 86%.

Petrobras International follows its head office With funding of US$ 6 billion for projects being implemented, out of a total of US$ 10.7 billion, the International Area of Petrobras will keep its focus on E&P, for which it has set aside 85% of such funds. According to Petrobras, the International Area will be seeking out projects that can pay their own way, will not encumber the Company’s cash and will complement business in Brazil. The remainder, US$ 4,7

billion, will be slated for projects still being appraised. “We are seeking out partners and shareholders that see value in our assets overseas and are willing to inject the funds required for full development of our projects”, explained the interim director for the International Area, José Carlos Vilar Amigo.

Refining: revision of timetable In the Supply Area, 45% of the US$ 55.8 billion earmarked for projects being implemented will be invested in increasing Brazil’s domestic refining capacity, corresponding to the projects for the Abreu e Lima Refinery (RNEST) and in the first phase of the Rio de Janeiro Petrochemical Complex (Comperj). Combined, the two units will increase Petrobras’s refining capacity by 400 thousand barrels per day, reaching 2.4 million barrels per day.

According to chief supply officer José Carlos Cosenza, the RNEST will be the Petrobras operating unit responsible for the highest rate of conversion of crude oil into diesel: 70%. Three years behind schedule and with price overruns of 8x original budget, the first phase of the refinery located in Pernambuco should be starting up only at the end of 2014. The final total cost? -- US$ 20.1 billion. Originally it was slated to be US$ 2.3 billion. Currently in the appraisal stage are refineries Premium I and II and the second phase of Comperj. The SOE has confirmed that these projects will go on as planned, but will not be finished before 2017. “There have been no cuts in investments in the new refineries. We are injecting funds compatible with the phases of the projects, within the reality of international metrics, appropriate costs and increasing profitability,” Cosenza guarantees. As far as CEO Foster is concerned, the four refineries under construction by the SOE are important to meet the growing demand for derivatives. “No project has been cancelled. When we say we are reappraising, we can say that we are conducting work to objectively determine the timetable and how much will be needed for the project”, she highlighted.

Gas and energy: fertilizers and thermoelectric power generation In the area of Gas and Energy, priorities have been placed on chemical transformation of natural gas for production of fertilizers. All told, the SOE will invest US$ 13.5 billion in this segment, US$ 5.7 billion T&B Petroleum 33

special: BP 2012-2016

ber of 2014 and will have rated capacity of 530 MW.

Petrobras Business Plan evolution (US$ bn) 240

224.0

224.7

236.5

Biofuels: more than US$ 1 bn for ethanol

220 200

174.4

180 160 140 120

112.4

100 80 60 Ilustração: TN Petróleo

40 20 0

PN PN PN PN 2008-2012 2009-2013 2010-2014 2011-2015 TOTAL

E&P

RTM

G&E

for projects being implemented, such as Nitrogen Fertilizer Unit III (UFN III) in Três Lagoas, Mato Grosso do Sul. “With this unit, expectations are to double production of urea in Brazil”, area officer Alcides Santoro states. Slated for conclusion by September of 2014, UFN III will turn out 1.2 million metric tons of urea per year, as well as 70 thou20

T&B Petroleum 33

Petrochemical

Distribution

PN 2012-2016 Biofuel

sand metric tons of ammonia per year. The rest of the investments being made by Petrobras in the Gas and Energy Area will be used for hauling the gas produced (US$ 2.3 billion), re-gassing projects (US$ 1.9 billion) and generation of electric power (US$ 1.6 billion), among others. Included in expansion of Brazil’s industrial plant for generation of gas-fired thermoelectric power are Rio de Janeiro state’s Baixada Fluminense plant, which is slated for start-up by Novem-

Total investment outlays being made by Petrobras in the biofuels segment is on the order of US$ 3.8 billion. Besides the US$ 2.5 billion going to the SOE’s biofuels division - Petrobras Biocombustível, more than US$ 1 billion is being injected into the area of logistics (ethanol pipelines and terminals) and US$ 300 million is earmarked for R&D. In the biofuels segment, 72% of the injection of US$ 1.8 billion slated for projects being implemented will GO to investments in expansion of ethanol production. “This reflects our absolute priority in expanding production of ethanol in Brazil”, Santoro stresses. Out of this total, US$ 1.05 billion will be invested in projects already in progress, that is to say, expansion of the plants Nova Fronteira/Boa Vista, Guarani and Total. According to the SOE, expectations are to increase by 700 thousand m³ per year the current annual ethanol output, which is 1 million m³ per year, considering the rated capacity of the plants in which Petrobras holds states. The plan further calls for implementation of a biofuel plant in Pará, operation of a secondgeneration ethanol plant and another jet biofuel plant known locally as bioQAV.

Productive chain in expectation The state secretary for Economic, Energy, Industrial and Service Development, Julio Bueno, believes that the path to success for Petrobras is through

Petrobras will invest US$ 236.5 billion by the year 2016

Petrobras Business Plan 2012-2016 1.4% (US$ 3.0 bn) 1.7% (US$ 3.5 bn) 0.9% (US$ 1.9 bn)

1.3% (US$ 3.0 bn) 1.5% (US$ 3.6 bn) 1.6% (US$ 3.8 bn) 2.1% (US$ 5.0 bn) 5.8% (US$ 5.0 bn)

1.8% (US$ 3.7 bn) 3.7% (US$ 7.8 bn)

65.8%

US$ 137.2 bn

Under Implementation 24.8%

US$ 51.7 bn

All E&P projects in Brazil and projects of the remaining segments in phase IV*

US$ 208.7 bn 833 projects

0% (US$ 0.1 bn) 7% (US$ 1.9 bn) 5% (US$ 1.3 bn)

50%

17%**

US$ 4.6 bn

US$ 13.9 bn

21%

US$ 6 bn

E&P

RTM

G&E

27.7%

60%

US$ 141.8 bn

Under Evaluation

US$ 65.5 bn

Projects for the remaining segments currently in phase I, II and III.

US$ 27.8 bn 147 projects **E&P no exterior

Petrochemical

Biofuel

= US$ 236.5 bn Distribution

980 projects

Corporate

*Includes budget already designated for projects under evaluation for RTM, G&E, Petrochemical, Distribution, Biofuels and Corporate

economic rationalization. “If the adjustments presented in the Business Plan are being made in favor of such rationalization, then the plan will have our full support,” Bueno says (he originally came from Petrobras and served as the president of its distribution arm BR Distribuidora). For Adriano Pires, director of the Brazilian Infrastructure Center (CBIE), the main positive point in the Petrobras plan for the 2012-2016 period is the fact that it is anchored in investment methodologies, in the search for operational efficiency and in more realistic production goals. “On the other hand, frustration at the lack of short-term

measures, such as alignment of domestic fuel prices with international ones and flexibility of content policies, made the plan poorly received by the market,” he argues. According to Pires, the new plan sets goals for 2016 that are more realistic than the previous one and everything indicates that projects will be more closely monitored, but nothing guarantees that the targets will be met. Even so, he believes that placing priority on investments in E&P and postponing those in refining demonstrate that economic rationality and the interests of shareholders have prevailed over political concerns. “It will be necessary to overcome a series of obstacles for the management of Petrobras to return to being more businesslike, with less political interference.

The two main challenges are for the company to be more autonomous to propose and carry out its fuel pricing policy and not let itself be used as an instrument of industrial policy, as regards local content”, he points out. The director believes that the new management is capable of overcoming these challenges, which will begin a new virtuous cycle, both for the SOE itself and for the O&G industry in Brazil.

Convergence of interests Pires noted that the fact that the plan was approved at the first meeting of the Board of Directors (contrary to the previous one, which required three meetings for final definition) indicates greater convergence of interests between the new management and the T&B Petroleum 33

special: BP 2012-2016

Investments in E&P - 2012-2016 US$ 131.6 bn

12%

US$ 16.3 bn

24%

69%

US$ 89.9 bn

Exploration US$ 25.4 bn

US$ 25.4 bn

19%

Pré-sal

US$ 25.4 bn

Pós-sal

68%

18%

US$ 16 bn

US$ 89.9 bn

49%

US$ 43.7 bn Production Development

Cessão Onerosa

Production Development 34%

US$ 89.9 bn

US$ 30.2 bn

Exploration Infrastructure and Support

federal government, marking a difference from the previous management, whose sequence of targets not met affected the SOE’s credibility. As regards the losses in the Supply segment due to current fuel prices, Pires believes that the situation will not get better before the end of 2014, as the next two refineries, the first phase of Comperj and Abreu e Lima (RNEST), will be focused on the production of diesel. His opinion is that without the introduction of gasoline refineries in the short term, the new management of Petrobras intends to resolve the losses on importation with the international price parity or more ethanol. The CBIE director pointed out that even with the possibility of reduction in investments by Petrobras, doubts remained 22

T&B Petroleum 33

*Not including International E&P investments

regarding the SOE’s capacity to finance itself without exceeding its leveraging limits, since major questions remain, hampering the company ’s cash-generating capacity, that are not being resolved. Insofar as the executive is concerned, the main question is the fuel pricing policy, which has been negatively affecting the SOE’s results for more than a year, inasmuch as there is a huge difference between its gas and diesel prices in relation to international prices. Pires indicated that the drop in the price of petroleum since April of this year has been offset by the influence of the Brazilian Real’s devaluation against the US Dollar, indicating that Petrobras will continue to import fuels at a loss and lose revenue on sale of derivatives.

“The rise of just 7.8% for gasoline and 3.9% for diesel oil was considered frustrating, since Petrobras based its plan on the international price parity, which would mean a readjustment of at least 15% for both fuels. Moreover, the hike was completely offset by cutting the rate of the fuel tax Cide (Contribution for Intervention in the Economic Domain) to zero, which means that future readjustments will affect pump prices and have political costs in terms of inflation”, he states. Paulo Valois, founding partner of law firm Schmit, Valois, Miranda, Ferreira & Agel Laws, says that in essence the new strategic plan of Petro-

Petrobras will invest US$ 236.5 billion by the year 2016

bras reduces its investments in refining and concentrates them in E&P, more specifically, in the sub-salt area, despite the uncertainties of the new regulatory framework approved by the Brazilian Congress. “The plan has the merit of revising certain economic parameters of the SOE’s other strategic plans, but even so involves uncertainties owing to the handling of the policy for pricing oil derivatives adopted by the federal government”, he argues. For Valois, at the outset the new strategic plan did not appear to be well received by certain sectors of the financial and stock markets, perhaps due to mistrust in relation to meeting targets, in view of past planning exercises.

Shipbuilding industry optimistic The President of the National Association of Ship Building, Repair and Offshore Industries

(Sinaval), Ariovaldo Rocha, commented that the industries his organization represents have maintained their expansion and that the announcement of the Petrobras Business Plan will increase by more than 11% the investments in E&P, which will rise from US$ 127.5 billion to US$141.8 billion for the five year period 2012-2016. According to Rocha, the increase in slated E&P investments means that the orders placed with the Brazilian shipbuilding industry will be maintained. “The offshore, oil rig and drill ship segment represents about 60% of the portfolio of orders for the nation‘s shipyards and with the agreements inked for construction of 35 drill

ships this share will increase,” he said. The President of the Brazilian Association of Shipbuilding and Offshore Companies (Abenav), Augusto Mendonça, stated that the new plan implemented by Petrobras is more realistic and tangible, correcting certain optimistic considerations made in the past and aiming at meeting targets. Mendonça pointed out that the Business Plan makes a clear defense of the local content policy by reaffirming the fact that it is possible to produce with high levels of domestic content, and even if there is a drop in production, this will not impact the picture for orders in the shipbuilding and offshore industry, which has not changed. “The

Stocks down and fuel prices up Right after announcement of the Business Plan for 2012-2016, Petrobras became the most devalued company on the world’s stock markets, being the fourth most “discounted” company among the 100 largest companies in the world, according to Bloomberg. It even trailed such companies as Japan’s NTT and Japan Tobacco and Russia’s Gazprom, companies known to have serious difficulties in their businesses. The term ‘devalued’ is understood as involving the ‘discount’ that investors ask on the price of the stock in relation to what the company declares is the worth of the combination of its assets – cash, buildings, oilrigs, reserves, contracts, trade receivables, etc. In the case of Petrobras, this ‘discount’ is 30% – which means that it is traded on the stock market at 70% of its equity value.

Petrobras President Maria das Graças Foster says that there is no exaggerated optimism in relation to the sub-salt layer. “There’s no excess optimism regarding the sub-salt layer. The shares of Petrobras are very much undervalued for a series of reason, so you do very well by buying our stock. Production of this oil is a matter of time. The sub-salt layer is a reality”, she stressed. According to the CEO, fuel prices need new adjustments over the course of the forthcoming years, in order for

Petrobras to be able to make the investments slated in the plan. “The hike in fuel prices that took effect at the refineries in June – gasoline went up 7.83% and diesel oil 3.94%, without effects at the pump – does not eliminate the entire extent to which prices charged in Brazil are out of line with the international market, but they do help the company to continue with its investment program. Foster points out that investments in the 2012-2016 Business Plan will be carried out counting on reduction in costs for achievement thereof, the price of oil, delays in projects, besides fuel prices. She commented further that it would be important to correct the degree to which local prices are out of line with international ones. Although such a hike is necessary, no date has been set for this to take place, and not even the percentage increase has been decided on. T&B Petroleum 33

special: BP 2012-2016

Post-Salt, Pre-Salt and Remunerated Assignment production curve Oil and LNG production Post-Salt

Piloto Sapinhoá

Cidade de São Paulo Piloto Lula NORDESTE

Cidade de Paraty Papa-Terra

Cidade de Anchieta

Total of 19 plataforms installed until 2016 and 38 more until 2020 Norte Parque Baleias

Franco 4 Lula ExtERNO Sul

P-58 Roncador IV

Lula Alto Lula Central

P-62 P-63

Baúna e Piracaba

Cidade de Itajaí

Lula Sul

Sapinhoá Norte

P-61 (TLWP) Roncador III

Franco 1 Carioca 1

Cidade de Ilhabela IracemA SUL

IracemA Norte

Lula Norte

Sul de Guará Júpiter

Maromba

Iara Horst

Carcará

Bonito

NE Tupi

Sul Parque Entorno das Baleias de Iara

Carimbé Aruanã Iara NW

Espadarte III Florim

4.200 mbpd

Franco 5 Espadarte I

Franco 3

Franco 2

Cidade de Mangaratiba

P-55

2.022 mbpd

2011

Assignment

Ilustration: TN Petróleo

Baleia Azul

Pre-Salt

2.500 mbpd

2012

2013

2014

2015

2016

2017

2018

2019

2020

Post-Salt, Pre-Salt and Remunerated Assignment and new discoveries Participation in the production curve 5%

Pre-salt (concession)

30%

Pre-salt (concession)

95%

69%

2011

2016

Post-salt

2.022 mbpd

12%

Remunerated Assignment

Post-salt

2.500 mbpd

New discoveries*

42%

19% Remunerated

Post-salt

Assignment

28%

Pre-salt (concession)

2020

4.200 mbpd

*Includes new opportunities in already discovered blocks

T&B Petroleum 33

Photo P-55: Petrobras Agency / João Paulo Ceglinski

Petrobras will invest US$ 236.5 billion by the year 2016

biggest highlight of this plan is the realistic and objective manner in which Petrobras presented it, together with the guarantee that it will continue to focus on local content and continue to make heavy investments in the industry”, he stated. As regards ‘domestic content’ in order for the industry to become competitive, Mendonça considers that this government policy should be accompanied by a series of actions, due to the magnitude of the investments slated. “We should consider cases of success by countries that took advantage of their reserves to develop their own industries, as in the case of the United Kingdom and Norway, and examples in which government support was decisive for creation of a competitive industry, as in the cases of Korea and Singapore”, he emphasized. To him, the greatest stumbling block for development of Petrobras’s business/projects

continues to be in the training of specialized manpower, mainly at the technical level. “The learning curve to form the required local content for international competiveness should be an ongoing challenge for the entire productive chain of our industry”, he concluded.

More confident machinery and equipment industry According to Alberto Machado Neto, executive O&G director for the Brazilian Association of Machinery and Equipment Industries (Abimaq), the current Petrobras plan transmits enhanced security as regards its application, chiefly when it calls for strict and ongoing monitoring of the curves for execution of projects, the so-called “physical and financial curves”

“The plan contains certain important advances, such as for example the fact – already demonstrated in certain projects – of tracking local content, separating goods and services, reducing a good part of the distortions confirmed earlier. It is also worth highlighting the concern with operations that, by decision of the Board of Directors, begin to be included in local content requirements, which previously were only applied to investments in new projects”, he pointed out. As far as Machado is concerned, the greatest highlight of this plan is the manner in which it is being conducted and involving the commitment of the entire Executive Committee, for the first time present in its entirety at the launch. “This signals integrated management of the company’s portfolio, according to strict criteria for performance and capital discipline, with more realistic goals T&B Petroleum 33

special: BP 2012-2016 and well-established priorities and featuring as one of its main pillars the Local Content Program. The latter is fundamental for the benefits of the oil industry to in fact revert in favor of Brazilian society as a whole, as regards creation of Jobs and local revenue,” he added. In the executive’s opinion, the current management of the SOE is adopting some directives that tend to improve the feasibility of carrying out the company’s projects. “The previous plans had a much more financial than technical vision. Once upon a time, then President Lula said that development of the sub-salt layer would be carried out at the speed that the industry could keep up with. Some points of the current plan are aimed at this objective and we should bet on this possibility”, he said. According to Machado, in order for the Brazilian capital goods industry to improve its competitiveness, besides systemic factors such as interest, taxes, exchange, etc., information on future demand, with a level of detail that can enhance the visibility of opportunities for the industry, is a factor of the utmost importance for the benefits of the industry ’s investments and operations return to society.

Pacific Mistral – South Korea; Schain Amazônia – China; Ocean Rig Mykonos – South Korea; Schahin Cerrado – China; Etesco Takatsugu J – South Korea; Deepsea Metro II – South Korea; Ocean Rig Corcovado – South Korea; ODN Delba III – Arab Emirates; Schahin Sertão – South Korea; ODN Tay IV – South Korea; Sevan Brasil – China; ODN I – South Korea; ODN II – South Korea; Amaralina Star – South Korea.

Etesco Takatsugu

Photos: Courtesy

Drill ships ordered overseas for water depths of more than 2,000 m

Sevan Brasil

Pacific Mistral

Deepsea Metro

Rigs contracted in Brazil* Sete Brasil (Estaleiro EAS): 7 Status: contracts signed; in negotiation with technological partner IHI Marine United Inc.(IHIMU) of Ishikawajima-Harima Heavy Industries Sete Brasil: 21 Status: public tender concluded; conducting audit in shipyards in order to sign contracts; forecast for approval of contracts: July/12, August/12 and September/12 Ocean Rig: 5 *33 new rigs to be delivered after 2016, with local content between 55% and 65%

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PETRÓLEO I GÁS I BIOCOMBUSTÍVEIS

Conteúdo local: fortalecendo a cadeia produtiva de óleo e gás

no Brasil, de Manuel Fernandes, sócio-líder da área de Óleo e Gás da KPMG no Brasile professor de International Accounting da FGV.

Fifteen years of the Petroleum Law: progress and outlook,

OIL I GAS I BIOFUELS

by Maria D’Assunção Costa, lawyer, Ph.D. in Energy from IEE/USP

Norway: a technological ocean crossing

Um rio de energia Maior investimento de Cingapura no Brasil

Ano XIV • set/out 2012 • Nº 85 • www.tnpetroleo.com.br

E&P: prioridade permanente Panorama do setor petróleo no Brasil, por Wagner Freire

opinion

Seismic surveys: tracking down the oil

Petroquímica quer crescer com o pré-sal

Edição especial

Rio Oil & Gas 2012 Preview: Three decades of international recognition

Year XIII • September 2012 • Issue 33 • www.tbpetroleum.com.br

Special: Petrobras Business Plan

PETROBRAS WILL INVEST

US$ 236.5 BILLION BY THE YEAR 2016

The current context of the Brazilian oil and gas industry,

Fontes de financiamento e incentivos para a cadeia de E&P no Brasil, por Paulo Buarque e Sérgio Caetano Leite

by Claudia Rabello

O contexto atual da indústria do petróleo no Brasil, por Claudia Rabello

by Antonio Bastos A. Sarmento

Special issue

Concession and sharing beyond semantics, Leads industry agenda for flare gas recovery,

Como o capital de projetos suporta a sustentabilidade, por David Dixon

by Bjørn Eiken Hartveit

Refino global: como manter a rentabilidade em tempos turbulentos, por José de Sá Supply Chain: mecanismos de financiamento à cadeia de suprimento da Petrobras, por Roberto Alfradique Vieira de Macedo Concessão ou partilha além da semântica, por Antonio Bastos A. Sarmento

Contact us: dagmar.brasilio@tnpetroleo.com.br • lfelipe@tnpetroleo.com.br 26 T&B Petroleum 33 Phone: +55 21 3221-7500 • Visit us at: www.tbpetroleum.com.br or www.tnpetroleo.com.br

Special interview:

Entrevista exclusiva

Francisco Itzaina, presidente da Rolls-Royce para América do Sul

Energia offshore a todo gás!

