TB #35_tasting

OIL I GAS I BIOFUELS

opinion

The talent gap: a serious headline

by Matthew Halle, Operations Manager at NES Global Talent

Hot News: Petrobras, Shell, Total, CNPC and CNOOC take Libra Coppe building knowledge for 50 years ANP 15 years: A continuous evolution Year XIV • Oct 2013 • Issue 35 • www.tbpetroleum.com.br

Special: Petrobras 60 Years

A GLIMPSE INTO N O TO THE FUTURE

ITI D

Ancorage offshore, by Martin Vlasblom, Jorn Boesten, Peter Davies and Sergio Leite A revolution in Reservoir Surveillance for subsea production environments, by Henry Edmundson Best practices of oil, gas and mining industry and risk mitigation, by Melissa S. Hersh and Claudio A. Pinho

Special issue

E g n i t s a t

OF THE OIL AND GAS INDUSTRY

Converting low quality gas into a valuable power source,

by Reetta Kaila and Peik Jansson

Reflection on the status of the Brazilian ports, by Rogério Caffaro Special interview:

Ozires Silva, former president of Embraer and Petrobras and dean of Unimonte, SP

We need to be enterprising and innovative

Leadership in Offshore Class and Related Services

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

Coffee Break

112

Uniko

Good Italian food in sophisticated surroundings article 88 Ancorage offshore, by Martin Vlasblom, Jorn Boesten, Peter Davies and Sergio Leite

98 A revolution in Reservoir Surveillance for subsea production environments, by Bernardo Mira 102 Best practices of oil, gas and mining industry and risk mitigation, by Melissa S. Hersh and Claudio A. Pinho 104 Converting low quality gas into a valuable power source, by Reetta Kaila and Peik Jansson 109 Brazilian O&G Concession Agreements,

by Priscila Uliana

110 Reflection on the status of the Brazilian ports,

by Rogério Caffaro

sections 2 editorial 4 hot news 66 events 70 professional profile

74 products and services 112 coffee break 114 meeting 115 opinion

EDITORIAL ADVISORY BOARD Affonso Vianna Junior Alexandre Castanhola Gurgel Antonio Ricardo Pimentel de Oliveira Bruno Musso Colin Foster David Zylbersztajn Eduardo Mezzalira Eraldo Montenegro Flávio Franceschetti Gary A. Logsdon Geor Thomas Erhart Gilberto Israel Ivan Leão Jean-Paul Terra Prates João Carlos S. Pacheco João Luiz de Deus Fernandes José Fantine Josué Rocha Luiz B. Rêgo Luiz Eduardo Braga Xavier Marcelo Costa Márcio Giannini Márcio Rocha Melo Marcius Ferrari Marco Aurélio Latgé Maria das Graças Silva Mário Jorge C. dos Santos Maurício B. Figueiredo Nathan Medeiros Paulo Buarque Guimarães Roberto Alfradique V. de Macedo Roberto Fainstein Ronaldo J. Alves Ronaldo Schubert Sampaio Rubens Langer Samuel Barbosa

Year XIV • Issue #35 • October 2013 Photos: SS P-55, P-58, TLWP P-61, FPSO P-62, FPSO P-63 and FPSO Cidade de Itajaí. Petrobras Agency

editorial

‘The work has just begun’

W

e’re in the last stretch of 2013 and yet with the feeling that the year hasn’t even begun since there is so much left to be done – with both things to celebrate and to reflect upon.

Petrobras celebrates its 60th anniversary, recalling the people who inspired it to overcome the challenges. The clear message is that the company is betting on its greatest asset: human capital. Its collaborators are ready to overcome the obstacles of the past year and close 2013 with better horizons – not only regarding company results, but also regarding the new goals.

This sentiment is shared by two institutions that have consolidated investments in research and development in Petrobras’ search for new technology: Coppe/UFRJ, completing 50 years, and also Cenpes.

In the end, it is this very topic covered in this special issue of TB Petroleum: two challenges and goals of the industry that have been evolving quickly, with the ambition of becoming a technology exporter, capable of competing on the international market.

This future vision is on the cover of this issue. We listened to almost 50 representatives from the most diverse areas along the oil and gas chain in our report: from the shipbuilders to lawyers, all of which have analyzed the regulatory framework of the industry.

These changes mean new challenges for the National Oil, Natural Gas and Biofuels Agency (ANP), which is celebrating 15 years as the industry regulator, and will have held no less than three bid rounds this year. Without a doubt, the one with the biggest impact is the bid round for the Pre-Salt, auctioning areas in Libra, having 8 to 12bn barrels of probable reserves.

Six days before this bid round, inaugurating the production sharing agreement, the government nominated the president of PPSA, the state company that will manage all contracts related to the Pre-Salt within this new framework agreement: Oswaldo Pedrosa, former Petrobras employee, who has been working in independent companies, was a technical choice.

The bid rounds will be mobilizing the productive chain from the north to the south of the country, since this endeavor represents a major volume of orders for the supply chain in the short- and mid-term. And these suppliers with be together at the next Offshore Technology Conference Brasil – OTC Brasil 2013, October 29 to 31 in Rio de Janeiro, an event that has consecrated Brazil as a new frontier in the oil and gas industry, since it is the only country that has hosted the event outside the USA. TB Petroleum – and this issue you hold in hand – will be there. After all, we are also part of this supply chain, although our business is information!

Benício Biz Executive Director of 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)

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

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DISTRIBUTION Benício Biz Editores Associados.

TRANSLATION Rick Toledano (55 21 9880-9905)

Member of ANATEC

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

The articles are the responsibility of the authors, not necessarily

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

representing the opinion of

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

directed to engineers, geologists,

SUBSCRIPTIONS Rodrigo Matias (21 3221-7503) matias@tnpetroleo.com.br PRINT Walprint Gráfica