Francisco Itzaina, president of Rolls-Royce for South America

Full-speed ahead for offshore energy

T&B Petroleum 33

especial: special: seismic sísmica

Seismic sur tracking down the oil by Beatriz Cardoso and Rodrigo Miguez

With around a dozen ships authorized to acquire data on the sub-soil along the Brazilian coastline, and land seismic survey groups scattered from North to South, the centuryold technology – which helped discover the giant sub-salt layer fields in the Campos and Espírito Santo basins in the Southeast – continues to be the trusty retriever dog of oil companies operating here. Besides requiring new surveys, such companies are reprocessing data that is now up to four decades old... and with highly positive results. 28

T&B Petroleum 33

Photo: Courtesy Georadar

Photo: Courtesy CGG Veritas

Photo: Courtesy Schlumberger

Photo: Courtesy Geo RXT

Photo: Courtesy PGS

veys:

T&B Petroleum 33

special: seismic

The signals are not audible or even detected by common instruments. Even so, a veritable ‘pack’ of seismic equipment installed on vessels navigating the Brazilian coastline or set up inland at various locations, including in the heart of the Amazon jungle, has been ‘snooping‘ and pointing to potential O&G reserves in the nation’s sub-soil. At sea, such signals can be picked up from water depths of up to 2,000 m and 7,000 m deep into the soil of the ocean bed. Since 2000, a veritable wave of seismic studies has swept along the coast of Brazil, chiefly in big production areas such as the Campos Basin, offshore the seaboard of the State of Rio de Janeiro. The wave of studies has also included others in which seismic activities were already traditional, such as Camamu and Sergipe in the Northeast and Espírito Santo and Santos in the Southeast, until recently with only a little bit of production at Merluza, a field discovered at the time risk contracts were the modus operandi for doing oil and gas business in Brazil. In fact, this wave began forming in 1998, with the creation of what was then known as the National Petroleum Agency (ANP), which – ever keeping up with the times – later added to its name the words Natural Gas and Biofuels, and the end of the federal government’s monopoly that weighed so heavily on hydrocarbon E&P in Brazil. With the holding of auctions for exploratory blocks, seismic data acquisition activities also picked up steam on land. Since then, the discoveries have never stopped happening, indicating Brazil’s tremendous potential in terms of petroleum and natural gas, mineral riches 30

T&B Petroleum 33

General figures Sedimentary basins: 38 (of interest in terms of oil and natural gas: 29) Total extension: 7.5 million km2 Onshore: 5.0 million km2 Offshore: 2.5 million km2 Producing basins: 10 (Solimões, Ceará, Potiguar, Recôncavo, Sergipe-Alagoas, Camamu-Almada Bahia, Espírito Santo, Campos and Santos) Of Brazil’s total sedimentary basins, less than 5% have been leased out on a concession basins.

ANP – projects in progress: • Parnaíba Basin (aerial survey + two 2D seismic surveys + one geochemical survey); • São Francisco Basin (aerial survey + 2D seismic survey 2D + geochemical survey + Bafran); • Paraná Basin (= aerial survey + 2D seismic survey); • Parecis Basin (2D seismic survey + geochemical survey + MT); • Amazon Basin (aerial survey + 2D seismic survey + MT). that had not yet carried the same weight as others in the nation’s gross domestic product (GDP) and balance of trade, such as iron ore, bauxite, copper and ornamental rocks.

Decade of discoveries In the wake of these seismic surveys and increase in exploratory activities in Brazil, as well as technological advances and also data analysis processes, data acquired 20 or 30 years ago began to be reviewed, or better, reprocessed. It was thus that Brazil

entered into its decade of major discoveries, most of them in deep waters and even ultra-deep ones. Now the country is the most attractive O&G exploratory frontier on the entire planet. The first sign of this new era arose in the Santos Basin in 2003, when Petrobras announced the discovery of the field named Mexilhão, the largest natural gas reserve on the nation’s continental shelf, with about 70 billion m3 (equivalent to 30% of the consolidated reserves in that year, which amounted to 234 billion m3). The second, in the same basin, occurred in August of 2005, when Petrobras drilled down and found indications of hydrocarbons in a first well of the new exploratory frontier, located in block BM-S-10 (Paraty). The strongest signal, however, came in the following year, in July of 2006, when the O&G giant found a reserve of light oil in block BM-S-11, after drilling down through a layer of sale over 2 km thick at a water depth of 2,140 m. This was the discovery of the Brazilian sub-salt later, which extends from the northern coast of the State of Santa Catarina in the South (near the elevated spot known as Alto de Vitória) to the south of Espírito Santo (another spot known as Alto de Vitória). Even if the field, which became known as the Tupi field at the time (now it is called Lula), more than 250 km from the southern coast of the City of Rio de Janeiro, were a block isolated from other areas where Petrobras had made discoveries, it would still be worth its weight in gold on a stand-alone basis. With estimated volumes of 4 to 8 billion barrels of oil equivalent (BOE), Tupi led the government to remove 41 blocks adjacent to that field from the

Seismic surveys: tracking down the oil

ANP’s Multi-year Geological and Geophysical Plan (PPA) for 2007-2014 Investment per Basin:

(1) Acre/Madre de Deus: R$ 137.02 million; (2) Solimões: R$ 6.25 million; (3) Amazon: R$ 98.53 million; (4) Tacutu: R$ 54.52 million; (5) Alto Tapajós: 0; (6) Marajó: R$ 56 thousand; (7) Foz do Amazonas: R$ 20 thousand; (8) Pará-Maranhão: 0; (9) Barreirinhas: 0; (10) Pernambuco-Paraíba: R$ 33 thousand; (11) Jacuípe: R$ 31 thousand; (12) Cumuruxatiba: R$ 1.88 million; (13) Pelotas: R$ 1.23 million; (14) São Francisco: R$ 117.6 million; (15) São Luís-Bragança-Vizeu: R$ 111.6 million; (16) Parnaíba: R$ 158.81 million; (17) Jatobá/Tucano Norte: R$ 59 thousand; (18) Paraná: R$ 207.36 million; (19) Ceará (Piauí-Camocim, Acaraú and Icaraí): R$ 12.7 million; (20) Parecis: R$ 224.04 million; (21) Pantanal: 0; (22) Araripe: R$ 2.6 million; (23) Bananal: 0; (24) Irecê/Lençóis: 0; (25) Santos Sub-Salt: R$ 500 million.

Total: R$ 1.8 billion portfolio of the 9th Round, which had been set for November 28, 2007 by the National Petroleum, Natural Gas and Biofuels Agency (ANP).

Results in view The Santos Basin began to gain international renown, attracting the attention of international oil concerns and seismic data firms alike. New discoveries were quickly made in the area that has been named the sub- or pre-salt cluster, encompassing an agglomeration of blocks in the central region of the strip of almost 800 km of this layer. It was there that Petrobras and its partners recorded the highest rate of hits by an exploratory campaign in the nation’s history. The discovery of petroleum and natural gas in layers of rocks located below the salt layer was only possible thanks to the evolution in the acquisition of data, with more advanced technologies such as

3D and 4D seismic surveys – besides, of course, new techniques for drilling the seabed at water depths of more than 2 km. New surveys and reprocessing of data led the SOE, as well as other players operating here, to go deeper with their drilling, seeking out deeper and deeper scenarios, since seismic surveys had indicated that the sub-salt later literally passed underneath the post- or above-salt layer of the Campos Basin, which is responsible for over 80% of the nation’s O&G output. It was in this seismic tracking that Petrobras wound up discovering in the sub-salt layer the field of Caxaréu, in the Campos Basin, added later to the Parque das Baleias, an oil-bearing region that further encompasses the fields of Jubarte (from which the first oil extracted from the sub-salt layer was produced), Cachalote, Baleia Azul, Baleia Franca and Baleia Anã. Today it is estimated that

the total reserves of these seven fields are on the order of 1.2 billion barrels of oil in the above-salt layer and another 1.2 billion barrels in the sub-salt layer. The advent of the sub-salt layer – which in coming years can add to Brazil’s reserves between 13.1 and 14.6 billion BOE (potential recoverable from Lula, Cernambi, Iara, Guará and Parque das Baleias, added to the fields of Guará Sul, Tupi Sul e NE, Florim, Franco and the area surrounding Iara, assigned on an onerous basis) – is without the shadow of a doubt the result of a chain of technological and process advances, among them in the seismic area itself. The century-old technology (see box), used at first as a tactical weapon in war to indicate the position of enemy artillery, continues to play a strategic role. Yet this time it is used to indicate to oil companies all over the world locations of sedimentary basins in T&B Petroleum 33

special: seismic

Data acquisition vessels in operation on the Brazilian coast Vessel

company

basin

contract term

BOA GALATEA

EMGS

Foz do Amazonas, Pará-Maranhão, Barreirinhas, Ceará, Potiguar, Sergipe-Alagoas e Campos

12/20/2012

CGG SYMPHONY

CGG do Brasil

Santos, Campos e Espírito Santo

12/31/2012

DISCOVERER

GX Technology

Foz do Amazonas, Pará-Maranhão, 04/30/2012 Barreirinhas, Ceará, Potiguar, Pernambuco-Paraíba, Sergipe-Alagoas, Jacuípe, Camamu-Almada, Jequitinhonha, Cumuruxatiba, Mucuri, Espírito Santo, Campos, Santos e Pelotas

HAWK EXPLORER

Spectrum Geo

Brazilian coast

OCEAN EUROPE

RXT

Campos (Blocks: Marlim e Marlim 10/14/2013 Leste)

OCEANIC PHOENIX

CGG do Brasil

Santos, Campos e Espírito Santo

12/31/2012

POLAR EXPLORER

Spectrum Geo

Brazilian coast

01/26/2013

RAMFORM SOVEREIGN

PGS

Santos, Campos e Espírito Santo 10/08/2012 (Blocks: Tupi/Iracema, Tambaú/Uruguá e Tambuatá, Franco/Iara, Pirapitanga e Extensão Pirapitanga, Papa-Terra/Maromba e Caxaréu/Pirambu)

SANCO STAR

RXT

Campos (Blocks: Marlim e Marlim 04/30/2013 Leste)

VERITAS VIKING

CGG do Brasil

Santos, Campos e Espírito Santo

WESTERN MONARCH

Westerngeco

Santos, Campos e Espírito Santo 10/05/2012 (Blocks: Albacora, Roncador, Peroá, Cangoá e Complexo de Golfinho), Campos (Blocos: Barracuda, Caratinga, Marlim, Espadarte, Pampo, Badejo, Linguado, Ativo Norte e Viola)

WESTERN NEPTUNE

WesternGeco

Santos

09/09/2012

12/31/2012

07/11/2013

Source: DPC - Departamento de Portos e Costas, 03/19/2012

which there area possibilities of the existence of major petroleum and natural gas reserves.

Database The starting gun for the Brazilian O&G industry, which has been accelerating investments in the exploratory area – even if production development projects consume most of the funds –, heated up demand in the seismic survey area. And this was not just on the part of the oil companies. Since 2007, the ANP has already invested R$ 500 million in 32

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the acquisition of new geological and geophysical data in Brazilian basins, through its Multi-year Plan for Geological and Geophysical Studies (PPA), which is financed with funds from the nation’s Growth Acceleration Plan (PAC). In the end, the 300 thousand km² under concession through December 31, 2011 represent a little over 4% of the nation’s sedimentary basins. With earmarked funds of R$ 1.8 billion for the 2007-2014 period, the PPA is aimed at acquiring geological and geophysical data on 22 Brazilian sedimentary basins, above all in new

frontiers, to increase its knowledge of such areas. Ten projects have already been contracted and are underway (including one for reprocessing of old data), totaling roughly R$ 250 million in investments. The aim is to acquire data from the exploratory frontier basins, especially in the nation’s North. Studies conducted by the ANP have already produced quite positive results in the Parnaíba, Parecis, São Francisco and Acre basins. According to the ANP’s general director, Magda Chambriard, more than R$ 100 million has already

Seismic surveys: tracking down the oil

been invested in the Parnaíba Basin alone. And the Agency will continue to allocate resources to this region, in which commercial viability has already been declared at two gas fields leased in blocks auctioned off in 2007 (all blocks on offer in this area were successfully sold at auctions). The Parnaíba Basin will be the first basin to produce natural gas as the fruit of the funds invested by the Agency and by the concessionaire operators – as in the case of OGX, which made its biggest discovery in this region, in principle estimated at between 10 and 15 trillion cubic feet. The first two fields declared to be commercially viable in 2011, Gavião Azul and Gavião Real, have potential resources of 1.1 trillion cubic feet.

A new wave Even if not with the same impetus as at the beginning

of the new millennium, a new seismic wave has begun to swell. In recent years, the international geophysical firm CGGVeritas, which in 2011 commemorated its half century in Brazil and opened a Technology Center in Rio, has been carrying out successive campaigns in the Santos and Campos basins for acquisition of data in the sub-salt area. It is in this region that the firm’s track-record of success includes the mapping of the already-cited sub-salt cluster that concentrates the major discoveries of recent years that add up to as much as 15 billion BOE. The largest proprietary data processing center in Latin America is located in Brazil, the nation where so far CGGVeritas has already acquired and processed more than 120,000 Km2 of multi-client seismic data (information that is included in its database

Century-old technology Seismic surveying began to be used in the First World War as a tactical tool: German scientist Ludger Mintrop used portable seismographs designed especially to precisely locate the position of artillery fire. This was done by putting three seismographs at points of known coordinates, in front of enemy artillery, which made it possible, through triangulations, to establish their exact position in order to destroy them. Given the need to make corrections in such calculations, based on differences in the speed at which sound propagated on the surface, caused by local geological characteristics, Mintrop perceived that his method could be used in this area.

The patent for the method for seismic refraction profiling was filed for in 1919 by Mintrop. In April of 1921 he founded a company Seismos Gesellschaft, with which worked on prospecting for petroleum on the Gulf Coast and in Eastern Texas until 1925. In the U.S. in 1926 the Geophysical Research Corporation (GRC) began experimenting with seismic reflection. In 1931 the Petty Geophysical Engineering Company of San Antonio invented and implemented the reverse profile shooting method which was to become the industry standard. Also in the U.S. the first well was drilled with location defined on the basis of reflection seismic data: well 1Hallum in Pottawatomie County, Oklahoma, which was begun in 1928 by the U.S. company Amerada. Until the mid 1960’s, seismic prospecting was impacted by the limitation of electronic instruments and registe-

library). With its center located in Macaé, in the northern portion of the State of Rio de Janeiro, it is the only firm in the entire world to have a Dedicated Center for multi-component data and also the only one to also have a 4D Dedicated Center in the Americas, the latter being used exclusively by Petrobras. CGGVeritas is also the first firm to introduce into Brazil reverse time migration (RTM), which is the most advanced imaging technology on the market. The largest deep-water ocean project conducted in the world, 5,300 Km2 of high density (HD) data, was processed at its center in Rio de Janeiro. The latest acquisitions were recently concluded and will aid ANP in locating a new stratigraphic (column study) well to be drilled next year. Spec 3D seismic data (speculative data, as multi-client ring by analog means. With the digital revolution in reflection seismology, it gained more technological content, which has been undergoing constant evolution up to the present. The first 3D seismic experiments were carried out by Exxon Production Research in 1963. Seismographs have kept pace with electronic and data processing technology, and with each new generation that they gained more sensitivity, more channels and better techniques for filtering and registering signals. Moreover, the processing of seismic data has also made a giant leap with the digital revolution. With increasing capacity for revealing and identifying characteristics of reservoirs and fluids, seismic prospecting has also taken a prominent role in post-discovery stages and in the phase for delimitation of producing wells, as an essential tool for reservoir studies. It can be used throughout the entire life of a field in the management of reservoirs, chiefly in mature fields. T&B Petroleum 33

Photo: Courtesy CGG Veritas

special: seismic

projects are termed) were obtained to the south of blocks BM-S-21 (Caramba, operated by Petrobras) and BM-S-22 (Azulão, a consortium operated by Exxon) and area being processed by CGGVeritas. According to the ANP, the survey of the so-called Southern station of the cluster was concluded at the beginning of 2011, with the mapping of 18.6 mil km². The firm has also concluded the acquisition in the area surrounding Libra, conducted by Symphony, and is in the final stage of seismic data acquisition carried out by the ships Oceanic Phoenix and Veritas Viking in the area dividing the Santos and Campos basins, near the region known as Alto de Cabo Frio. At the beginning of 2012 CGGVeritas had three acquisition ships operating along the Brazilian coastline. “We are concluding the survey of 14 thousand square kilometers of spec 3D seismic data, using the most modern data acquisition technology, BroadSeisTM, which makes high quality imaging possible. 34

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It is a huge scale project, entirely in the sub-salt area”, notes Patrick Postal, general director of CGGVeritas in Brazil. “It’s the first acquisition of BroadSeis that we made in Brazil”, the executive commemorates, highlighting that the firm has tried to bring the world’s most leading edge technology to the country, where it has the biggest multi-client data base on Brazilian offshore basin (with over 120 mil Km2 of data acquired). “In seismic acquisition, there is an ongoing process of technological innovations, not just in terms of acquisition, but also of processing algorithms and new software for analyzing reservoirs, etc.” CGGVeritas, which constantly strives to stay up to date with its various licenses for acquisition of data from Brazil’s offshore basins, has several projects for 2D and 3D seismic acquisition underway. They will add even more information to its already vast multi-client database used by both the big oil companies and by the ANP. “In the sub-salt area we have acquired data in practically the entire region, both in the South and in the North, Northeast and Central areas,” Postal adds.

According to the executive, there are two types of difficulties in seismic acquisition in this region. The first is of an operational and logistic order, due to the huge distance of the survey area to the coast. Not to mention strong currents, winds, inclement weather, etc. And there are also the geophysical difficulties. “The deeper the water, the more difficult it is to obtain good images, chiefly below the salt layer. Hence we have brought an unprecedented solution to Brazil, BroadSeisTM, entirely developed at the firm here and which results in a high resolution image, since it brings together innovations throughout the entire chain, in terms of equipment, processing and acquisition at sea,” he explains. Postal points out that the firm also intends to increment the use of other data acquisition Technologies, such as wide-azimuth, and those related to permanent or semi-permanent monitoring of reservoirs, such as Optowave and Nodes. “One of the challenges in seismic technology still is the ongoing enhancement of the imaging”. According to Postal, the new E&P frontiers in Brazil, such as the equatorial margin, for example, have potential, owing to the lack of geophysical knowledge of such areas. “They are promising because seismic acquisition will increase our knowledge,” he adds, recalling that the firm has been active in virtually all the coastal basins. The ANP evaluates that the Brazilian equatorial margin has highly promising petroleum potential (for light and excellent quality oil, similar to Arab light), where numerous indications in sedimentary basins have already been obtained, such as in the Potiguar and Ceará basins (reinforced by discoveries off the Western

Seismic surveys: tracking down the oil

Coast of Africa and the along the seaboard of Guayana, Cayenne and Surinam). Postal believes that, besides the new frontiers, it is also worthwhile to revisit the basins of Espírito Santo and Campos, using new and more efficient tools. “They are areas that have a lot to gain with new technologies, both in terms of acquisition and processing,” he states. Such potential has already been confirmed by discoveries made in recent years in these mature production areas.

On the trail of gas in Parnaíba Seismic surveying is not just behind new discoveries in mature

production areas, but also in new frontier land regions, as in the case of the Parnaíba Basin in the south of the Northeastern state of Maranhão, which shot to fame after the Discovery of a huge natural gas reserve made in 2010 by OGX. Since it began its activities in this basin in 2009, with the carrying out of seismic surveys, OGX Maranhão (a company made up of OGX and MPX, both belonging to the EBX Group headed up by Eike Batista) has already drilled 10 wells in the eight blocks that encompass six municipalities (cities and townships). Among them are

Capinzal do Norte and Santo Antônio dos Lopes, where the fields of Gavião Azul and Gavião Real, respectively, are located. The forecast of OGX Maranhão is beginning to produce gas already this year, with expectations of reaching a total volume of 6 million m³ of natural gas per day. The gas will be processed at a gas treatment unit (UTG). In Santo Antônio dos Lopes, MPX has built a gas-fired thermoelectric power generation plant, called Usina Termelétrica (UTE) Parnaíba. With rated capacity of 3,722 MW of power, UTE Parnaíba will be the largest thermoelectric power generation

Seismic prospecting methods and types of surveys

Types of seismic prospecting 2D seismic prospecting – Two dimensional seismic surveys are generally used for regional reconnaissance or for detailed prospecting work. 2D seismic surveys seek out information at great depths to make it possible to map extensive areas. 3D seismic prospecting – Three dimensional seismic surveys produce spatially continuous results, with images of the external and internal geometry of oil-bearing reservoirs that reduce the uncer-

tainty in areas with complex structural geology. 3D seismic surveys make it possible to make more detailed analyses of accumulations of petroleum and gas. 4D seismic prospecting – Four dimensional seismic surveys are aimed

at understanding the reservoir, using 3D seismic prospecting work repeated over the course of time. Such surveying and data processing permits observation of changes in the Photo: Courtesy Geo RXT

Reflection – Time of the “echo” of the waves of the stimulations made on the surface (through explosions).

Photo: Courtesy PGS

Seismic prospecting is one of the methods most commonly used in the oil industry to analyze the formation of rocks and hence the existence of deposits of hydrocarbons. The seismic waves are generated artificially through explosions on the surface (through dynamite in the acquisition of land data and with the use of compressed air cannons at sea). Each one of these sources produces characteristic waves that propagate in the sub-soil and return to the surface through the phenomenon known as reflection, when they are captured by receivers – on land electro-magnetic geophones and at sea through piezoelectric hydrophones – which perform the function of transforming this disturbance (kinetic energy or pressure) into electric signals for subsequent processing. Investing the sub-soil through the seismic prospecting method involves three stages: acquiring data and then processing and interpreting it (according to physical and geological models). What is the difference between refraction seismic surveying and reflection seismic surveying? Refraction – Time that the waves take to cover a determined space.

movement of fluids of the reservoir as a result of production. Imaging is carried out using data from different seismic acquisitions, in order to study the behavior of the reservoir, identifying areas with hydrocarbons that may still be in the reservoir. Ocean bottom cable (COB) seismic prospecting – This type of seismic acquisition is more oriented to the production of oil. It is comprised of a set of geophones oriented vertically and hydrophones connected by electric wires and set at the bottom of the sea to Record and pass on the data to a seismic recording ship. T&B Petroleum 33

special: seismic

complex in Brazil. The first units will begin generating energy already in 2013. At present, the work on the plant is in the ground-leveling stage. At the same time, OGX is continuing with its exploratory, seismic survey and well-drilling activities, which should last for the coming 10 years, in the search for new deposits to confirm the potential announced in 2010 -between 10 and 15 trillion cubic feet of natural gas. OGX has already filed petitions with the Maranhão State Environmental Secretariat (Sema) for expansion of its 3D seismic data acquisition activities and inclusion of the municipalities of Buriti Bravo, Governador Luiz Rocha, Graça Aranha, Mirador, Presidente Dutra, Santa Filomena do Maranhão and Tuntum.

Northeast, Tocantins and a small part of the states of Pará (in the North) and Ceará and Bahia in the Northeast. Following hot on the trail behind OGX are Petrobras and BP – the latter, with the acquisition of the assets of the U.S. concern Devon Energy in 2011, became the SOE’s partner in the consortium formed with mining giant Vale, and bought leases at auctions for blocks BT-PN-2 (formerly PN-T-66) and BT-PN-3 (previously PN-T-86) also in the 9th Round. They are neighbors of the blocks leased by OGX in the Parnaíba Basin, which today is living with expectations of become a natural gas and oil province. The British concern is beginning its first Brazilian onshore campaign in partnership with Brazil’s Georadar, which is making the acquisition of 1,000 km of 2D seismic data in block BT-PN-2, which it operates. The campaign, which began in March of this year with the mobilization of teams and equipment and continued with seismic acquisition in April, will go on until the end of the year, reaching eight municipalities in the State of Maranhão

located in the area encompassed by this block. With six land seismic survey teams and services provided for several oil companies in this region, Georadar has also been contracted by Petrobras, operator and partner of the neighboring block BT-PN-3. The SOE has already filed for the preliminary and operating licenses and is merely awaiting the results of the licensing processes to begin 2D land seismic surveys and define the location for drilling a well, in order to evaluate potential oil and natural gas reservoirs in the region. Besides the oil companies, the ANP is also expanding its studies in this basin, in which it has already invested over R$ 100 million. At the beginning of the year, it signed an agreement involving R$ 62.4 million with Geokinetics for acquisition of 2D seismic data surveys of the Parnaíba Basin. The US firm will carry out the acquisition and processing of 42 thousand shooting points of bi-dimensional land reflection seismographic surveys, with acquisition of 10,500 associated gravimetric and magneto-metric acquisition stations.

Georadar receives R$ 143 million from the Brazilian Development Bank (BNDES)

license by Governor Simão Jatene to begin the project around Santarém. “The loan shows that Georadar has opened up space for itself and gained credibility at BNDES and is recognized for its results, services, activities and governance policies. Our portfolio of projects for 2012 is estimated at R$ 600 million, quite a significant amount”, believes Luiz Nagata, the company’s CFO. The contracts also reinforce our plans for working outside of Brazil too. “We are studying opportunities in Paraguay and Angola”, the executive states.

Activities heating up Ever since OGX’s discoveries, geological interest in this sedimentary basin has been on the rise. It dates from the Paleozoic Age and extends for an area measuring roughly 680 thousand km², distributed over the states of Maranhão and Piauí in the

The Brazilian National Economic and Social Development Bank (BNDES) has approved the transfer of R$ 143 million to the mining group Georadar, which specializes in onshore and offshore geophysical survey work, by means of the Program for Support of the Chain of Suppliers of Goods and Services related to the petroleum and gas industry (BNDES P&G). This is the biggest operation involving medium- and large-sized companies since the program was created in September of 2011. 36

T&B Petroleum 33

The amount to be invested in three projects in the North of Brazil, two run by the National Petroleum, Natural Gas and Biofuels Agency (ANP) and another by the consortium formed between Petrobras and Portugal’s Petrogal, denominated Espec, which is underway in the Amazon. The seismic studies for the ANP in Acre in the region of the municipality of Cruzeiro do Sul, began in the first half of 2012 and will be concluded by the end of this year. In Pará, Georadar was granted an environmental

Seismic surveys: tracking down the oil

Permanent seismic surveys Beginning with 2D, moving up to 3D and now reaching 4D, seismic data acquisition technology simply does not stop evolving. It has kept pace with the need of oil companies for increasingly more precise data so that their investments in prospecting are the most appropriate and advantageous possible.

eismic surveying is applied today in all stages of exploration and production, from prospecting and drilling of wells through the end of production of a field, playing a fundamental role as well in the recovery of mature reservoirs. One of the solutions that has been standing out as a strategic instrument for better management of offshore reservoirs, chiefly in mature fields, is permanent seismic surveys. Considered as the seismic survey of the future by specialists, this data acquisition model uses permanent sensors that analyze the reservoir periodically, interpret the data gathered and aim to expand the factor of recovery of hydrocarbons from the deposits. Permanent seismic surveys are valuable in evaluating plans for improved production, with the drilling of new wells and alterations in strategies for production and injection in the different layers of the reservoirs. Their strategic importance is in the fact that they make it possible, with the increase in the rate of recovery of oil on site, to extend the useful life of mature fields, with enormous potential due to their giant size and vast reserves. For an idea of how this works, in Brazil, of the five fields that

produce the most oil, four of them (Marlim Sul, Roncador, Marlim and Marlim Leste) have been produced for between 15 and 20 years. Just the so-called ‘Marlim complex’ has estimated reserves, at present recovery levels, of more than 13 billion BOE. Imagine what raising the recovery rates by five percentage points would mean! For the new fields the big advantage is that the system is set up right from the start-up of activities, providing ongoing information. With the interpretations generated by permanent seismic surveying, it is possible to make the field production project perform at optimal levels, with enhanced positioning of producing and injector wells, identification of the washed and residual oil areas, formation of gas covers and reactivation of fractures and faults. With almost 100% of the O&G fields in the North Sea in the phase of declining production, oil companies operating in the region are already using 4D seismic techniques to increase productivity and the recoverability factor of their assets. The practice has been adopted by all the oil companies operating in Norwegian waters, adding

from 1% to 5% to the current volume of oil reserves. According to of the Brazilian Geophysical Society (SBGf), the use of permanent seismic surveys is still timid in Brazil. As far as she is concerned, one of the most attractive factors in the use of the permanent systems is the fact that they assure production of the field on rational basis so as to extract the maximum petroleum with the lowest costs. “In Brazil, this technology is not yet being employed in as systematic a manner as in the North Sea fields. Even so, it is already being used and surely the trend is for growth in the use of this technique”, SBGf states.

Tool of excellence For Celso Magalhães, chairman of the board and officer for new business at the Georadar group, the growth in the use of permanent seismic surveys in the world is linked to the fact that oil fields under developed, as well as mature ones, respond well to the correct positioning of a production well. “Permanent monitoring will be one more tool for engineers to T&B Petroleum 33

Photo: Courtesy PGS

special: seismic

extract a greater quantity of data and, as a result, prolong to the maximum the life of reservoirs, increasing their recovery ratio and accelerating their production, with optimization of resources”, Magalhães states. His company has been using ocean bottom cable (OBC) technology, which besides being able to be used in the permanent monitoring of reservoirs, will be widely used in the acquisition of seismic data in deeper scenarios, such as in the sub-salt below the above-salt layer of the Campos Basin – or even on the other side of the ocean, on the West Coast of Africa. This technological innovation was introduced by the company in its strategy for expansion in deep waters – that is, offshore seismic surveys –, consolidated at the end of last year with the acquisition of RXT do Brasil, the subsidiary of Norway’s Reservoir Exploration Technology, which has been active in Brazil for nine years and specializes in acquiring maritime geophysical data with OBC. Headquartered in Rio de Janeiro and with plans to operate in South America, Angola and 38

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the Middle East, GeoRXT, as the offshore arm of the Georadar is called, recently signed a contract with Petrobras to perform OBC 4C seismic surveying work in the Campos Basin. The campaign, which began in March, will be carried out with the support of two of the company’s seismic ships, Ocean Europe and Sanco Star, specifically developed for work with this technology. According to Magalhães, in 2013 the company should have one more OBC team with equipment to handle even deeper waters. Georadar further intends to have modular teams, which are more practical and cheaper, capable of allowing it to increase the use of this technology in shallow water carbonate reservoirs, which have tremendous prospects in Brazil and Africa and where the new technology should be one of the mapping solutions.

Tests on the Brazilian coast In the view of the E&P division of Petrobras, the use of permanent seismic surveys in the production phase can be extremely advantageous for mo-

nitoring work, with the mapping of the movement of saturating fluids (gas, oil and water), in the modifications of poor pressure of reservoirs and geo-mechanical conditions of encasing rocks. Today the SOE is concluding the testing phase of the seismic system in the Jubarte field, slated for implementation this September. The first campaign for seismic recording should begin right after installation in October and, for the years ahead, Petrobras will conduct annual seismic campaigns in the region. According to Petrobras, technical and economic feasibility studies have already begun for installation of permanent seismic systems in other fields where the SOE serves as the operator. Furthermore, in fields where Petrobras is a partner with other companies, there are also studies in progress, such as the Parque das Conchas field, which is operated by Shell, with plans for installation in 2013. As informed by its E&P division, Petrobras is executing 2D and 3D type onshore seismic prospecting in the Amazon Basin and 3D surveys in the Recôncavo Basin. Offshore that is the acquisition of 2D data in the Equatorial Margin and Pelotas basins, besides 3D and 4D seismic surveys in the Campos and Santos basins. For CGGVeritas, this is a super-attractive market, since besides the expertise consolidated in seismic acquisition in Brazilian basins, the firm has all the Technologies available, since its subsidiary Sercel is one of the major suppliers of this ocean bottom seismic equipment. “We have major expectations in relation to permanent seismic survey work, since we have

leading edge technology available both in terms of acquisition (with fiber optic technology) and in the processing of 4D seismic data”, observes Patrick Postal, director of CGGVeritas in Brazil. Since it is capital-intensive technology, Postal believes in the use of this tool for complex scenarios, such as the Marlim and Roncador fields, for example – with gigantic reserves.

New technologies One company that is investing heavily in technology is Petroleum Geo-Services (PGS), which has the largest private seismic data processing center in all of South America, oriented to conventional or dual sensor data. Inaugurated in 2004, the Center today has technology that is 10 times more advanced and at the end of last year concluded phase 5 of expansion of the center with a multi-million hardware updating. Moreover, this Norwegian company is creating a center of excellence in the area of reservoir monitoring services, based in Rio de Janeiro, providing support for all countries in the world. “We brought to Brazil an impressive set of Technologies, such as the PGS HyperBeam™ PSDM, which is a system that builds models for velocity and imaging at great depths, fully integrated with our 3D holoSeis™ visualization system”, states Stephane Dezaunay, director of PGS do Brasil. Last year the company introduced into the country the GeoStreamer data processing technology. Among the main benefits are the elimination of

Photo: Petrobras Agency

Seismic surveys: tracking down the oil

ghosts in the receiver, widening of the expanded band frequency, along with others. PGS also began its first multi-azimuth acquisition, which combines GeoStreamer and conventional data. And this year it will be carrying out the first world 4D processing based on data obtained from the installation for permanent monitoring in deep waters. PGS has been using the Ramform ship to acquire high definition data using a cable tugged with a dual sensor, through Geostreamer, completely compatible with 4D seismic surveying, which is appropriate for studying and monitoring reservoirs, even more so for sub-salt areas. Operationally speaking, it is the most efficient solution in more adverse conditions at sea, since it permits tugging the cable at greater depths without hindering the band of frequencies. “The permanent system is the 4D solution that PGS will install this year in Brazil. In recent times, most of our surveys have been 4D. This shows our commitment to – and our bet on – this technology,” states PGS’s Dezaunay. Another Norwegian concern, Octio Geophysical, decided to introduce on the Brazilian market is 4D/4C permanent reservoir monitoring technology after successfully completing tests for classifying the 4D/4C monito-

ring system installed at a field on the West coast of Norway, after two and a half years under development. The system has been designed to operate for 25 years and can be employed in offshore fields of more than 2,000 m below the sea level. It is equipped with several types of integrated digital sensors, such as electromagnetic, environmental and pollution monitors, and it is further prepared to even monitor CO² storage.

Strong R&D To monitor regions that get deeper and deeper and bringing in results that area increasingly more complete, the researchers at the Leopoldo Miguez de Mello Research Center (Cenpes), the R&D arm of Petrobras, have developed at the Rock Physics Laboratory work oriented to permanent seismic surveying, together with technicians from the company’s E&P division. One of the solutions is the permanent system with fiber optic sensors at Jubarte. Another example is the SeisMovieTM system, which involves a technique for monitoring the movement of fluids in a reservoir, based on the variation in measurements of electrical properties conducted over the course of the observation time. It was developed by CGGVeritas (which owns the patent for the SeisMovieTM system together with the French T&B Petroleum 33

Photo: Petrobras Agency

special: seismic

Petroleum Institute and GDF-Suez) and used in the onshore field Miranga in the Recôncavo basin in Bahia. Cenpes has been working on projects related to improving the quality of the seismic data of Petrobras, both through exclusive studies (internally at Cenpes) and also through partnership with seismic service companies, aimed at enhancing the planning seismic data acquisition and the processing thereof. At the Rock Physics Lab, the basic instrumentation consists of an apparatus that permits the measurement of various parameters in rock samples, such as the speed of transmission of acoustic and electrical impulses, horizontal/vertical anisotropy and the variation of such parameters under different conditions of saturation of fluids (water, oil, gas), of temperature and of confining pressure.

Many areas of Brazilian offshore and onshore sedimentary basins have insufficient and very old data, such that there is a need to undertake campaigns to acquire new geophysical data, both seismic and non-seismic, to enrich our geological knowledge, the SBGf states. However, the entity communicates that work has been undertaken in Brazil to develop data acquisition techniques with dense spatial sampling and tremendous variation in azimuth, coupled with techniques for migration of seismic data in depth that has provided a better imaging of geological layers in the sub-surface, in the sub-salt reservoirs. For Octio Geophysical, permanent seismic surveying is the great technological leap forward in monitoring O&G reservoirs due to its tremendous utility, such as analysis of data in real time, which makes seismic surveying a highly important component in the DOF (Digital Oil Field) the technologies of which until today have been focused on drilling and producing from wells. To overcome the challenges of the search for new oil-bearing regions in Brazil, the evolution of seismic data acquisition technology has proven to be increasingly important to guarantee a prosperous and peaceful future for the Brazilian O&G industry.

Besides the reproduction of parameters that are representative of the original conditions of the deposit, sampled at the time of its discovery, at the lab simulations are conducted of parameters to which the reservoirs will be submitted over the course of its production history, with a view to estimating the potential for permanent seismic monitoring of the accumulation. According to the Brazilian Geophysical Society (SBGf), the country is in a satisfactory state insofar as the R&D sector is concerned thanks to the resources provided by Law resulting from special participation in oil fields paid by the exploratory companies, which have been invested in projects in partnerships with Brazilian educational and research institutions.

Challenges Further according to the SBGf, Brazil’s onshore fields have a substantial quantity of basins on the exploratory frontier with O&G potential that has not been properly evaluated. Also, one of the challenges is the need to develop technologies and methodologies for acquisition and processing of geophysical data with better quality, making it possible to arrive at more reliable interpretations of areas with low geophysical response, such as the Paraná basin, for instance.

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opinião

PETRÓLEO I GÁS I BIOCOMBUSTÍVEIS

Conteúdo local: fortalecendo a cadeia produtiva de óleo e gás

no Brasil, de Manuel Fernandes, sócio-líder da área de Óleo e Gás da KPMG no Brasile professor de International Accounting da FGV.

Fifteen years of the Petroleum Law: progress and outlook,

OIL I GAS I BIOFUELS

by Maria D’Assunção Costa, lawyer, Ph.D. in Energy from IEE/USP

Norway: a technological ocean crossing

Um rio de energia Maior investimento de Cingapura no Brasil

Ano XIV • set/out 2012 • Nº 85 • www.tnpetroleo.com.br

E&P: prioridade permanente Panorama do setor petróleo no Brasil, por Wagner Freire

opinion

Seismic surveys: tracking down the oil

Petroquímica quer crescer com o pré-sal

Edição especial

Rio Oil & Gas 2012 Preview: Three decades of international recognition

Year XIII • September 2012 • Issue 33 • www.tbpetroleum.com.br

Special: Petrobras Business Plan

PETROBRAS WILL INVEST

US$ 236.5 BILLION BY THE YEAR 2016

The current context of the Brazilian oil and gas industry,

Fontes de financiamento e incentivos para a cadeia de E&P no Brasil, por Paulo Buarque e Sérgio Caetano Leite

by Claudia Rabello

O contexto atual da indústria do petróleo no Brasil, por Claudia Rabello

by Antonio Bastos A. Sarmento

Special issue

Concession and sharing beyond semantics, Leads industry agenda for flare gas recovery,

Como o capital de projetos suporta a sustentabilidade, por David Dixon

by Bjørn Eiken Hartveit

Contact us: dagmar.brasilio@tnpetroleo.com.br • lfelipe@tnpetroleo.com.br 40 T&B Petroleum 33 Phone: +55 21 3221-7500 • Visit us at: www.tbpetroleum.com.br or www.tnpetroleo.com.br

Special interview:

Entrevista exclusiva

Francisco Itzaina, presidente da Rolls-Royce para América do Sul

Energia offshore a todo gás!

Francisco Itzaina, president of Rolls-Royce for South America

Full-speed ahead for offshore energy

T&B Petroleum 33

special: norway

Norway:

a technological ocean crossing

From codfish to petroleum, Norway has incisively increased its presence in the Brazilian market, always with its eyes turned to the sea. In the most authentic Viking style, Norwegian industry has begun an Atlantic Ocean crossing that is unprecedented in its history: from the chilly waters of the North Sea to the tropical coast of Brazil in the South Atlantic, bringing on board investments and technological solutions to overcome a new challenge â&#x20AC;&#x201C; the conquest of the Brazilian offshore market. by Beatriz Cardoso

he announcement made by Aker Solutions at the end of June to invest US$Â 100 million in a new Brazilian service unit exclusively oriented to the drilling equipment business is not an isolated action on the part of Norwegian industry in Brazilian territory. Far from it: today, no less than around 150 companies from

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Foto: Divulgação

Capital: Oslo Area: 385,155 km² Population: 5 million Density: 12 inhabitants per km² GDP: US$ 280 billion Annual Per Capita Income: US$ 59.3 thousand HDI (2011): 0.943 Literacy Rate: 99.0% Currency: Norwegian Crown Official Website: www.regjeringen.no

Main Industries: petroleum and natural gas, food processing, shipbuilding, wood and pulp products, metals, chemical products, timber, mining, textiles, fishing.

which involves everything from promoting economic and commercial missions to key countries for Norwegian industry to the hammering out of conventions and agreements for technical cooperation, research and development. Such missions include annual calls by Norwegian journalists and companies to show the solutions Norway has to offer the Brazilian market, and in which TN Petróleo has participated since 2010. This set of actions has been continuously reinforced in Brazil, considered strategic for the Norwegian government. The Brazilian office (which handles all of Latin America) has been one of the most active in the world in recent years, on account of the rising interest in oil E&P activities and the shipbuilding industry as a whole. The best proof of this is the growing number of companies that have begun to develop local activities since the creation of Innovation Norway. Keeping this two-way crossing – since besides journalists, young professionals are increasingly seeking out traineeships at companies in Norway – and strengthening the ties between the two markets, so as to establish a safe route for Norwegian companies to adventure in the Southern Hemisphere, are among the challenges of the new director of Innovation Norway Brazil, Helle Moen. It’s a challenge she views with pleasure. “I am enchanted and honored to assume this position. Enchanted by the fact that Brazil has become one of the most interesting markets in the world, due to the strong growth it has shown. And honored, both by the experience and competence I see in the O&G industry in general, and by the excellent team with which I will be 44

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Aker Solutions plant in Rio das Ostras, Rio de Janeiro working in the years ahead”, the director explains. Moen is backed by the experience acquired in the Brazilian market: in 2007, she was part of the group that set up in Brazil (and later served as chairman of) the local arm of Marintek, a Norwegian firm specializing in R&D and advanced technical consulting in the area of naval, oceanic and materials engineering. Marintek is a part of the powerful Sintef concern, one of the largest research groups in Scandinavia, active in several segments. The agency’s new director is convinced that cooperation between Brazil and Norway will continue in a positive manner, both in business and in technological development. “Provided that such cooperation benefits companies of both countries,” Helle emphasizes. “I expect the technological partnership (heads of agreement) with Petrobras to produce interesting results. But I would like to see more Norwegian companies participating in local R&D initiatives, in cooperation both with universities and with Brazilian and international research institutions, as well as available financing,” she points out. As regards the installation of new manufacturing units in Brazil,

based on domestic content requirements, Helle Moen remembers that most major Norwegian O&G companies are already set up in Brazil, generating a substantial volume of business. This is the case of Aker and innumerable others, including international groups with business units headquartered in Norway, as is the case of the famed British concern Rolls-Royce, and the U.S.’s FMC, as well as others that act in close harmony with their Brazilian subsidiaries. Overseas expansion Present in Brazil for more than four decades, Aker Solutions is an example of how Norwegian companies know how to take advantage of the opportunities – backed up by the expertise consolidated in their home country – to gaining a major foothold and perform outstandingly in the Brazilian petroleum scenario. It was just 17 years ago (in 1995) that Aker began producing at its plant in Curitiba (PR) underwater equipment for the O&G industry. Its first wet Christmas tree was delivered in 1997. Since then it has not stopped growing, to the point of doubling its volume of business in 2008. From then until now it has increased its local production capacity, created a unit in Rio de Janeiro

Foto: Divulgação

special: norway

and another in Rio das Ostras, in the northern part of the State of Rio, near the Campos basin. At the latter facility there are two drilling simulators operating to provide specialized training for drill ship crews, so as to reinforce the safety and efficiency of offshore operations. Now, Aker announces installation of yet another unit, in the neighboring city of Macaé: its huge size of 335,000 m² makes it almost eight times larger than the Rio das Ostras unit, and it will have a covered area of 20.000 m², which will facilitate both the manufacture and assembly of equipment and the storage and movement of heavy loads, as well as testing and pre-commissioning activities. Besides production, assembly and testing of drilling equipment, drilling risers will also be manufactured at the new installation. When the new unit is ready, the one at Rio das Ostras will become fully dedicated to the Subsea division. With this, Aker is making a decisive step not only to meet the local content requirements of the program for building drill ships in Brazil, but also to step out ahead of the competition to handle the demand for specialized services that such equipment will give rise to when it is in operation. “The investments we have made in Brazil demonstrate our ambitions to grow in one of the most stimulating offshore markets in the world and our commitment to contribute to and develop the O&G industry here. The commitment on the part of Aker Solutions to domestic content in Brazil is total,” guarantees Luis Araujo, president of Aker Solutions in Brazil. The new unit will further house an advanced training center, with capacity for up to four latest generation drilling simulators made by Aker Solutions. Aligned with the expectations of Innovation Norway, Aker Solu-

Foto: Divulgação

Norway: a technological ocean crossing

Framo´s subsea pumps

tions has also reinforced its activities in the area of research and development in the O&G industry by signing a partnership with the Paraná Federal Technological Center (UTFPR). This collaboration between private initiative and a public university focuses on three fronts: technological development, specific training for a technical career path at Aker Solutions and the partnership in the scientific initiation programs at the Master’s and PhD levels. “The interaction between our company and the academic sector fosters an environment for production of knowledge and development both for the region and for the entire country, creates jobs, generates income and trains local manpower,” observes Luis Araujo. “Moreover, we are an innovative company and we want to be attuned in advance to the needs of our customers.” UTFPR is the first university in the State of Paraná to form a partnership with an O&G company, having obtained certification from the Brazilian National Petroleum, Natural Gas and Bio-Fuels Agency (ANP). Underwater equipment It is in the segment of underwater equipment and services

that several Norwegian companies have most been expanding their business in Brazil, as in the case of the group known as Framo (Frank Mohn). On the seabed off the Brazilian coast there are innumerable items of underwater equipment made by this Norwegian concern, a manufacturer of subsea pumping systems. At the end of this past year the firm was recognized by Petrobras as one of its best suppliers of goods and services. The local subsidiary, Frank Mohn do Brasil, has in its service portfolio about 700 pumps working offshore, besides 34 pieces of equipment for recovering oil from the sea using the Framo TransRec System. It is also responsible for handling pumping equipment (used in water injection, separation of oil and water and other activities) for Framo in Brazil and in South America. In February of this year, the company announced that it had received the definitive title deed to an area measuring 21.7 thousand m² located in the Guaxindiba district of the City of São Gonçalo, next to the highway that will link the city’s future port to the installations of the Rio de Janeiro Petrochemical Complex (Comperj) in Itaboraí. The site will house a modern service unit, with workshops for maintenance and technical assistance for equipment, and an operational training center to boot, T&B Petroleum 33

special: norway

Skandi Iguaçu, built in STX OSV, in Niterói, for DOF CBO Pacífico, built in Aliança Shipyard, in Niterói

Foto: Divulgação

in partnerships even with research institutions in Norway, have many opportunities for applications in offshore Brazilian fields,” states the enthusiastic Argus project manager Jan Bryn.

as well as a spare parts warehouse to ensure maintenance of the Framo equipment in operation in the Latin American area. Submerged in the Campos basin are numerous Framo pump systems at such gigantic installations as the ones at the Barracuda and Marlim oil and gas fields, among others. Among the systems involving a Framo set-up is the multiphase pumping system for the SSAO, which is underwater equipment for separation of petroleum, water and gas developed by FMC and Petrobras, which will boost the productivity of the Marlim field. “This marks a new era. We are confident of the success of this new technology”, states Jon 46

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Arve Svaeren, Framo’s commercial director. Yet another Norwegian firm seeking to become a bigger player in the Brazilian market is Argus Remote System, which wants to bring to South Atlantic waters its famed remotely operated vehicles (ROV) that will play a crucial role in both the control and maintenance of deepwater subsea equipment, in the projects for development of the Brazilian preand post-salt layers. “We believe that our machines, which have been perfected

Promising waters Owner of the 5th largest ocean-going fleet in the world and highly active in the maritime support sector, Norway has also been advancing in Brazilian waters, where Norwegian companies retain 25% of the vessels that service O&G rigs, the main client being Petrobras. Norwegian firms are involved all the way from vessel design and project to fleet operation. Such is the case with the concern Ulstein, which has expanded its activities in Brazil through Ulstein Marine Services (UMS). UMS offers Brazilian ship owners software for management of fleet and control over management of energy, safety and risk – cutting fuel expenditures, improving cost controls and reducing the time vessels stay out of service. Yet it is in the shipbuilding area that UMS has been obtaining greater visibility, since it is internationally recognized for its innovations in design, mainly in development of a new type of stem. Called the X-BOW, this stem is inverted, such that the ship has greater stability in heavy seas, cutting through waves better and losing less speed. The hull extends all the way to the bridge, forming a gigantic forecastle: with the better hydrodynamics provided by the hull, energy consumption is much less. The Norwegian design was chosen by CBO (Companhia Brasileira de Offshore) – and highly approved by Petrobras – for no less than platform support vessels (PSVs) to supply high-sea produc-

Norway: a technological ocean crossing

tion rigs. The contracts inked with Ulstein include deliveries of the Project, equipment engineering and commissioning. So far, two of the six ships ordered have been delivered by local shipyard Estaleiro Aliança to CBO: the CBO Atlântico and the CBO Pacífico, which have 8-year agreements with Petrobras. The other four, with the same contractual term, are somewhat larger X-Bow vessels. “The finish and quality of these vessels are impeccable. And the cooperation that we have had over the course of these projects, with CBO as the owner and Aliança as the shipyard have been excellent”, states Ingar Kaldhol of Ulstein Design & Solutions. The vessels are coming off the “production line” in swift order: the first, CBO Atlântico, was delivered at the end of November last year, the second in May of this year. Ordered between 2010 and 2011, the six vessels scheduled for delivery by the end of 2013 are

intended to meet the demands of CBO for working in the most severe offshore conditions. To this end, the ships have been adapted to increasingly complex operations and introduce new technologies that make it possible to achieve greater operating quality, efficiency and safety, aiding as well in preserving marine environments. Designed for efficient and flexible hauling and bulk and general cargoes for offshore installations, this Norwegian designed fleet has a hybrid system that permits offloading of drill cuttings from subsea soils. The ships are also endowed with a diesel-electric thrust system that provides greater flexibility in the use of the set of engines, mainly in applications requiring many maneuvers. It is also in the promising O&G industry waters that the plans of the DOF ASA group are navigating. DOF ASA is the parent company of Norskan Offshore and DOF Subsea, which have been strengthening their position in the Brazilian

market. In April, it christened the largest tugboat ever built in Brazil, the Skandi Iguaçu, with rated capacity of 32,000 BHP and bollard pull of over 300 metric tons. Built at the STX OSV shipyard in Niterói (RJ), with financing from the Brazilian Merchant Marine Fund (FMM) through Development Bank BNDES, the vessel was delivered to Petrobras 5 months before the due date – a situation quite different from other projects Petrobras is involved in: its operations and targets were impacted by delays both by domestic and international suppliers (as in the case of the drill ships). “Of the 64 company ships operating throughout the world, 24 are on or off the coast of Brazil and half the fleet carries the Brazilian flag,” declared Eirik Torressen, local country manager for the DOF group, which has been in Brazil since 2001 and boasts Petrobras, Statoil, Shell, Chevron and OGX among its major customers.

Renewable energy It is not just in the area of petroleum that Norwegian industry seeks to stake out a firm position in Brazil. In the first quarter of 2012, SN Power acquired a 40.65% stake in the capital stock of Desenvix Renováveis S/A, a company of the Engevix Group that focuses on power generation through renewable sources. SN Power is a joint venture between Statkraft (the biggest electric power generator in Norway and the biggest in Europe in terms of renewable sources of energy) and Norfund (a capital fund controlled by the Norwegian government), the new shareholder has injected R$ 725.1 million in the Brazilian firm, which continues under the control of Jackson Empreendimentos Ltda., the holding company of the Engevix Group, with 40.65% of the capital, and further features the stake of Fundação dos

Economiários Federais (Funcef), with 18.70%. “With the stake of SN Power, Desenvix intends by 2018 to get to the mark of 1,000 MW of rated capacity in renewable sources of energy in Brazil”, states José Antunes Sobrinho, CEO of Desenvix, which is already either operating or building units for generating 342 MW of electric power by means of renewable resources, such as wind, biomass, PCHs and hydroelectric power plants. The Norwegian partner has no less than 15,478 MW of rated capacity already in operation, with plants humming in Northern Europe (Sweden, England, Germany and Norway itself) and presence as well in South American and Asian nations to boot. The director of Innovation Norway Brasil, Helle Moen, sees this entrance of her nation’s companies in other

segments of the energy industry. “Naturally, the principal focus of cooperation has been in the O&G and shipbuilding industries. Nevertheless, the renewable energy and clean technology industries have been growing by leaps and bounds and taking interesting paths, creating opportunities that should be explored in greater depth,” she stresses. “In recent years, I have worked with clean technology and renewable energy companies and I hope to be able to contribute to strengthen the ties in these sectors as well”, concludes the director. T&B Petroleum 33

Foto: Divulgação

special: norway

Leading edge technology The offshore industry is the focus of not just companies belonging to the Norwegian shipbuilding sector, but also technology and service firms, all the way from environmental monitoring to professional training and qualification for offshore activities.

n the area of technology, Marine Cybernetics, a company founded in 2002 that was incubated at the Norwegian University of Science and Technology (NTNU), is making available to the Brazilian market the HIL (Hardware-In-the-Loop) test of systems for control by an independent company. The solution developed by Marine Cybernetics makes it possible to conduct the test based on connection of the control system to an HIL simulator. “The objective of the HIL test is checking on the control system with focus on the functionalities 48

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of the software and capacity to treat flaws. The acceptance criteria are defined by governmental norms and rules, as well as those of regulatory associations, and also by the specifications of the customer and supplier, not to mention the objectives for use of the vessel,” explains Stein Eggan, CEO of Marine Cybernetics. In other words, testing the functioning of the software programs that are an integral part of the system for automating and controlling vessels that today undertake increasingly complex operations. In the end, the software is a fundamental element

of automated systems that control a vessel’s critical functions and its safety. It happens that frequently such systems combine hardware and software from different suppliers, which should function as an integrated system to guarantee excellence in safety, reliability and performance. To have an idea of such complexity, suffice it to recall that a latest generation dynamic positioning (DP) system includes positioning reference sensors and systems, DP computational system, energy management system (SGE), remote and manual control propulsion systems, as

Norway: a technological ocean crossing

well as all the auxiliary systems for electrical, mechanical and hydraulic energy – lubrication, cooling, ventilation and fuel. “Hence the importance of the HIL being conducted by a term that is independent in terms of technology, organization, management and ability with respect to the shipyard, vessel owner and control system supplier. It is responsible for developing and preparing the HIL similar, writing the test program, conducting the tests and documenting the results”, points out Jan Lomholdt, general manager of Cybernetics no Brasil. “Although the testing, checking and classifying of mechanical structures and systems by outsourced firms is a time-honored practice in the shipbuilding and offshore industry, this does not occur on the same scale for computer control systems”, he emphasizes. “It’s a paradox that vessel systems are put into operation without independent tests, even though they have functionalities related to detecting critical safety flaws – and which may be difficult or dangerous to test on board the vessel and thus they are not adequately tested until put into an emergency situation”, Lomholdt concludes.

Ongoing training With a target of zero accidents, greater operational efficiency and less environmental impact, the shipbuilding and offshore industry has invested heavily in ongoing qualification and training of human resources, which are become increasingly

rare – owing to demand that is outstretching supply of professionals in various segments. And this applies to any offshore market around the world: from the North Sea to the Brazilian cost, the Gulf of Mexico to the West Coast of Africa … and so on and so forth. Consolidation of a strong industry such as the Norwegian petroleum industry is backed up as well by high investments in professional qualification, with intensive use of IT. It was thus that a pool of companies – among them Det Norske Veritas (DNV), Teekay Norway, Statoil and Kongsberg Maritime –, associated with professional entities in the maritime and shipbuilding areas and government agencies structured the Ship Modeling & Simulation Centre (SMSC), which is a mega center capable of developing the most modern offshore training tools. The SMSC was created in 1980 and over the course of more than three decades it has developed expertise in the generation of realistic mathematical models that make it possible to conduct detailed simulation of highly risky maritime operations. Such operations involve oil PSVs (platform support vessels), dynamic positioning relief ships, and derrick maneuvers in offshore units, both to lift cargo and transport passengers in very severe scenarios, including Arctic environments with waters covered by ice. “We have a permanent staff of engineers, Navy officials, DP and derrick operators who provide a unique experience by combining theory and practice in a virtual environment,” highlights Stig-Einar Wiggen, director of the SMSC. According to him,

the success of the SMSC model is proven by the innumerable training centers that have been created in Norway and other countries (including by Brazilian companies in Brazil, as in the case of Aker), that follow the same concept. One of the tools with the greatest impact developed by the SMSC is the Dynamic Positioning Competence Assurance and Practice (DP CAP™), a program that makes it possible for operators of DP systems on vessels (ships and floating platforms) to train under actual conditions on the work site – that is to say, where they are. This solution has been installed in various O&G industry vessels, including among them those operating near the Brazilian coast. With focus on safety, in October of 2011 Southern Marine inaugurated an office in Brazil, a country where it has been operating for at least 10 years. The company, which was created in 1979, now has a Brazilian base to make its onshore and offshore expertise available. Among other products and services, Southern Marine supplies anchorage systems, inspects ships and rigs and plans heavy-lift operations. “Our principal focus is safety on the high seas. For more than 10 years we have supported Brazilian ship owners with our experience”, notes Kjetil Hansen, General Director of Southern Marine. “We are very interested in expanding our business in Brazil even further. We are finalizing negotiations with important international players to be their representatives here. The opening of the office gets us closer to our customers”, he concludes. T&B Petroleum 33

Rio Oil & Gas 2012 Preview

Photos: Ricardo Almeida

events

Three decades of international recognition

T&B Petroleum 33

events

with the worldwide increase of emerging population and its demand for energy. The slogan ‘Innovate and grow with responsibility ’ shows this viewpoint”, he says. According to the executive, IBP has sought to increase the facilities offered to participants in order to enrich the conference theme and increase the

presence of participants and lecturers from abroad. “For example, in the plenary session of the conference we have the confirmed presence of experts and CEOs of foreign companies. There will be exhibitors from 24 countries with a long history in the oil and gas sector ”, he said. He expects to set an attendance record, up from

the 53,000 visitors that attended the ROG in 2010. In addition to the traditional exhibitions, conferences and business rounds, there is something new: Arena+10, a space especially fitted in the Expo to accommodate a wide debate on social-environmental responsibility. Rio Oil & Gas will have four plenary sessions and six thematic blocks composed of 27 panels on the segments of: Exploration and Production, Downstream and Petrochemicals, Natural Gas, Biofuels, Environment and Operational Safety, Legal and Economic Perspectives and Industry Management and Scenarios. For the latter, the organizers guarantee a specific discussion on different business topics.

A story of three decades An event held from October 3 to 7, 1982, titled “I Feira Industrial de Petróleo e Gás” (1st Industrial Oil and Gas Fair), brought together oil and gas suppliers. Later, it became internationally recognized and became “Rio Oil & Gas”. At the time, when the country was still under military rule and the state monopolized the oil and gas industry, the meeting encouraged local machinery and equipment suppliers to seize the opportunity to promote their products with Petrobras, the only active operator in the domestic market back then. The event started being held every two years, along with oil and petrochemical congresses, which were intertwined with each edition. Since then, there were numerous changes in the country, such as the return to democracy, the discovery of massive hydrocarbon reserves off the Brazilian coast, the strengthening of local industry, opening of the market, the pre-salt and growing 52

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Opening Ceremony of the Rio Oil & Gas 1982 and the 17th World Petroleum Congress (WPC) and Rio Oil & Gas 2002

investments in renewable energy, among others. According to IBP, the event took a leap in 2002, when it hosted the World Petroleum Congress (WPC) – the world’s largest conference on the sector which is held every three years in an oil-producing country – because Rio Oil & Gas was attented by the largest oil companies in the world, in an international pavilion that ac-

commodated delegations from various countries. “It was a great victory for Brazil and a milestone in the professionalization of the fair”, remembers Ana Guedes, Events Manager of IBP. For Álvaro Teixeira, Executive Secretary of IBP, there were many achievements during these years of the events, including the ever greater discussions on operational safety and social-environmental responsibility. “During these three decades, we have improved on the event’s organization, professionalism and results. We made the exhibition bigger, from two pavilions in the 1980s to occupying all five of Riocentro’s pavilions, and added stands to meet the demands of new exhibitors. We also managed to increase the number of topics that are very relevant to industry, as well as to bring foreign speakers to the main plenary sessions”, he adds.

Rio Oil & Gas 2012: three decades of international recognition

During the lectures, the challenges faced by the oil industry will be discussed and innovations in the sector will be presented. The goal is to increase the participants’ understanding of operational practices and technologies, in addition to assist with training in the national industry and to encourage participants to think about the future of the energy sector. “Rio Oil & Gas was created as an event to integrate the Brazilian oil network, and it is getting stronger, every year, with this integration. It is recognized by companies as a benchmark international congress for technical and technological discussions”, emphasized Carlos Eugênio Ressurreição, Coordinator of the ROG Technical Committee. At least one foreign speaker will participate in each and every plenary session, providing further international support. The first day will feature presentations by CEOs of five large operators; on the second, a session addressing operational safety issues; the third plenary session will address the subject of energy and will have speakers considered as worldwide experts on this topic; the last session will be presented by executives from Petrobras. As in the previous editions, there will also be technical sessions in the mornings, when the 628 papers selected by the Technical Committee are scheduled to be presented. In addition to the lectures, there will be digital poster sessions, with video

presentations of the papers. The expectation is that this format will allow the largest number of attendees to have access to information while also providing a greater opportunity for researchers to show their work.

Business Rounds Coordinated by the Organização Nacional da Indústria de Petróleo e Gás (Onip – National Organization of the Oil Industry) and the Serviço Brasileiro de Apoio às Micro e Pequenas Empresas (Sebrae – Brazilian Service of Support for Micro and Small Enterprises) the rounds will create opportunities for oil companies and suppliers to interact. Onip finds and invites large companies in the sector, allowing them to inform their needs and, in partnership with Sebrae, identify suppliers that are capable of meeting the market’s needs. With this partnership, the following rounds have already been accomplished: Rio Oil & Gas (2004, 2006, 2008, 2010), Vitória Oil & Gas (2005, 2007), Brasil Offshore (2005, 2007, 2009, 2011), Fenashore (2005, 2007, 2009), Protection Offshore (2006, 2008, 2010, 2012) and Pernambuco Petroleum Business (2011). Bruno Musso, Superintendent of Onip, emphasizes that the rounds, part of the Programa de Desenvolvimento de Fornecedores/ MultiFor (Supplier Development Program/ MultiFor), is an essential tool that they created. In this edition of the Rio Oil & Gas, 30 anchor companies will partici-

pate, including oil companies, EPC companies, shipyards and major service providers and product manufacturers. “We expect 200 suppliers to participate this year.” It is estimated that these meetings generated R$ 138 million in business transactions last year, 16% more than in 2008. Musso said they expect a higher number of anchors as well as suppliers this year. “We are expecting greater results this year, since the market continues to show an increase in investments”, explains the Superintendent of Onip.

Arena+10 The name given to the parallel event is to mark the ten years since a specific space was created to discuss the ‘sustainability in the oil and gas industry’ topic, at the time when Brazil hosted the 17th World Petroleum Congress (WPC) in conjunction with the Rio Oil & Gas, in 2002. In this space, there will be presentations and discussions on the most relevant topics to the oil, gas and biofuel sector regarding social responsibility as the path to sustainability. “Actually, the Arena+10 name this year is for the already well-known Seminário de Responsabilidade Social do IBP (IBP Social Responsibility Seminar), as a way of honoring the ten years of the initiative that effectively led the Sustainable Development theme into the World Petroleum Congress”, explains Carlos Augusto Victal, Social Responsibility Manager of IBP. T&B Petroleum 33

events The Arena+10 will be held in the Expo area of Rio Oil & Gas, in the pavilion 4 auditorium. Only lectures and debates will be made in this auditorium. According Victal, participation in this space is free: “No registrations will be required and participation will only be limited to the very capacity of the auditorium, estimated at 300 seats. After ten years, we are making our way back, once again getting closer to the public attending the Rio Oil & Gas in order for the interactions to be, indeed, effective”, he adds. With the slogan ‘Progress and challenges of sustainable development in the oil, gas and biofuel industry’, the seminar aims to foster the discussion and views on the different relationships that the oil and

gas industry’s financial capital maintains with the social and environmental factors that are part of people’s everyday life. Some of the main topics are: the relationship between income concentration and development and supply chain and local development. The new paradigm is to continue stimulating economic growth while transitioning to a low-carbon economy, thus creating an opportunity to also discuss the role of consumers, who are demanding more and more oil products, while at the same time criticizing the exploration, production, refining and distribution activities related to these products. “There appears to be considerably more challenges than progress in this situation, and it is precisely this

expectation that we want to encourage on the Arena+10 participants”, said Victal. The Social Responsibility Manager of IBP emphasizes that, in addition to the commitment to continue working on the safety, reliability, efficiency and ethical aspects of their operations, a number of initiatives were undertaken, or are being researched by organizations in the sector, which are critical to global economic and social development progress.”

Future Professional The qualification of manpower, one of the sector’s major obstacles, will be the main theme of the Future Professional Program. The Program is an IBP initiative with support from its Youth

Opportunity for Entrepreneurs On the first day of the Rio Oil & Gas 2012, the Associação Brasileira de Private Equity & Venture Capital (ABVCap - Brazilian Association of Private Equity & Venture Capital) will organize the Venture Forum Setorial de Óleo e Gás (Oil and Gas Sector Venture Forum). Entries were open until August 19 at the Centro de Convenções da Bolsa do Rio (Rio de Janeiro Stock Exchange Convention Center), and the companies selected will undergo business training and guidance. Created to meet the demands of numerous entrepreneurs who contact ABVCap, the Venture Forum is a structured meeting process for companies and potential investors that are interested in participating in the capital of organizations that are undergoing expansion and restructuring. Clovis Meurer, CEO of ABVCap, notes that, during the Rio Oil & Gas, Rio de Janeiro will have virtually every operator in the oil and gas 54

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market that is interested in the Brazilian market, which is currently accelerating quite strongly, in addition to representatives of the entire production chain from Brazil and abroad. Since the Venture Forum has the goal of presenting innovative companies, with excellent teams and high growth potential, in a market that is strong and in need of investment to meet its demands, it is a good opportunity to carry out this oil and gas forum during the ROG. The executive explains that the association follows the oil and gas sector frequently and has even conducted a number of seminars on the topic. “Every year, during the ABVCap Congress, which brings together some 600 national and international participants, we have led the audience this discussion during sector panels. I was even invited to represent the organization in the panel regarding the capitalization of companies in this production sector, to be held in the Rio Oil & Gas”, says Meurer. According to the CEO, the oil and gas market is strategic for the association, since it is a sector undergoing intensive development, mainly due to the pre-salt

exploration, which is putting a high demand on supply companies from the entire chain with the requirement of national content. There is, however, a huge investment opportunity in meeting this demand. “In this sector, we are contacted by both companies and investors. The companies seek ways to get investors to make their business plans possible, and investors, in turn, seek good opportunities to make good business deals”, Meurer said. The association expects to further promote the PE/VC (Venture Capital & Private Equity) activity in Brazil, showing the importance of these investments to the real economy, income generation, jobs and the sustainable economic growth of the country. “This will be a great opportunity to speed up businesses, ensuring investments that will result in the strengthening and capitalization of companies with resources from private equity investors”, the CEO said. He also highlights that, for companies that are selected to the Venture Forum, this will be a unique opportunity to present their plans to important investors that are associated with ABVCap.

Rio Oil & Gas 2012: three decades of international recognition

Committee, aimed at university students. In addition to allowing participants to develop their creativity and originality, the goal of the Program is to encourage youth involvement with current and important topics in the area they wish to work within the oil and gas sector. Since 2002, the Future Professional Program encourages the interaction between university students and the oil and gas market. Universities are invited to participate in the event, in a space specifically designated for the Program. In this edition, the space can accommodate 2,500 students and will have a structure for lectures and roundtables. More than 1,735 students enrolled in 2010, from approximately 25 different universities and technical schools with courses related to the oil and gas sector. Undergraduate, postgraduate, master ’s or doctoral students, residing in Brazil, could participate in the competition that year. Those students who enrolled in the Future Professional 2012 were

able to participate in the Eye on the Future contest, which will award the best video on the program’s topic: Developing national training for the oil and gas industry. Another essential prerequisite to participate was an advanced knowledge of the English language. Finalists faced a final evaluation round by IBP’s Youth Committee. The winner will be awarded a registration to the World Petroleum Congress (WPC) Youth Forum, to be held in Calgary, Canada, from October 23 to 25, 2013. The prize includes airfare (roundtrip), and expenses with accommodation in Canada, based on the organization’s choice. Some topics addressed in the Future Professional Program 2012 are: Women in the oil industry; Innovations in the oil industry; Pre-salt in the oil and gas industry; Safety, Health and Environment in the oil industry; Hot Careers. The topics will be presented by representatives of Chemtech; OGX, FMC, BG, Petrobras, Baker Hughes, and others. T&B Petroleum 33

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The weight of the production chain By bringing together most of the global oil and gas production chain players and the main suppliers – of all sizes – in the industry, the Rio Oil & Gas exhibition is an opportunity for participants to present their latest products and services, in addition to strengthen their relationships and make new networking contacts.

he Federação das Indústrias do Estado do Rio de Janeiro (Firjan - Federation of Industries of the State of Rio de Janeiro) will participate in the Rio Oil & Gas 2012 with a focus on technology, simulation, professional education and innovation. New technologies, environment and work safety are the main topics the institution will address at the fair, which, for Alexandre dos Reis, Oil and Gas Director of the Firjan System, are the three critical factors in the oil and gas sector today. “In the Rio Oil & Gas we will address the qualification and specialization issue as it relates to the segment of simulation and environment, the importance of Safety, Environment and Health in the industry and technological innovations, which currently are three much discussed aspects in oil and gas. We will also participate in the conference with a lecture by some of our executives on the subjects of automation, welding, metallurgy and environment”, Reis said. The institution’s main objective in the fair is to mobilize businesses and industries into the business round. “In addition to participating in the fair with our stand, we will also arrange organized,

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guided tours with companies in the metal-mechanic, metallurgic and maritime sectors, which are looking for oil and gas businesses. We will work with an average of 2,000 companies to visit the fair”, the executive said.

The oil and gas market is strategic The company Brafer, a manufacturer of metal structures that recently entered the oil and gas market, will participate in the ROG for first time. For the last 36 years, the company manufactures steel structures for South American and Brazilian industry projects, and will present its newly developed Oil and Gas Division at the fair, created to provide subsea and offshore structures to the market as well as the prefabrication of pipes (spools). “Rio Oil & Gas is the largest Latin American event in this segment, and Brafer had to take the opportunity to present to the market its supply potential and ability”, said Carlos Tavares, Director of the Brafer Oil and Gas Division. According to the executive, the company will show that it is already supplying oil and gas to the market, meeting the sector’s quali-

ty and design requirements, and it also plans to show that it is already capable of providing the services in its new scope of supply. “We hope that we can schedule some visits to our factory in Rio during the fair, with the aim of demonstrating our installed production capacity to our potential customers”, Tavares stressed. The Brafer factory in Rio de Janeiro is prepared to meet the sector’s manufacturing demand for offshore/subsea structures, equipment and the prefabrication of pipes (spools). With a total area of 73,000 m², it has 30,000 m² of industrial area and an overhead crane with a capacity of up to 100 tonnes. Tavares also explained that, due to the company’s wide-ranging manufacturing capacity, they can also provide the market with welded profile manufacturing and, due to its large raw inventory (sheet metal, profiles, etc..), they can work with steel processing, such as cutting and painting or custom galvanization orders. Brafer is currently manufacturing offshore structures and supplying pancakes, superstructures and outfittings for FPSO Cidade Ilhabela, for SBM Offshore, which will operate in the pre-salt area. The company also has a contract with the joint venture MTOPS (Modec/Toyo) to supply helideck, flare tower, pipe racks, manifold,

Rio Oil & Gas 2012: three decades of international recognition

riser and 2,000 tonnes of offshore structures for FPSO Cidade de Mangaratiba. Additionally, Brafer will start, later this year, the prefabrication of spools for Estaleiro Brasa (Shipyard Brasa), manufacturing pipes for FPSO Cidade Ilhabela. “We expect to sign contracts with various players in the market at this important time when the company is consolidating, as a strategic supplier to the sector ’s various challenges and projects”, concludes the Oil and Gas Division Director of Brafer.

Equipment The company Solaris, which rents equipment for the construction and industry segments, for example, will highlight at fair the Easypower 1563KVA, an ultra-compact generator group in 20foot containers, a machine designed to meet the offshore market demand for spot and/or emergency power supply. The director of Solaris, Paulo Esteves, said the company is investing heavily in developing its oil and gas business in Brazil, so it has participated in major projects related t o t h e s e c t o r. “Rio Oil & Gas is a great opportunity for us to network with the public and suppliers, in addition to strengthen our brand and expertise to this market”, he said. The executive explains that the Easypower, which Solaris will display in its stand, meets all the operational and safety standards required by Petrobras and multinational companies operating in the region, in addition to being an equipment that is flexible and can be disassembled to meet the requirements of logistical limitations of

oil platforms. “It is the latest generation engine-generator set, with all the advanced technologies for low-emissions, energy efficiency, high reliability, and programmable electronic controls and protections”, Esteves said. Due to its comprehensive products, services and solutions portfolio, Solaris plans, in the ROG, to get the attention all kinds of companies that need power, compressed air, work at heights, independent and isolated lighting, cargo handling and earthworks to meet the region’s infrastructure demands.

Chemical treatments The company Veolia Water Brasil will also participate in the Rio Oil & Gas 2012, presenting the working technologies used in its main oil and gas projects. The projects are contracted by Petrobras, the company ’s main customer, and include: the expansion of the water treatment plant and wastewater reuse of the Presidente Getúlio Vargas Refinery (Repar), the expansion of the water treatment plant of the Abreu e Lima Refinery (RNEST), and products and solutions for the Industrial Waste Treatment at Complexo Petroquímico do Rio de

Janeiro (Comperj – Rio de Janeiro Petrochemical Complex). Adriano Longo, Commercial Director for Veolia, said their main goal is to show the company ’s expertise in Brazil and the world, with the aim of strengthening their relationship with customers in the sector and to offer solutions. Veolia Water Brasil is responsible for the company’s oil and gas business in Latin America. “The oil and gas sector is a highlight in our growth strategy and represents a significant part of our revenue”, the executive adds. In Repar, Longo explains that Veolia is responsible for the projects for the Water Treatment and Condensate Treatment Units (Utra/ UTC) and auxiliary systems for the Gasoline and Coke/HDT portfolios. According to him, the expansion is 98% complete. In RNEST, in Ipojuca (State of Pernambuco), Veolia’s projects are at an advanced level - 87% completed. The company is responsible for the water treatment plant, reuse and condensate treatment for the production of demineralized and filtered water. T&B Petroleum 33

events “Veolia operations involve the clarification of water captured at the Utinga and Bita dams and the Ipojuca river, for floto-filtration, Reverse Electrodialysis, carbon filters and demineralization to produce water of different qualities; clarifloculation with lamellae (Multiflo), multimedia filters and carbon filters for tower purge reuse, and carbon filters for reuse of treated effluent from ETDI”, Adriano Longo explains. The executive also commented on the Comperj project, for which the company provides products and services for the Estação de Tratamento de Água Desmineralizada (ETAC –Demineralized Water Treatment Plant), Estação de Tratamento de Condensado (ETC – Condensate Treatment Plant) and Estação de Tratamento de Despejos Industriais (ETDI – Industrial Waste Treatment Plant). The company Director highlights that Comperj will be Petrobras’ first refining plant to be supplied with reuse water from municipal effluent treated at one of the treatment plants, instead of the usual supply from surface waters. “The water from ETAC will be pretreated and demineralized in a reverse osmosis system, capable of producing 980 m ³ / h o f w a t e r, f o l l o w e d by mixed-bed polishing. The system has eight modules, of which seven will be operational and one will be for backup. The project also includes a condensate treatment system comprised of a sequence of filters (coalescers, precoat and activated carbon filters) and mixed-bed polishing”, he explains. He adds that ETDI will have a combination of technologies aimed at water reuse. The project also anticipates the dewatering of 58

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biological and oily sludge produced by ETDI.

jects and, consequently, generating new business.

Special materials

Industrial Gases

Carbinox, a company specialized in stainless steel, carbon steel and special alloys, will take to Rio Oil & Gas 2012, for the third time in a row, the entire portfolio of the products it supplies to the sector, including the pre-salt. It is one of the few companies qualified to supply this market with equipment and materials that are resistant to corrosion and pressure, in addition to having other characteristics. The company has been in the market for 28 years and has supplied its products to major Petrobras’ projects such as RNEST and Comperj. It works with pipes, sheet metal, rods and fittings made of stainless steel, alloy steel and special alloys and rigid conduit and connections in carbon steel, high quality products which undergo technical tests and measurements by experts. “Rio Oil & Gas is one of the sector ’s most important fairs, and Carbinox expects to make some great business deals. Additionally, it is an opportunity to make networking contact with engineers and buyers of these large Petrobras’ projects, to meet other players and further strengthen the Carbinox brand in the sector ”, said Maurício Moura Júnior, t h e C o m m e rcial Manager of Carbinox. According to him, there are great expectations with this opportunity of making new networking contacts, acquiring knowledge and getting involved in the pro-

Air Liquide Brasil, a unit of the French company Air Liquide – a world leader in the production of gases for industrial, health and environmental segments – will participate in the Rio Oil & Gas for the first time, presenting its solutions for the offshore industry together with its units Medal and Air Liquide Global E&C (Engineering & Construction) Solutions. Its stand will be in the Ubifrance pavillion. Air Liquide has been operating in the offshore segment for many years and is more focused on the sector today due to the growing needs of the various players. “We will offer a ‘one-stop shop’ of products, equipment and services for the offshore sector. We know their needs and the importance and responsibility of supplying products that meet and exceed all the required specifications”, says José Antonio Cunha, the Business Manager of Air Liquide Brasil. “This means that customers will be able to get everything they need related to gases for the offshore sector, in one place and at the same time”, he explains. “We make a comprehensive offer to the sector and, for this reason, it covers all the sector activities, such as welding, inerting, analysis, diving, medicinal, cooling and a line of gases specifically for offshore applications, among others. Our products and equipment are in accordance with the highest quality standards, meeting all the standards in the oil and gas sector”, Cunha adds.

Rio Oil & Gas 2012: three decades of international recognition

tionally, they offer technology solutions for the petrochemical and renewables business segments. “We expect good results with the fair, since Air Liquide has all the expertise the offshore market needs, a market that is heated due to the increased pre-salt activity and other investments in the sector, in other countries”, says Cunha.

Engineering and construction

The Business Manager also emphasizes that Air Liquide Brasil has experts in the various regions to provide technical assistance for companies and a commercial team to provide user support in their day-to-day work. “Air Liquide is qualified in the handling and application of the products and equipment, such as welding and inerting gases, nitrogen, helium, diving gas, cylinders, cryogenic tanks, iso-containeres, DNV frames, and others”, Cunha said. The Medal division manufactures gas generating units with one of the best technologies that is both efficient and economic. E&C offers plant engineering and construction projects, incorporating clean and energy-efficient processes for the production of industrial gases, clean conversion projects, facilities for cleaning refinery gas and facilities for the production of petrochemicals and polymers. William Keller, Sales Manager of N2 membrane modules for Medal, in Newport, Delaware (USA),

said the use of this technology will help offshore platforms by providing a continuous supply of gas and will save logistics time (avoid “headaches” in the handling of materials) and money. The gas separation N2 membrane modules, the most advanced in the world, generate inert gases for tertiary oil recovery and to remove carbon dioxide (CO2) from natural gas. The modules also recover hydrogen from refining processes and generate biogas from renewable sources. The General Director of Air Liquide Global E&C Solutions for Latin America, Gunnar T. Nilss o n , ex p l a i n s that their refining technologies meet both conventional and integrated processes for conversion of raw materials, such as hydrocarbons, into fuels. These technologies include the partial oxidation and complete solutions for sulfur management, among others, and extensive their experience in implementing hydrocracking, hydrotreatment and fluid catalytic cracking projects. Addi-

Celebrating its 65 years operating in the country, Techint Engenharia e Construção no Brasil (Techint Engineering and Construction in Brazil) will take to the fair all the experience and know-how it acquired over the years and will also take the opportunity to present the projects currently under development. One of the highlights is the Offshore Techint/ UOT Unit, located in the city of Pontal (State of Paraná), capable of constructing different types of units, fully controlled by Techint. The company offers engineering, supply of equipment, construction, operating and management services for large and highly complex projects, from their design to their operation, on a global level. In recent years, the oil and gas sector has become one of the company’s main markets. “We believe this sector is extremely important to develop our activities, which has accounted for most of the company’s sales in recent years”, r e m a r ke d R i cardo Ourique, General Director of Techint Engenharia e Construção no Brasil. The company designs various projects for the sector, such as the construction of gas pipelines, oil refinery constructions and expansions, maintenance of oil platforms T&B Petroleum 33

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in the Campos Basin, and construction of offshore platforms. Ourique said that, with its participation in the Rio Oil & Gas 2012, Techint Engenharia e Construção has the goal of taking this opportunity to show the company’s history to the public. “We are, surely, if not the oldest, one of the largest companies in the engineering and construction segment, of course this is in addition to being able to network with our customers, partners, suppliers and future service providers”, he said. “The fair is a success every year, with the large number of visitors interested in seeing what is new. We believe this year will not be different, we expect many national and international visitors, attracted by this market’s outlook, which keeps getting bigger in our stand and, perhaps, seize the moment to generate new business”, Ourique concluded.

Transportation Locar, one of Latin America’s largest companies in the segment of special transportation and the largest in the use of lifting cranes, will present the Locar Pipe at the fair, the first pipeline laying barge 60

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in Brazil, which will be ready in eight months. The hull of the Locar Pipe was manufactured in Belém (State of Pará) with the Rio Maguari Shipyard and is now in Ilha do Governador for integration of the structure with the equipment. The vessel will be equipped with five electric generators to power the electric cranes. There are two cranes, the main crane is 47.760 meters high and has a 250 MT capacity (model Manitowoc 4100w - Ringer) and the auxillary crane is 42.767 meters high and has a 150 MT capacity (model Fushun QUY150 - Crawler Crane). This is in addition to other equipment for pipelines alignment, tensioners and a vessel positioning system for the installation of pipelines throughout the entire length of the project. Once the barge is ready, it will have a helipad and the capacity for a crew of 160 people. It will be 87.5 meters long, 30 meters wide and 6 meters deep. The investment totals R$ 75 million. “During the fair, we will present the Locar Pipe to the market as well as all the investments made in the Locar Maritime Di-

vision these last four years”, said Ricardo Alves, the company ’s Maritime Division Director. According to the Director, the oil and gas market is very promising in Brazil and Latin America, and Locar has been investing heavily to be part of this favorable moment. The company has seen significant growth in the maritime segment. The division already has 25 vessels, a team of nearly 300 employees and a main base in Ilha do Governador (State of Rio de Janeiro), and two in Macaé (also in Rio de Janeiro) and Itajaí (State of Santa Catarina). Locar will have a 100 m² stand in ROG and aims to get closer to existing customers as well as making new networking contacts.

Strategic sector As a technical and technological fair, Ernst & Young Terco, specialized in audits, taxes, corporate transactions and consulting services, will not have a stand at the Rio Oil & Gas 2012. However, the company will be present with all its technicians in the sector in order to explain every type of support it provides to the industry. It will be the first time that the company participates in the event, which it will sponsor, but hopes to participate in all future editions. Although fairly new, the Ernst & Young Terco oil and gas center structure already provides services to almost all operators in the country and to a significant number of companies within the industry’s supply chain. In addition to auditing some of the largest oil companies, they are also heavily active in the business and tax consulting segments, whi-

Rio Oil & Gas 2012: three decades of international recognition

ch also include support services, the setting up of companies and their business development in the country by providing support on the acquisition of new investments and divestments. Beth Ramos, Ernst & Young Terco leading partner for the oil and gas market, explains that the company’s advantage is in the creation, in Rio de Janeiro, of a center of excellence in oil and gas – following other centers that already exist in key locations such as Houston, London, Moscow, Aberdeen, and others. “The global structure of the oil and gas centers, now with Brazilian participation, makes it possible for our customers to have integrated assistance in which teams from different countries work together, ensuring a perfect alignment of our customers’ expectations”, she said. The executive said that Ernst & Young Terco has been investing heavily in the oil and gas market since it understands its current importance as well as its future potential. “The services we provide and our partnerships with customers make Ernst & Young Terco see itself as part of the industry and, as such, understands the importance of supporting an event like the Rio Oil & Gas”, Beth Ramos said, pointing out that the regulatory issues, local industry development and the scarcity of skilled labor are, today, the greatest challenges faced by the oil and gas sector in the country. “We must be careful so that the measures encouraging the industry do not become so complex so as to create barriers or risks to operations and/ or resemble a reserved market that will discourage investment”, said the Ernst & Young Terco partner.

With respect to manpower, Beth Ramos says that the country has to face the need to import skilled labor at first. However, during this period, it is important for us to make the best to properly transfer the know-how from the foreign workers to our local team. “Training and resources development must be important aspects in the industry’s Project Management. On the other hand, if we know we need this workforce that is currently abroad, we must work, together with the government, for the work visa process to become more flexible. Ernst & Young Terco, as the only ‘Big 4’ to have its own immigration services, is actively participating in this discussion”, she concluded.

Energy management In this edition of the Rio Oil & Gas, the French company Schneider Electric, specialized in products and services for electrical distribution, industrial automation and control, expects to establish and strengthen technological and commercial partnerships with current customers, potential customers, partners and national and international suppliers. The company will present its electrical and automation solutions, aimed for the offshore and refining segments. “We will highlight the two subsea (between 400 m and 1,000 m) electrical distribution module projects that are underway,

the Pase project for Comperj and the incorporation of the company Telvent. We will also present the PMS (Power Management System) solution for offshore platforms”, said Marcello Martins, the Oil and Gas Division Director of Schneider Electric Brasil. According to Martins, the company is currently working on projects for subsea electrical distribution modules, supplied to Statoil and Shell in the North Sea at depths of 1,000 and 400 meters. At Comperj, Schneider Electric is working on supplying all the panels, MCC (Motor Control Centre) and medium voltage inverters, as well as the electrical automation and integration system for the entire plant, known as Pase. “In this system, we will integrate approximately 2,000 relays from various suppliers into a single IEC 61,850 network”, the executive added. For the oil and gas industry, Schneider Electric provides high, medium and low voltage, electrical distribution solutions, such as automation systems for FPSO applications (Electrical Modules and hulls), FLNG, drillships, WHP, tankers, support boats, onshore E&P, terminals, oil and gas pipelines, petrochemical plants, refineries and gas distributor. T&B Petroleum 33

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Companies from various countries seek to strengthen their presence in the Brazilian market One of the main Rio Oil & Gas achievements during these 30 years is its continued international growth, which follows the country’s positive and promising scenario in the oil and gas sector.

his year ’s edition of the Rio Oil & Gas will have 16 international pavilions: Germany, Argentina, Austria, Belgium, Canada, China, Denmark, United States, Finland, France, Holland, Italy, Norway and the United Kingdom. Austria and Finland will participate for the first time with a pavilion. In the Rio Oil & Gas 2012, 35 companies will exhibit in the Norway pavillion, organized by Innovation Norway. “Due to the growing interest in the Brazilian market, in addition to occupying a larger area in Pavillion 4, several Norwegian companies will gather in Annex 4 of Riocentro”, said Helle Moen, the new Director of Innovation Norway. The participation of delegations from two Norwegian cities, important centers of the offshore and maritime industry, are confirmed: Stavanger – which has signed a memorandum of understanding with the State Government of Rio de Janeiro – and Bergen – which has a similar commitment with the State of Espírito Santo. France will also play an important role at the fair, with 48 companies, two competitiveness clusters and two technical centers in its pavilion, organized by Ubifrance

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Brasil, which will be in Brazil with the aim of establishing bilateral agreements of cooperation. For the organizers, this will be the largest French trade mission ever organized in Brazil in the energy sector. As part of the progressive strengthening of the Franco-Brazilian commercial ties, a Memorandum of Understanding was signed in 2011, in São Paulo, between the French Ministry of Industry and the Brazilian Ministry of Development for the development of technological and commercial partnerships. In May 2012, in the Mechanics Hall and with the support of Ubifrance, several agreements were established between French competitiveness clusters in the mechanics sector and Brazilian players, and it is expected that a global cooperation agreement is

signed in the ROG 2012, based on joint innovation projects. This agreement will enhance Brazilian and French ties and ensure that an important strategic partnership is established for the Apoios Produtivos Locais (APL - Local Production Support) and their French counterparts, the Mer Paca, Mer Bretagne and Novalog Competitiveness Clusters, which will be accompanied by a dozen small innovative companies, known worldwide as start-ups. The 38 French companies in the exhibition will have the opportunity to demonstrate their technological advances and their know-how, network with numerous national and international players in the oil and gas sector and, of course, increase their visibility in

Rio Oil & Gas 2012: three decades of international recognition

one of the largest business events in the world. With the aim of bringing the heated Brazilian oil and gas sector closer to the British suppliers that are looking for new business, the British Pavilion has an important role in this edition, with the participation of 33 companies. Among the various opportunities, the large investments made in offshore development by Petrobras and other operators, including multibillion-dollar contracts to build FPSOs, are the main interests for the companies that make up the delegation. Additionally, refinery and gas pipeline projects are also business opportunities, making the trade mission even more relevant right now. “Brazil is, without a doubt, one of the key energy markets for our members – we even have an office in Rio that is growing significantly, where our team has a great track record in helping UK companies to find local partners – and we are very happy to be with the UK Pavilion once again. We believe the Rio Oil & Gas is an important meeting event in the global energy calendar and we look forward to this year’s

edition”, said Ian Stokes, CEO of the Energy Industries Council (EIC). Canada’s participation has grown with each edition. In 2006 there were about eight exhibitors, in 2008 there were 12, in 2010 there was a significant increase to 33 exhibitors and, this year, it is beating its 2010 record by bringing a total of 43 exhibitors. In this edition, the delegation consists of suppliers of goods, services and technologies that are very interested in taking a look the opportunities and entering the market in a structured way, based on well-planned strategies, always taking into account the local content requirements and the Brazilian business culture. According to, Nadine Lopes, Business Development Officer of the Canadian Consulate General

oil and gas sector, they expect a select audience of professionals focused and interested in seeing the new solutions in the industry. “Today there are more than 60 Canadian companies in the sector operating in Brazil at different stages of business development. And the tendency is that this number will grow each year. We understand the importance of partnering with local companies as a way to enter the market and meet the local content requirements. The Canadian companies are aware of the opportunities in the sector and want to identify partners in the country”, she said.

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professional profile

Accomplishment is

personal satisfaction

Fotos: Divulgação

Influenced by his father on choosing his career as an engineer, Paulo Balochini, a native of São Paulo and the General Manager at UTC Engineering Services, headquartered in Houston, Texas, grew up with an ever greater love for ships and the dream of working for the Brazilian Navy – highly valued by society at the time. With his experience working on projects for offshore oil platforms in Brazil, Africa and the Gulf of Mexico, and with over 15 years of experience working in countries other than Brazil, he highlights the lessons learned regarding new challenges, commitment and the pursuit of results by Karolyna Gomes during his professional life.

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“The fact that my father is an engineer, and I was often in his office and around the construction sites, made me want to follow this profession”, says Balochini, at the age of 52 and with 30 years in the profession. “I believe that professional achievement is not as directly related to being successful as undertaking a certain job or activity with enthusiasm and taking every possible opportunity to do even better than ever.” A strong resume shows that his first job was with the company Setal Instalações Industriais, in 1982. “At the time, I was on vacation from Faculdade de Engenharia de Araraquara (Feca), where I graduated in civil engineering. The company had a work site for manufacturing modules in Ponta D’Areia, in Niterói”, he remembers. This is where Balochini had his first experience in the job market, working in the Structural Shop and preparing shop drawings for these modules. “Setal had a contract with Petrobras to manufacture 14 modules for platforms Cherne 1 and 2.” The company gave him much more than just professional experience. Balochini had the opportunity to work with the one that would become the love of his life. “I am married to Debora, also an engineer. We worked together on some of Setal’s projects.” They have two children, Gianluca and Gabriel, today 21 and 19 years old, respectively. The engineer believes that the period starting at the end of the 1970s and through the 1980s was very important for the development and qualification of the industry and services in the sector. “In my opinion, the program implemented by Petrobras together with companies from Brazil and abroad was a school to qualify professionals for the Brazilian oil sector ”, he says. “Almost all the professionals that began working at that time, and those that were able to continue their activities during the periods when the state-owned company didn’t invest much, were able to acquire and develop experience and, today, almost all of them are in the helm of companies that stand out in the sector.”

Paulo noticed how the industry changed when it transitioned from exploring shallow waters to exploring deep waters and, he says, this change was one of the factors that lead the oil and gas projects into the shipyards, to their full capacity. “Whether for FPSO, TLP, semi-submersible or SPAR, the hull needs qualified personnel, installations and experiences that are compatible with the marine industry. I believe that the experience acquired since the time when the Campos Basin was in full development, on the satellite-platforms in the Northeastern region of Brazil, was very relevant; in addition to having participated in the competition and some projects of the first FPSOs operating for Petrobras in Brazil, in early 1990s”, he says. When speaking of his previous occupations, Balochini highlights the various stages of his career, such as Construction Superintendent at Setal, when he was 24, Construction Director at ABB Lummus Upstream, Construction Manager at Rio Polímeros, until his current position at UTC. “I actually believe that sometimes the projects are more relevant than the occupation. In addition to Petrobras’ projects, I give emphasis to the Elf Aquitaine/Sonagol platforms, for Angola, executed in record time, and the Chevron-Sonangol platform, in Cabinda, also in Angola; BP’s TLP, for the Marlin prospect, and ConocoPhillips’ TLP, for the Magnolia prospect, both in the Gulf of Mexico; and, without a doubt, the experience acquired with Rio Polímeros.” Since January 2007, he works as the General Manager at UTC Engineering Services, in Houston (USA), organizing the company for local and international projects, developing new businesses, and assisting with the Brazilian projects in the downstream and upstream strategies and technologies areas. “Without a doubt,

Age: 52 years old Main occupation: General Director at UTC Engenharia in Houston, Texas Hobby: Sailing, playing tennis, riding the motorcycle and listening to music A good place to rest: In Brazil, Búzios. In America, I had a good experience in Costa Esmeralda, in Florida Book: I am currently reading Boca do Inferno, by Ana Miranda Favorite music: I like classical music, jazz, samba, bossa nova and rock and roll Movie: I like Clint Eastwood, Scorcese, Spilberg, Ridley Scott and Kubrick movies. The Brazilian movies Tropa de elite 1 and 2, and Bye bye, Brasil. our greatest challenge in Houston is establishing operations in line with what we have in Brazil, in a completely different market.” The man doesn’t live just to work, however. Balochini sets some free time for the activities he loves. “I have many hobbies: sailing, playing tennis, listening to music and riding the motorcycle are some of them”, he mentions, saying that after a fall – nothing too serious – he rides the bike less often. “My preferences in music

vary, based on the day and time. I like classical music, jazz, samba, bossa nova and rock and roll. I only listen to the news and classical music in the car.” Balochini says he doesn’t have a favorite book. “Recently, I have been reading articles on the history of Brazil, the world, etc... I am currently reading Boca do Inferno, by Ana Miranda, which is about Bahia in the XVII century.” When analyzing the Brazilian Market, Paulo Balochini says he worries about the growing shortage of qualified professionals, and mentions that hiring foreigners may be a solution to meet the market’s demand and reduce project vulnerability. “I believe there is a shortage of professionals that are qualified and that have experience in the oil industry, and this critical situation tends to worsen with the implementation of projects from the Petrobras Program and those from other operators.” He highlights the shortage of personnel for project management, engineers, designers, supply personnel, and for construction management, in addition to the lack of qualified laborers: welders, plumbers, assemblers, electricians, etc. “I don’t see an alternative other than implementing a national policy to allow foreign professionals to come when they have the qualification and experience required by the market to meet the demands for the next five years. The high unemployment rate in Europe could make it easier.” Regarding the qualification of direct laborers, Paulo Balochini sees that the Prominp - Programa de Mobilização da Indústria Nacional de Petróleo e Gás Natural (Mobilization Program of the National Oil and Natural Gas Industry) is on the right track, but the unbalanced regional demands must be taken into consideration and better analyzed. T&B Petroleum 33

company profile – Triunfo

Triunfo, the solution

in logistics

Triunfo Logística bets heavily on innovation, making its operations a benchmark at the port of Rio de Janeiro. The experience of 27 years transporting goods in maritime and port areas permits the development of precise and efficient solutions to meet the needs of clients. Creative planning leads to the best alternatives when fulfilling contracts, a quality inherent to the whole team, and above all, a commitment by Triunfo.

Tel.: 55 21 2178 8800 / 2178 8801

www.triunfologistica.com.br comercial@triunfologistica.com.br 66

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In an increasingly demanding and evolving market, the company believes it must be in permanent transformation in order to adapt to new conditions and keep up with fast-paced changes. This vision guides the employees on a daily basis, both in the administrative and operational areas. The company is formed by more than one thousand employees moving in the same direction. Only a highly committed team can attain excellence at work – and this goal is reached every day at Triunfo. If anything, only a company that values the skills and competence of each employee is capable of earning the trust and respect enjoyed by Triunfo. These adjectives allow the company to perform distinct activities within the port sector, all of them efficiently: it has enough experience to operate in offshore, general and project cargo. This expertise is increasingly coveted by the companies operating at the Port of Rio de Janeiro. “The company’s major feature is the capacity to adapt quickly to new conditions, devising logistics solutions for bigger and more complex challenges. We have the agility to make the right decisions,” highlights Rogerio Caffaro, an executive director of Triunfo. As a result, quick problem solving has become a well-known trademark of Triunfo regarding port cargo transportation. And this is a valued quality according to commercial partners such as Petrobras, Vale, Odebrecht, Gerdau and Statoil. Catering to such diverse companies demands investments in infrastructure, which is exactly one of Triunfo’s bets. It owns a fleet of cranes and forklift trucks, which allows simultaneous service for as many as eight vessels at the Triunfo-owned wharf, as well as the unloading and loading of different types of cargo that can weigh up to 200 tons.

In addition to a highly-skilled labor force, the company also relies on an excellent structure to provide adequate operations. The port area has 200 thousand square meters, allowing the company to service clients with diverse demands and products – there is even an indoor site for storage. The forklift trucks owned by Triunfo can move cargo as heavy as 50 tons. The cranes owned by the company are capable of moving as much as 440 tons – seven cranes were recently acquired from the German company Liebherr. The company has four LHM´s, of which two are capable of transporting 250 tons and the remaining two can hold up to 600 tons. Such equipment add agility to the transport of products, providing a competitive advantage. But there is more. An area of nearly 100 thousand square meters serves as the support base for operations along the quay of the Port of Rio de Janeiro. Cargo stored at the support base is just about 500 meters from the quays, making for quick loading and unloading operations. “Our structure provides the ability to meet all deadlines quickly and efficiently” highlights Rogerio Caffaro. Traditionally a company that worked with steel products, Triunfo saw its profile change as the Brazilian economy grew, therefore triggering the expansion of the economy of Rio de Janeiro. With the announcement of federal government investment in the pre-salt oil area, Triunfo inked an important partnership with Petrobras. Two separate units meet the demand of the oil and gas industry. One of them assists vessels that help anchor the platforms that are not yet in operation. Within this service, the company is responsible for the storage of products ranging from 60 tons to 120 tons. The other unit provides logistical support, supplying well established platforms. The task in this case is to load ships with goods - supplies, parts and equipment. In both units, there is an average of 300 ships docking every month at the base of Triunfo. But Triunfo`s operations are not limited to the Port of Rio. In an unprecedented way, the company transformed 10.000-ton rafts, with up to three thousand square meters, into floating ports. Of the four units, two have their own cranes to unload the goods as if they were at a port. They can operate in shallow areas without port infrastructure - the equipment can be up to 50 meters away. And the company also has the ability to attach to the rafts a base with dorms and cafeterias for employees.

“We are a company that specializes in solutions, ready for the changes that Brazil and Rio will witness in the coming years” concludes Caffaro. T&B Petroleum 33

products and services

Viking

Viking increases its presence in Brazil

Today, with an office in Rio and two life-saving boat stations (one in Macaé - RJ and another in Santos - SP), the Danish firm announced that two more service stations will be opening in the third quarter of 2012. One will be in Recife and another in São Luís. The fifth installation is already advancing and will be open for business by the end of the fourth quarter of 2012. The firm offers a wide range of products, among them: maritime and offshore systems for evacuation and ramp and slip embarcation; life-saving rafts; life-saving jackets; diving suits; fire-proof clothing; work overalls; skipper’s uniforms; transportation cloting; seamen’s rafts; serviolas and other life-saving equipment, all certified in relation to the latest requsites of the IMO (International Maritime Organization) and SOLAS (Safety of Life at Sea) of the European Union and the USCG (United States Coast Guard). Nevertheless, according to Benny Carlsen (photo), vice president of Viking, each market is different and Brazil has been fundamental for the firm to develop a tight working relationship with recognized authorities, such as the agency here responsible for NORMAM (Brazil’s Maritime Authority Norms), in order to meet the nation’s specific regulatory requirements. “Once again, it was indispensable for us to have worked with Brazilian shipyards, not just as an importer, but also as a firm aiming to go into greater depth in its activities as a supplier to the local market”, Carlsen points out. In Rio de Janeiro, Viking’s operation is led by sales director Mette Line Pedersen, and counts on the 68

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Photo: Courtesy Viking

The Brazilian market has become one of the main focuses of Viking Life-Saving Equipment, which specializes in maritime safety, since 2009, when it opened a subsidiary in Rio de Janeiro.

support of 21 administrative and technical employees – almost all of whom are locals. As regards the firm’s service station in Santos, the executive comments: “We believe that this second installation is the biggest lifeboat service station in Brazil, and perhaps the biggest in all of South America, with service space for handling 15 boats and capacity for 25 employees each”. Just like the main regional players, such as Petrobras, many of our Eurpean clients of Viking are already strongly involved in the entire oil and gas industry along the Brazilian coast – on oil tankers, drill ships, FPSOs and so on. In this sense, the executive cites the example of the Norwegian proprietors, with the regional implementation of support vessels. Although headquartered in Esbjerg, Denmark, in order to maintain its leadership position in the global market for maritime safety in such diverse segments as passenger cruisers, freighters, offshore vessels, defense fleets, fishing and yachts, the firm hás had to change along with the industry. For this reason, it adopted the strategy of producing according to the industry’s demand, with production installations in Denmark, Norway, the U.S. and Thailand.

“To keep pace with out clients, we have a network of more than 60 branches and almost 270 certified service stations and warehouses all over the planet. Their feedback drives our geographic planning,” Carlsen says. The latest Viking launch is a new clothing option for those required to work near fire, which is the Thermal Sensor Technology (TST). The solution emits warning signals to firemen and others nearby when things begin to heat up, since some studies indicate that the main cause of death among firemen in action is heart attack due to thermal stress. In the case of life-saving equipment, product development is a lengthy process and the tests to check on compliance with safety norms are extensive. For this reason, the Viking vice-president explains that it is not very likely for the firm to develop a new product just because it has plans for commercial expansion in a determined market. “Even so, in the case of Brazil we are in a good position, since our expansion coincides with our development of VENOC, launched last year as a direct response to the industry’s growing need for dedicated evacuation solutsions ‘in ship form’”, he comments.

According to Carlsen, VENOC was designed to automate a critical factor in disembarcation procedure and to speed up the transfer of persons evacuating to life-saving boats, even in stormy seas. Complete tests were conducted in the North Sea in troubled Waters and the solution has already been approved under the current regulations defined by SOLAS (Safety of Life at Sea), the international treaty on maritime safety.

Carlsen explains that VENOC is an escape ramp and life-saving boat designed to evacuate up to 100 people for installations that are 15m, 30m or 45m in height. The main lifeboat, which is self-aligning, is connecting to the flaoting device and automatically inflates when it reaches sea level – making the vessel simple and easy to operate. “The ramp-based systems of our competitors use cables connected along side the shiop to maintain stability, but Viking identified that this was a

problem, mainly when the ships are wider,” he states. The executive points out that the result is that the ramp by itself is neutral, even when the ship is in extreme conditions of capsizing and going under. “The impact of capsizing and going under during evacuation was a major focus during the sinking of the Costa Concordia. In the offshore industry, the implementation of increasingly larger ‘flotels’ and more remote locations has been a marked industry trend in recent years,” he finalizes.

Smit Lamnalco

First Smit Lamnalco branded tug launched On August Smit Lamnalco launched SL Gabon, the first tug branded under its new corporate identity, following the integration of Smit’s terminal handling activities with Lamnalco in July 2011. Built by Damen Shipyards Galati in Romania, SL Gabon is also the first of two newbuilds contracted for a five year period by Total Gabon to provide support in the offshore oilfields and to assist tanker operations at the onshore terminal of Cap Lopez, at Port Gentil, Gabon. The second tug, SL Libreville, is due for delivery next month. “It is great that the first newbuild decked with our new corporate colours visualises the integration of two international marine service providers,” said Smit Lamnalco CEO Daan Koornneef. The newbuilds are Stan Tug 4200-type tugs, rugged twin-screw vessels with 68 tonnes bollard pull. Accommodating a crew of 16 and fully air-conditioned, the vessels can be used for towing, pushing, push-pull, berthing, anchor handling, hydrographical survey, line handling, firefighting, salvage, diving support and pollution control operations in all waters.

Contract Renewal – The Total Gabon contract renews a longstanding partnership between the oil major and Smit Lamnalco. The newbuildings replace two older Damen-built vessels, and join the existing tugs Smit Manji and Smit Ozouri, built in 2007. For Total Gabon, the latest renewal extends a relationship in Gabon that can be traced back through SMIT to 1998. “As well as symbolising the ongoing trust placed in us by our customers through our integration, the delivery confirms our willingness to commit to building new vessels for energy majors operating in promising markets,” said Mr Koornneef. “Given Port Gentil’s remote location, it is critical that marine support services are robust and reliable.”

Localisation Programme – Smit Lamnalco operates with a locally-established company Smit Lamnalco Gabon, which reports to the company’s Regional Director. This entity recently relocated to new offices closer to Total Gabon’s logistics base in Port Gentil, to optimise support to Total Gabon. “We emphasise localisation through partnerships with local companies, employment of local staff, crews and subcontractors,” said Mr Koornneef. “This benefits all stakeholders, as it recognises local networks, culture and circumstances. Gabon is a strong market for Smit Lamnalco and a key location in our long-term partnership with Total to support our customer’s strategic goals in West Africa.” T&B Petroleum 33

products and services

GE Energy’s Power Conversion

Being close to customers with the right technology at the right time A successful strategy for Power Conversion in Brazil for over 30 years Actions always speak louder than words. When it comes to building on GE’s think globally, act locally strategy, GE Energy’s Power Conversion business is right on target. For over 30 years GE Energy’s Power Conversion business has been providing fully integrated solutions to the Brazilian industries. First with, the Betim facility close to Belo Horizonte, in operation since the 1980s, has extensive manufacturing and application experience of power conversion systems including medium and low voltage switchboards and variable frequency drive solutions for use in advanced propulsion and drilling control solutions. To ensure that the most innovative technologies will be developed, offered and moreover supported locally in Brazil, GE recently announced the development of their local Research & Development facility. The ground breaking on this R$500 million ($190 million) technology center in Rio de Janeiro was held in May 2012. With this new center planned to open with some 400 researchers in 2013, the company is not only spreading its global R&D footprint but also crucially moving closer to Latin American customers. The signal is clear, being close to customers and top talent wherever it exists worldwide is a strategy that wins out. Following the lead of its parent company, Power Conversion is making sure that it too can benefit from developing the local talent base. 70

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“We are investing in Brazil to develop the most innovative technologies linked to global solutions scaled to local customers in the Brazilian offshore and maritime industries” states Paul English, Marine Vertical Leader of GE Energy’s Power Conversion business. “We are no new comer to the region and notably to Brazil. GE’s global investment in Brazil in the form of an R&D center will greatly complement our substantial installed base of equipment, systems and people, further strengthening our successful track record based on delivering tailored power conversion solutions to the offshore and marine industries.” Power Conversion is by no means alone in the rush to support the enormous expansion in Brazil’s shipbuilding and offshore operations. Indeed, there are a lot

of companies now attempting to move into the region. Power Conversion, however, is marked by its long term strategy that’s been evolving for many decades and demonstrates the company’s long-term commitment to the region. By ensuring that their technical, engineering and commercial resources are located closer to their customers, they have and continue to build an organisation that can rapidly respond to their customers’ needs in Brazil and throughout the region. Power Conversion’s manufacturing, service support and training facilities reflect their localization and knowledge sharing strategy, expanding opportunities for local employment and training in high-tech engineering positions for a new generation of Brazilians. Yet another example of how this commitment translates into getting the best technologies into the hands of local customers, in 2011 Power Conversion announced a planned addition to its facilities in Brazil as it anticipates the opening of a substantial expansion of

service centre in Macae. The new facility, scheduled to be operational by the end of 2012, will include training, spares holding and expanded service provision for equipment such as Dynamic Positioning control and vessel control systems, rotating machinery, switchgear and variable speed propulsion and drilling drives. It was also in 2011 that GE announced that it had completed its preparations to begin manufacture of its variable frequency drilling drives in Betim. The process of transferring knowledge between GE UK drilling drive specialists and their Brazilian colleagues was one that evolved over a period of many months. The variable frequency drilling drive is a critical component in any offshore drilling unit. The latest drive features responsive, high accuracy speed and torque control give excellent dynamic response across the speed range – it makes a significant contribution to improving the overall efficiency and effectiveness of the offshore drilling operation. With more than forty years of experience in designing, manufacturing and supporting this vital element of a drilling rig GE says that it was a logical next step to move production capacity and expertise to be closer to one of the world’s fastest developing offshore industry markets. Taken together with its motors and generator manufacturing plant in Campinas (SP) and the operations to assemble DP and vessel automation systems it’s clear that GE Energy’s Power Conversion business can offer a broad scope of delivery to its customers in Brazil and is committed to supporting them long into the future. Power Conversion is aware that the required skills and appropriate manufacturing capacity is difficult to develop and bring into effective operation in an instant. It takes patience to evolve an operation and to build a skills base and culture that’s knowledgeable and committed to a

local community – which helps to explain why Power Conversion is so very proud of its long term strategy which now identifies it with the enviable capacity to deliver very substantial portions of the whole electrical and electronic systems for a variety of new building from OSVs to drillships and FPSOs. “This isn’t a PowerPoint type operation“, Paul English emphasised, “this is real and it’s here now, today. We’re actively engaged in supporting newbuilding projects such as semi-submersible drilling units and numerous support vessels. We’re delivering systems in Brazil for Brazil rig and we are tangibly demonstrating our capacity to achieve high levels of local content within our existing facilities. In the case of a drilling rig Power Conversion’s electrical systems contribute considerably to the rig’s efficient and effective performance in the challenging deep waters in the pre-salt regions off Brazil’s east coast Equipment flexibility and versatile engineering designs are what it takes to get a flexible and versatile drilling unit. A hallmark GE’s diesel electric power and propulsion technology is the flexibility to place components, such as diesel generator sets, switchboards and drives at their most efficient location within the vessel. This flexibility and versatility makes it easy to create separated compartments to fulfill safety and redundancy requirements. Combined

with redundant power and control cabling to and from all electrical systems, this creates an optimal installation that will meet the most stringent regulatory requirements. It is possible to design a vessel so that extreme cases like flooding or fire in any compartment will not lead to a blackout of the total propulsion system or power supply system. Controlled specified operation can continue to ensure the safety and availability of the vessel. “The flexibility and configurability of our electric power, propulsion and control systems means that rig operators can capitalize on all the advantages of multiple levels of redundancy and convert it into improved rig availability without having to pay an unreasonable penalty in terms of weight, machinery space and capital equipment cost.” said Paul English “Our offshore technologies are being harnessed to improve today’s marine and offshore processes for a cleaner, more productive vessel.” Power Conversion says that it’s not just about manufacturing however - Its knowledge sharing between its global operating units and the development of specialist skills and capabilities in the region, truly embracing the culture of “Brazil for Brazil”. That means localizing engineering, design, commissioning, service and project management skills are central to GE Energy Power Conversion’s vision to serve their Brazilian customers for the long term. T&B Petroleum 33

products and services

SAS

SAS launches mooring system in Brazil SAS is a Brastec Group Company located at a completely renovated location at Alphen aan den Rijn, Holland. The major benefit of this location is its direct access to water with detachable floating assembly floor. The floor can be towed out and replaced by an inland canal barge allowing our heavy machinery to be loaded indoors then transported directly by barge to an international shipping point in Rotterdam. A brand new Sales and Engineering office, SAS-USA Inc., has recently been opened in Houston, Texas to serve the vast and expanding oil and gas industry in the Gulf of Mexico. Further SAS has service points in Brazil and Singapore and a facility in South Korea for fabrication and assembly. The latest addition to our already extensive marine and offshore product line gains us entry into the highly specialized world of Offshore Oil Floating Production Platforms. This latest offering, specifically aimed at spread mooring systems aboard FPSO’s and FPU’s of all configuration, has just emerged from a year long Research & Development program using a combination of existing technology and innovative design to develop our Linear Chain Tensioner (LCT) range of mooring equipment products. Our official introduction and launch of this equipment will be place at Rio Oil and Gas 2012 conference in Rio de Janeiro, Brazil. Linear Chain Tensioner: The main focus for this product is placed on providing uncomplicated function, reliability in operation, ruggedness of construction, simplicity in installation and maximized performance. We offer unique features like fully corrosion resistant critical 72

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components, modular construction, and a custom designed footprint. Rather than be a “me-too” addition to the list of similar equipment suppliers we have opted to raise the standards with a unique design basic model, fixed push type, chain tensioner and support this with a range of optional styles each offering a different solution to mooring chain installation and pre-tensioning applications:

• Push style fixed stopper tensioner: Base product type is the most compact of all models installed above deck with no equipment penetration of, or access required below, the main deck. Mounting footprint can be configured to introduce mooring loads directly into the below deck support structure such that no additional or special gussets or webs are required. • Inverted pull style fixed stopper tensioner: This type involves equipment penetration of the mooring deck and provision of a lower access maintenance gallery but requires much lower overhead clearance and mooring deck footprint. • Movable pull style without an integral stopper: Operates in conjunction with a group of 3 to 6 deck mounted fixed primary stoppers for a mooring line bundle. Most cost effective option but requires overhead gantry and hoist to reposition the tensioner between mooring lines. • Movable push style with integral secondary stopper: For use where separate external primary stoppers are installed – such as Underwater Combined Stopper Fairlead. More complex than the above movable style and requires a heavier overhead gantry and hoist arrangement. • Movable horizontal style tensioner with fixed stopper and attached overboarding chute: Primarily incorporated on true ship-shape hulls, or in applications where it is preferred to have mooring chain departure directly from the main deck edge.

• Stand alone horizontal fixed stopper with integral overboarding chute: Similar to above option but used in conjunction with a rotary drum installation and pre-tensioning winch with deck edge mooring chain departure. This style requires careful consideration of the chute design to accommodate the rope to chain attachment and angular displacement of the mooring line. Underwater Swivel Fairlead: Vertical departure mooring chains under tension are deflected from their path down the side shell of hull out to their seabed anchors by a chain fairlead installed in a permanently submerged position at the bottom end of the hull close to the bilge radius on FPSO’s, pontoon or lower spar hull on FPU’s. As a natural companion for the Linear Chain Tensioner, SAS has

adapted its existing line of underwater rope fairleads for chain applications such that a complete mooring equipment package can be offered. The Fairlead is a conventional flagging style unit, bracket mounted to the hull structure and fitted with a high tensile cast steel wildcat. It has a rope groove cast into the core so it can handle both wire rope or chain messenger lines. The major attribute of the SAS Fairlead is its attention to Out-of-Plane Bending (OPB) issues on both vertical and horizontal critically loaded chain links. Special consideration has been given to the design of the wildcat chain pocket to fully support the link and selection of the hinge pin journal bearing breakaway torque under load to minimize the side load required on the wildcat to rotate the flagging arm.

The use of seawater corrosion resistant stainless steels for exposed components, composite journal bearing material and specially formulated paint coating is employed to protect the fairlead during its permanently submerged life span with minimal maintenance requirement. Should maintenance or inspection be required the entire unit can be dismantled and re-assembled underwater using an ROV with or without diver assistance and while maintaining tension in the mooring line. To facilitate in-position bearing condition analysis, visual or electronic (LVDT) bearing wear indicators can be included to extend between inspection periods that require fairlead removal to deck level.

Keppel FELS Brasil

Keppel FELS Brasil clinches US$950 million in FPSO contracts from Petrobras Keppel FELS Brasil S/A has secured two contracts worth a total of about US$950 million from the Petrobras-led consortiums, Guara BV and Tupi BV, for the fabrication and integration of topside modules on the Floating Production Storage and Offloading vessels (FPSO) P-66 and P-69. As part of the agreement, Petrobras has an option for a similar contract to be exercised by 1Q 2014. Mr. Chow Yew Yuen, Chief Operating Officer of Keppel Offshore & Marine (Keppel O&M), the parent company of Keppel FELS Brasil, said, “We are pleased to be able to support Petrobras in growing their fleet of FPSOs, providing local content to meet their requirements. Undertaking two similar projects will enable us to maximise our efficiencies and add value for our customer. Having delivered a number of FPSO conversions and topside integration projects with another two in progress,

we are proud that our BrasFELS shipyard has established a track record of quality deliveries. Our recent firm contracts signed with Sete Brasil for five additional DSSTM 38E drilling semisubmersibles are a testament to the good standing of our BrasFELS shipyard. “As the most established offshore yard in Latin America, we are continually upgrading our capabilities and have the capacity to take on more projects of different varieties. Our Near Market, Near Customer strategy has enabled us to better serve Petrobras. We look forward to

continuing this win-win partnership and contribute to Brazil’s E&P programme.” The FPSOs will have identical work scopes which includes the fabrication and integration of seven topside modules. When completed, P-66 will be deployed to the Guara field while P-69 will work in the Tupi field in offshore Brazil. Both FPSOs will each have a production capacity of 150,000 barrels of oil per day (bopd). BrasFELS, Keppel FELS Brasil’s shipyard located in Angra dos Reis, Rio de Janeiro, is currently also undertaking the fabrication and integration of topside modules for FPSO Cidade de Paraty and FPSO Cidade de São Paulo. BrasFELS recently sealed a contract with MTOPS (MODEC and Toyo Offshore Production Systems), for the fabrication and integration of topsides for FPSO Cidade de Mangaratiba. T&B Petroleum 33

regulatory framework

The current context

of the Brazilian oil and gas industry The new Regulatory Framework: perspectives, opportunities and challenges. Nearly 100 years ago it was said the oil reserves in the world would last for only 40 years; Less than 50 years ago it was believed Brazil had no great petroleum potential; Less than 20 years ago it was believed the natural gas discoveries were not economically viable; Less than 10 years ago the pre-salt was not explored in Brazil and it was believed the Santos Basin would not have the same potential as the Campos Basin

H Claudia Rabello graduated in Social Communication at the Catholic University of Rio de Janeiro (PUC-RJ), Post Graduated in Business Administration and Marketing at the Brazilian Institute of Capital Markets (IBMEC) and Post Graduated in Oil and Gas Management at the Federal University of Rio de Janeiro (UFRJ/COPPE). Work at the energy sector for 13 years and is currently the General Manager of Licensing Rounds Promotion at the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP), which is the area responsible for the Bidding Rounds and in charge of the qualifications of companies interested in joining the E&P industry in Brazil by means of Bidding Rounds or farm in.

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ow many myths will still fall down thanks to the evolution of technologies and the continuing activities of exploration and production (E&P)? Exploration activities in blocks awarded in the Bidding Rounds promoted by the National Agency of Petroleum Natural Gas and Biofuels (ANP) enabled Brazil to reach the pre-salt reservoirs; discoveries of such magnitude rarely seen in the world which placed Brazil in a new level at international geopolitics. Consequently, the country is currently experiencing such a particular moment of its history linked to oil and natural gas. This new paradigm has put Brazil in the spotlight and brought forth the necessity to review the National Regulatory Framework for oil and gas. In 2008 Brazil began to review the Regulatory Framework and as it deals with issues of national wealth and great complexity, only in 2010 the laws were enacted. However there is still no definition on the distribution of the pre-salt royalties among the Federal Union, states and municipalities. It is not easy to understand the reasons Figure 1- Brazilian sedimentary basins that led Brazil to stop

Figure 2 – The institutional evolution of the E&P in Brazil

the Bidding Rounds or why the new Regulatory Framework has not been fully defined yet. The point is: Brazil’s necessary pause should not overshadow the country’s huge energy potential and even businesses opportunities that are present today and those that will arise in the coming years Brazil is a country of 8.5 million square kilometers, nearly 200 million people and it’s currently the sixth largest economy in the world. With US$ 377 billion in international reserves and Investment Grade status, there is economic stability and, additionally, calling for different energy sources. Considering Brazil’s experience in ethanol production since the 70s and the land available for agriculture, the perspective regarding biofuels (biodiesel and ethanol) is very positive. As a country with continental dimensions and a huge coast, Brazil opens up possibilities for other renewable energies such as solar, wind, tidal, wave, among others. Not to mention the sedimentary area: there are approximately 7.5 million square kilometers - 5 million onshore and 2.5 million offshore - a giant area where studies and discoveries in the pre-salt layer indicate great potential for hydrocarbons. Besides brazilian privileged geographical and geological environment, there are no wars, terrorism, nor religious, racial or political conflicts and it possesses a reliable Regulatory Framework: the rules are clear and the E&P signed contracts are respected. The institutional context is stable and very favorable. Since the abolishment of Petrobras’

monopoly in 1995, ANP has promoted 10 Bidding Rounds and as a result, there are currently 77 concessionaires in the Brazilian E&P industry responsible for producing more than 2 million bbl of oil and 70 million m³ of natural gas per day. Importantly, 50% of the concessionaires currently in Brazil are from 20 different countries, reinforcing the fact country is considered to be a prime destination for investment. However, only 4.5% of the Brazilian sedimentary area is under concession for E&P activities. Today there are 295 blocks in the exploration phase and 418 fields in production. Brazil has proven reserves of 15 billion bbl of oil and nearly 450 billion m³ of natural gas and, taking into account the current discoveries in pre-salt, the oil reserves may jump to 30 billion bbl - a new paradigm for Brazil. The high potential and low exploratory risk observed in the Pre-salt Polygon has led Brazil to enact three new laws within the Regulatory Framework for the oil and gas industry: Law No. 12,351/10, which introduced the Production Sharing Contract (PSC) for the Pre-salt Polygon and Strategic Areas and also created the Social Fund; Law No. 12,304/10, which created the Pré-Sal Petróleo S/A., and Law No. 12,276/10 that defined the Onerous Assignment of Rights to Petrobras. The Strategic Areas will be those holding the same characteristics as the Pre-salt Polygon: high potential and low exploratory risk. The House of Representatives is still discussing Bill No. 2,565/11 regarding the distribution of royalties. This is the last spot open for the full definition of the new Regulatory Framework. The new T&B Petroleum 33

regulatory framework

Figure 3 - Pre-Salt Polygon - 2.3% of the Brazilian sedimentary area

Figure 4 – Franco & Libra structural map

model provides different types of contracts: PSC for future contracts in the Pre-salt Polygon, located in the southeast of the country, representing only 2.3% of the Brazilian sedimentary basins; and the Concession Contract for blocks already granted in this area – a good example of the respect for contracts – and for the rest of the sedimentary areas, almost 98% of the Brazilian basins. The new model also includes the Onerous Assignment of Rights, signed with Petrobras specifically for 5 billion bbl. The duties of ANP, Pré-Sal Petróleo S/A. and Petrobras are absolutely clear in the Production Sharing System: ANP has maintained its functions of promoting Bidding Rounds, monitoring contracts and inspecting activities; Pré-Sal Petróleo S/A. is the representative of the 76

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Federal Union in consortia, mainly in economic issues (– and will approve the cost oil); and Petrobras will be the only operator with a minimum share of 30%. This model conciliates the interests of the Federal Government, oil companies and the Brazilian society as it keeps the Pre-Salt Polygon open to the participation of several Brazilian and also foreign companies, but the Federal Union and Petrobras have their participations ensured. In order to enhance the value of the Brazilian Pre-salt, in 2010, two wells were drilled in the Polygon based on studies of the Agency’s technical staff. As a result, Brazil reached giant discoveries: Franco and Libra. Interestingly the blocks that encompass Franco and Libra were returned to ANP in Round 0 and were offered by the Agency in the 6th Round, but no company was interested. Currently, these two discoveries represent an estimated volume of 10 billion bbl of oil. It reinforces the theory that the Stone Age did not end due to the lack of stones and the Oil Era will not end due to the lack of hydrocarbons. Evolving technologies in E&P enable new discoveries and the best use of the reserves. Franco was used for the Petrobras Capitalization and Libra should be the area offered in the first Pre-salt Bidding Round. The only offer criterion for the Auction will be the percentage of oil addressed for the Union. The Signature Bonus, Local Content and Exploration Program will be defined in Tender Protocol. The first Bidding Round of Pre-salt is eagerly awaited by the market but it is worth remembering the opportunities in Brazil go far beyond Pre-salt. The 11th Bidding Round (with areas just outside the Pre-Salt Polygon) focuses on the Brazilian Equatorial Margin and includes 174 blocks, half onshore and half offshore, in mature basins and new frontiers - a way to spread the benefits of oil and gas activities among the many Brazilian states and municipalities. There are opportunities for small, medium and large companies. One reason to focus on the Equatorial Margin is the analogy between the coasts of Brazil and Africa (Schiefelbein et al. 2000). As there were giant discoveries along the west coast of Africa, such as Jubilee Field in Ghana, it is believed the Brazilian Equatorial Margin has great potential. This Round was approved by the National Council for Energy Policy (CNPE) in 2011; otherwise the Government Resolution that

Figure 5 - 11th Bidding Round

Figure 6 - Analogies between the coasts of Africa and Brazil

authorizes ANP to perform the Auction has not been signed yet. Bill No. 2,565/11, currently under discussion in the Brazilian Congress, refers not only to Production Sharing Contracts, but also to the distribution of royalties relating to Concession Contracts. Considering the discussions have not ended and that the process involves several states and municipalities, new issues may arise; therefore new contracts should only be signed after the complete definition of the new Regulatory Framework. Importantly, the pause in Bidding Rounds was a consequence of the pre-salt discoveries, which made the review of the Regulatory Framework necessary. The Bidding Rounds are a way to reset exploration areas in Brazil. Based on current contracts, in 2016 there will be no blocks under exploration phase.

The ANP is hiring exploratory activities throughout the country in order to better know the Brazilian oil and gas potential - strategic for all countries, and also to decentralize the E&P investment, currently concentrated in the Southeast. The ANPâ&#x20AC;&#x2122;s Multi-Annual Exploratory Plan (PPA) is part of the Federal Governmentâ&#x20AC;&#x2122;s Growth Acceleration Program (PAC). The Plan foresees investments of almost US$ 1 billion in 22 sedimentary basins in more than 15 states. Besides all the wonders of Brazilian energy potential, there are challenges to be faced in order to foster the development of the oil and gas industry, such as: infrastructure, workforce, technological innovation, supply of goods and services, operational safety, among others. Demand for goods and services in Brazil could reach US$ 400 billion by 2020. Brazil will have to invest heavily in infrastructure, not just platforms and FPSOs, but also supply boats, pipelines, ports, shipyards, steel, etc. According to the Local Content Policy in Brazil, defined by the Federal Government and executed by ANP, the concessionaires must hire a minimum percentage of goods and services from the domestic industry, therefore, significant part of this infrastructure will be produced in Brazil, which will be both a challenge and a great opportunity for the country. Commitment to Local Content was required in all Bidding Rounds as one of the three bid offerings criteria used to define the bidding winners. Until the 4th Round, free local content offers were allowed, however, in the 5th and 6th Rounds minimum offer limits were stipulated and from the 7th Round on, ANP also set a maximum limit, needed to prevent unattainable Local Content percentage offered by companies aiming to ensure the block granting. In cases of deadlines and prices higher in Brazil than in the international market, the concessionaire may be released by the ANP to reach the Local Content on a specific item, but will still need to meet the global percentage committed to in the Auction. To be part of the Brazilian oil and gas industry companies must be committed to the Local Content Policy. Note that since the abolishment of the Petrobrasâ&#x20AC;&#x2122; monopoly, many newcomers joined the Brazilian E&P. At that time the infrastructure and suppliers of goods and services were not sufficient to meet demand, there were no skilled workforce and not even mature regulation. Nevertheless, companies outperformed so well the difficulties that the T&B Petroleum 33

regulatory framework

Figure 7 – Exploratory areas evolution

Figure 8 – PPA sedimentary basins

Brazilian oil and gas industry grew intensively and the oil production almost tripled since 1995. Taking into account the development of the E&P activities, including the pre-salt, the economy of scale in Brazil will allow companies to hire goods and services in a very competitive way. 15 years ago the shipbuilding industry was virtually bankrupt in Brazil and currently, as a consequence of the E&P activities, it is booming. Local content can be an opportunity for the country, for suppliers and for oil companies committed to the development of Brazil, which is ready to sow the seeds today and reap the benefits in the future. Comparing Brazil to other countries, the conclusion is it is a strategic partner. The country’s oil and gas potential is indisputable, there is demand and a huge market. Additionally, the economic context and the institutional environment are stable, the rules are clear and the contracts are respected. 78

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As investments in research and development contribute to the improvement of the Brazilian industry, in 1998 the ANP included the R&D Clause in the Concession Contracts. It obliges concessionaires of very profitable fields to invest 1% of their gross revenue on R&D in Brazil. Between 1998 and 2011, this percentage represented around US$ 3.5 billion. R&D contributes not only to the development of National industry, but technological innovation can also bring safety to E&P operations. The world is facing the challenge of conciliating development with environment. Operational Safety is an important issue in that context, there must be strict rules and intelligent monitoring systems to prevent increasing the number of accidents from the global intensification in E&P activities. Planning and partnerships are also very important. The ANP has signed agreements with the Navy that allowed the agency to increase the number of inspections in platforms and FPSOs. Today it is possible to hold up to 90 technical inspections per month. Aware that personnel training contribute to operational safety and also to the development of the industry, in 1999 ANP created the Human Resources Program (HRP / ANP). The PRH is funded by the R&D Clause and by CT-PETRO - a sectorial fund based on royalties revenue. In 1998 the revenue in royalties was US$ 142 million and in 2011 it reached US$ 6.5 billion, a growth of more than 4,000%. As a consequence, the Program has invested in Brazil more than US$120 million in human resource development, including nearly 6,000 scholarships. Another opportunity in the current context of the oil and gas industry in Brazil is the unconventional gas. Its exploration is now a reality in Brazil and the peculiarities need to be reflected in the regulation. Currently, ANP is promoting studies in four sedimentary basins: Parecis, Parnaíba, Reconcavo and San Francisco. In view of all of this, the country will need a great amount of money in this new context, so investments are welcome, both domestic and foreign. The expectation for concluding the new Regulatory Framework can bring anxiety to the market, however, when analyzing the perspective of Brazil, one can clearly see there are great challenges, but the opportunities are enormous and the results should be even bigger.

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concession and sharing

CONCESSION AND SHARING

beyond semantics

It is not without reason that questions relating to the implementation of Law n. 12.351, of December 22, 2010, remain absent from the open agenda of the public sectors that should take care of this subject, with the zeal supposedly dedicated to the countryâ&#x20AC;&#x2122;s interests, above all those whose critical effects are debited on the Brazilian project for overcoming the world economic crises, which, if trusted the government experts, we have hardly touched.

Antonio Bastos A. Sarmento is a lawyer and partner to Tauil e Chequer Advogados.

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fter a period of euphoria and greater expectations, fed by myths on the offspring from the generous production of petroleum waved to the proud patriotism of the Brazilian people, the subject was dissipated and shadowed by questions poorly sketched, which are the primary causes of dismay and paralysis in face of problems, the extent of which we are not used to evaluate before recognizing the we have been hasty or the victims of a puerile optimism. Such hesitation has put in motion the persistent inquietude we fall into when speculating on the causes of so much lateness in launching the projects for the acceleration of the petroleum industry in our country. The reasons for such difficulty, however, if searched with will and perseverance are easily unveiled from the cold and passion free reading of the text of the pre-salt law. While performing this exercise, the feeling of loss of contact with the reality comes to our mind imperatively as to the question concerning to, and when, the actions required for making true the so expected start up of a new era for taking advantage from the huge national hydrocarbon resources to the general benefit of the Brazilian society will come up. The discussion that nowadays grabs the Brazilians is no more focused on determining which kind of contract is compatible with the exploratory model adequate to the pre-salt and its unmeasurable (in the most optimistic vision) reservoirs that would make Brazil the Twenty-first Century oil superpower, but in how to structure and give muscle to the assumptions nurtured by Law 12.351. It is no secret that the concession as much as the sharing agreements equally deserve the supporting framework for all possible arrangements if guided by an intelligent and objective negotiation. However, if transmigrated into a semantic dissent, the problem goes loose in barren wrangling. In the pre-salt case the neural point is not the name of the contract that will regulate the contractorâ&#x20AC;&#x2122;s obligations and rights, whether concession or sharing, but how much, when and how the State will be paid in terms of remuneration of the public asset assigned to private exploration, and, overall, the destination of such values, its division and use to the benefit of the society.

Photo: Petrobras Agency

Disregarding the open-ending funds on which the government intends apply the pre-salt revenues. The vexata quaestio, the dispute that bleeds in the heart of the federative establishment has always been the hardened polemic surrounding the royalties’ booty, a subject to which we have dedicated more space than the patience tolerates and the civility allows for, before prophesying that the solutions anguishedly postponed shall not materialize without deep cuttings in the flesh of the unavoidable losers: the national interests. In the other side, the notorious existence of a hiatus between the contents of the Law and its fulfillment, to be filled in towards the transposition of the unresolved questionings, has been left aside by the editors of the text while giving space to the confuse methodology of the work to be carried out by the State, awkwardly distributed among new and old public service entities delegated to erratic missions. Such situation is spotted as from the definition of attributions assigned to a minimum of four State bureaucracies (not to speak Petrobrás), which have been granted overlapping competences, or, in the most optimistic interpretation, ill and incoherently positioned, but apt to raise conflicting jurisdictions, or corporative jealousies, prone to enervate their less aggressive servant in defense of his prerogatives. This fact irrecusably takes the point on the comparison between attributions granted to the Ministry of Mines and Energy (MME) to undertake the political command of the process and those of its conjectural assistants or coadjutants, as it is nowadays difficult to untangle the hierarchic knots ruling the relationship among entities of the federal administration and autarchic agencies, or so assumed, created for disconnecting sectarian-ideological meddling from the State service. Among some of these situations it is perceived that the MME depends on the National Petroleum Agency (ANP) to inform the National Energy Policy Council (CNPE) what it is entrusted to propose to the Presidency of the Republic for the definition of the blocs to be offered to exploration and fixing the technical and economic parameters for the sharing agreements. The ANP is also to subsidize the MME with geological, geophysical and economic data to the structuring of the contracts, which are on occasion turned up to the CNPE that will again pass them to the Presidency of the Republic. Later on the MME will receive all such stuff in the form of contracts it will sign on behalf of the Federal Union.

Further on it is known in the Law that the ANP prepares the drafts for the sharing contracts and bidding rules to the subsequent approval of the MME, incorporating the technical and economic parameters that the CNPE suggested to the Presidency of the Republic, the same set up by the ANP and received from the MME. In other provisions of the Pre-Salt Law the ANP advances the bids (should it negotiate the contracts to be signed by the MME? this is not part of the Law, but “por supuesto…”) and carries out the follow up of the performance of the sharing contractor in all its aspects. However, the company Pré-Sal Petróleo S.A. (PPSA), incorporated under Law n. 12.304, of August 2, 2010, will be the chief manager of the production sharing agreements entered into with the MME, notwithstanding administered and supervised by the ANP. As a gift, PPSA shall be the trading company to commercialize the profit oil allocated to the government, but Petrobras may be committed to this charge in so far as PPSA will eventually have its own commercial expert staff. Of course, the new state company will sit in Brasilia, but its main offices shall stay in Rio de Janeiro… It is the very childish turning around play, or “alive wheels”, as you may like it. To end up, it is largely known that the central point for enhancement of the exploration and production of oil, natural gas and by products in Brazil implies rather the updating of the existing physical resources and acquisition of considerable number of new research and production implements, as the decision to dig and surface the pre-salt treasure is made effective. This is due to happen by the attraction of investments in exploration and production, in the equipment and services industrial sector, in the importation of organizational structures endowed with technologies admitted as not yet available in the country. But, what the government sees through the Brasilia’s fantasy glasses seems to be very different. T&B Petroleum 33

Wärtsilä Hamworthy

technology

Leads industry agenda for

flare gas recovery The World Bank has identified the recovery of gas currently flared or vented as one of the key ways to address the world’s increasing demand for fossil fuels. It is estimated that 150 billion cubic metres of gas is wasted annually from flaring. Some innovative companies are leading the environmental charge with flare gas recovery technology and will be pivotal in helping to address this global economic and environmental issue.

Bjørn Eiken Hartveit has a BSc from Bergen University College and an MSc from Telemark University College. He has more than 14 years’ experience in the field of flare gas recovery, working as process lead, including commissioning assistance, on flare gas recovery products. He was responsible for the Flare Gas Recovery product line within Hamworthy Oil & Gas Systems and is now working as Business Development Manager for the Gas Recovery business unit within Wärtsilä Ship Power.

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ärtsilä Hamworthy is one such company providing innovative technology to capture and handle flare gas safely. As well as the environmental benefits of capturing gas its flare gas recovery (FGR) system also extends the lifetime of the flare tips, saving maintenance costs on shutdown and flare tip replacement. The system comprises flare header isolation equipment, a gas recovery system and a reliable flare gas ignition system. Gas flared annually is equivalent to 25% of the United States’ gas consumption, 30% of the European Union’s gas consumption. FGR eliminates the need for continuous flaring of gas on oil and gas producing facilities and petrochemical plants, saving gas and reducing emissions of CO2 and NOx. The gas systems specialist, who has recently secured significant FGR systems’ contracts with leading operators including Petrobras, Statoil, BP and ConocoPhillips, considers the three key elements in an FGR system to be flare closure, recovery equipment and a reliable ignition system. Flaring gas has a global impact on climate change by adding about 400 million tons of CO2 in annual emissions. Emission of climate gases would substantially decrease as a result of closing the flare line during normal operation. The economic and environmental benefits speak for themselves, but it is also critical that potential users are aware of the technology behind available solutions, in order that real opportunities can be taken. In the first instance, flare recovery, the flare is “tight shut-off ” during normal operations though in some instances it may be partially shut off if there are any constraints in the process system limiting the recovery rate. In regard to recovery equipment, the allowable operation pressure in the flare system and the process tie-in pressure determine the recovery solution. A simple low cost crossover line may be used to recover the flare gas if the flare system can tolerate increased operation pressure and the process tie-in pressure is relatively low. Boosting equipment is required if this is not possible, including a blower, an ejector or a compressor, to boost the flare gas from the flare system pressure to the process tie-in pressure. It is also important when introducing FGR, that the flare gas is ignited by a reliable ignition system when reverting from recovery to flaring mode. An ignition system excluding the need for lit pilot burners is preferred. The ignition system should be initiated automatically upon demand. After installation of an FGR, the gas previously flared would be available as fuel gas or export gas and would generate extra income. When closing the flare line during normal operation the flare tip wear would significantly decrease, usually lasting the lifetime of the field.

Photo: Wärtsilä

A conventional flare system is used both for normal process releases and emergency releases. Emergency streams, such as those from pressure relief valves and depressurising systems must always have flow paths to the flare available at all times. The flare closing arrangement should always consist of a primary and a secondary path to the flare in order to maximise the safety aspect. The primary closing item should be a highly reliable, leak tight, quick opening fail open valve, normally referred to as a fast opening valve (FOV). An alternative to the FOV might be a water seal drum, but this solution is normally not recommended because of its narrow control range and the possibility for liquid freezing and liquid carry over. The FOV will open on high-pressure detection, as a result of compressor trips or in the event of any other given process and emergency shutdown signals from the control system. The flare isolation valve has a ‘fail open’ design to secure a free path to the flare at eventual failure such as loss of instrument air. The FOV is normally equipped with limit switches for both open and closed position for monitoring of the valve position. A secondary pressure protection device is by-passing the FOV providing a free path to the flare in the event that the FOV should fail to open on demand. The secondary closing items may be non re-closing items as bursting discs or buckling pin relief valve or pilot pressure safety valves. The pressure in the flare system including the flare kick-off drum is controlled to a predetermined operating pressure with the introduction of FGR. The flare system will operate at a constant pressure during flare gas recovery mode. The recovery equipment will, in general, be able to handle gases with fluctuations in composition, temperature and flow rates. FGR equipment, typically, is not designed for emergency flare loads. Normal rate to flare will typically wary widely and the recovery equipment will typically be designed to operate over a wide range of dynamically changing loads.

Wärtsilä Hamworthy ’s pellet type ignition system was introduced in 1995 with the pioneer FGR system in the North Sea. The installation of an FGR system would result in the flare normally being unlit - the consequence being that the ignition system had to be completely reliable. A review of systems at the time led to the conclusion that such reliability was unattainable and the first ignition system was developed to establish the required high reliability. The business has developed two generations of ignition systems. These are: • guided launching of ignition pellets by high pressure nitrogen; • guided launching of ignition pellets by low pressure air. The flare ignition system, protected by international patents, guarantees safe ignition of the flare whenever required. It is designed to ignite the flare gas exiting the flare tips in a reliable manner. The reliability of the flare ignition system is high enough to obviate the need for pilot burners which might be considered as an extra precaution for flares with a high H2S content. The fragment collector, located next to the flare tips is designed to withstand the maximum heat emitted at the maximum flaring case. Significantly, the system does not require any sensitive equipment like instruments, cables or other rigorous ignition or detection items near the flare tips. T&B Petroleum 33

coffee break

C o n f e i ta r i a C o lo m b o

Centennial Flavor

by Orlando Santos

Photos: Courtesy Colombo

T&B Petroleum 33

as the main ingredients), pastel de avelã com feijão branco (hazelnut pie with white beans), pastel de chocolate com pimenta (chocolate pie with pepper), among other goodies. His latest creation for Colombo is the pastel de caipirinha. All of this in addition to managing three kitchens to ensure a daily production of more than a thousand sweets and an equal number of salty snacks, all 100% handmade. And he does it without any surprises, with a team of 72 people helping him, and with the responsibility of keeping alive the centenary history of one of the city’s most traditional places. In 1988, the chef published his first book, A mágica da cozinha (The magic of the kitchen), which had five editions. In 2008, together with Sommelier Deise Novakoski, he published Enogastronomia (Enogastronomy), on the art of combining menus and wines. While leading Colombo, he still found time to review the books: Técnicas de confeitaria profissional (Professional confectionery techniques) and Técnicas de cozinha profissional (Professional kitchen techniques). In 2010, he translated Técnicas de padaria profissional (Professional bakery techniques). And he is ready to take out of the oven (or rather, the printing press) a true encyclopedia of make-believe-gastronomy. Yet, this chemical chef and writer has an even bigger dream: writing a story and recipe book on Colombo…but this is just a matter of time. Confeitaria Colombo Rua Gonçalves Dias, 32 – Centro/RJ; Tel.: (21) 2505-1500 Capacity: 350 seats; Monday through Saturday (closed on Sundays) Café do Forte (Colombo at Copacabana) Praça Coronel Eugênio Franco, 1 – Posto 6 – Copacabana/RJ Tel.: (21) 3201-4049 / 2247-6168 Services available for up to 50 guests, Tuesday through Friday

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indicadores meeting tn

September

17 to 18 - Brazil Desenvolvimento Humano Rio Local: Rio de Janeiro Phone: +55 11 3132-7250 infinityce@infinityce.com.br www.infinityce.com.br/rhrio

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

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

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

16 to 19 - Brazil Santos Offshore Local: Santos, SP Phone: +55 11 3060-5000 fernanda.sanz@reedalcantara.com.br www.santosoffshore.com.br

15 to 19 - Brazil ExpoNaval 2012 Local: Rio de janeiro Phone: +55 21 2283-2482 sobena@sobena.org.br www.sobena2012.org.br

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

November

December

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

4 to 5 - UAE Critical Issues Middle East Local: Dubai Phone: +971 4 457 5801 www.iadc.org

January - 2013

07 to 09 - Mexico NGV Global 2012 Local: Mexico City Phone: +39 335 1893249 info@ngv2012mexico.com www.ngv2012.com Send your release to: tnpetroleo@tnpetroleo.com.br

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28 to 30 - Argentina World Shale Series - Latin America Summit Local: Buenos Aires Phone: +44 20 79780752 mrambridge@thecwcgroup.com www.latam.world-shale.com

23 to 24 - The Netherlands Offshore Energy 2012 Local: Amsterdam Phone: +31 0 10 2092606 ao@navingo.com www.offshore-energy.biz

October

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

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

21 to 23 - Qatar Offshore Middle East Local: Doha, Qatar Phone: 1-918-831-9160 www.offshoremiddleeast.com

of Maria D’Assunção Costa, lawyer, Ph.D. in Energy from IEE/USP; author of Comentários à Lei do Petróleo (Comments on the Petroleum Law; published by Atlas); a partner in the consulting company Assunção Consultoria.

opinião opinion

Fifteen years of the Petroleum Law:

progress and outlook The regulatory milestone that put an end to the Brazilian oil and gas industry monopoly was published 15 years ago, with important achievements and numerous expectations regarding the next bids for exploration blocks.

he 15 years of the Petroleum Law, Federal Law 9.478, published on August 7, 1997, is celebrated with successes and mistakes in its implementation. The industry, regulation, contracts and the behavior of economic agents have changed considerably during these years. The Explanatory Memorandum of this law, translated in Bill 2.142/1996, justified this legislative proposal as “an important milestone: it demonstrates that, in Brazil, the oil industry has reached its maturity and is opening up to make it possible for new investments to be made and to allow for a balanced interaction between the State and private initiatives”. With this, the Union’s monopoly has been preserved, which is already guaranteed by the enactment of Constitutional Amendment 9/1995, for the exploration, production refining, ship transport, import and export, while maintaining the federal government’s control over Petrobras, but allowing initiatives by private companies to enter the scene to create competitiveness in all stages of the oil and natural gas industry. The Petroleum Law also establishes the Conselho Nacional de Política Energética (CNPE – the Brazilian National Council for Energy Policy), which laid down the energy policy principles and objectives. Although CNPE has not yet performed, adequately, the duties granted by this Law to the council represent an important milestone from the institutional standpoint. Additionally, if CNPE fulfills its duties in accordance with the Law, it will be able to contribute much more to meet the Brazilian market de-

mands with respect to energy security (fuel and electric power). Another relevant and innovative milestone provided by this Law was the creation of the Agência Nacional do Petróleo, Gás e Biocombustíveis (ANP – or Brazilian National Agency of Petroleum, Natural Gas and Biofuels) as the industry’s regulating and monitoring agency. Instituting this agency, and the bidding rounds it makes to grant concession contracts for the exploration and production of oil and natural gas, has completely changed the scenario for this sector of the Brazilian economy. Also important is mentioning the suffocation that regulatory agencies, especially ANP, suffered along these years, whether by the illegal contingencies of their revenues or by the lack of competitive civil-service exams and the recommendation of renowned technicians to direct them. In the end, however, it turns out to be good for Brazil, Brazilians and the industry. During this 15-year period, the Petroleum Law was amended 12 times as follows: the first was Law 9.986/2000 on human resources management; the second, Law 9.990/2000, postponed the period to release the prices of basic oil products; the third, Law 10.202/2001, to show the need for ANP to inform economic infractions to Conselho Administrativo de Defesa Econômica (Cade – the Brazilian Administrative Antitrust Council); the fourth, Law 10.848/2004, to amend the CNPE duties; the fifth, Law 10.871/2004, laid out the professions and the organization of occupations; the sixth, Law 11.907/2005, introduced biodiesel into the energy T&B Petroleum 33

feiras opinião e congressos framework; the seventh, Law 11.540/2007, laid out the Fundo Nacional de Desenvolvimento Científico e Tecnológico (FNDCT – the National Fund for Scientific and Technological Development); the eight, Law 11.909/2009, regulated the natural gas industry; the ninth, Law 11.921/2009, added new definitions; the tenth, Law 12.114/2009, created the Fundo Nacional sobre Mudanças do Clima (National Climate Change Fund); the eleventh, Law 12.351/2010, created a system to partition the production within the oil industry; and the twelfth, Law 12.490/2011, added Chapter IX-A which disciplined the biofuel industry (ethanol and biodiesel). This legislative framework is the enormous challenge that ANP faces to fulfill its duties, in addition to the unmotivated absence of the conceding authority to approve new bidding rounds to allow the participation of new agents in the oil and natural gas production, although CNPE has already manifested it is in favor of these bidding rounds. The justification to approve the new royalties legislation by the Legislative Branch to allow the new rounds are not protected by the legal terms currently in effect, since the areas proposed

by CNPE for the 11th round are not located in the pre-salt areas. These news rounds would allow for a number of new agents to come into play. This would strengthen the domestic industry, since the demands are already being depleted (as it has been extensively announced) due to the time lapse since the last round, in 2008. Consequently, postponing the 11th round indefinitely for no reason will not contribute to increase production and, therefore, to a greater oil and natural gas offer. In summary, it is necessary to celebrate these 15 years of the Petroleum Law because, silently, the application of this Law with the accomplishment of the ten bidding rounds promoted a revolution and a remarkable evolution in the national oil and natural gas industry, and allowed for self-sufficiency to be achieved and for the pre-salt layer to be discovered, all of which are facts that have forever changed the national scenario. Thus, congratulations to this youthful 15-year-old, but with the maturity of an adult, and to all the Brazilians that have contributed to its success, despite all of the tsunamis that had to be endured.

T&B Petroleum and TN Petróleo magazines

OTC and Brasil Offshore 2013 special issues opinião

PETRÓLEO I GÁS I BIOCOMBUSTÍVEIS

Petroquímica quer crescer com o pré-sal Um rio de energia Maior investimento de Cingapura no Brasil

Ano XIV • set/out 2012 • Nº 85 • www.tnpetroleo.com.br

E&P: prioridade permanente Panorama do setor petróleo no Brasil, por Wagner Freire

Edição especial

Entrevista exclusiva

Francisco Itzaina, presidente da Rolls-Royce para América do Sul

Energia offshore a todo gás!

opinion

Fifteen years of the Petroleum Law: progress and outlook,

OIL I GAS I BIOFUELS

by Maria D’Assunção Costa, lawyer, Ph.D. in Energy from IEE/USP

Seismic surveys: tracking down the oil Norway: a technological ocean crossing Rio Oil & Gas 2012 Preview: Three decades of international recognition

Year XIII • September 2012 • Issue 33 • www.tbpetroleum.com.br

Special: Petrobras Business Plan

PETROBRAS WILL INVEST

US$ 236.5 BILLION BY THE YEAR 2016

The current context of the Brazilian oil and gas industry, by Claudia Rabello

Special issue

Concession and sharing beyond semantics, by Antonio Bastos A. Sarmento

Leads industry agenda for flare gas recovery, by Bjørn Eiken Hartveit

Special interview:

Francisco Itzaina, president of Rolls-Royce for South America

Full-speed ahead for offshore energy

T&B Petroleum 33

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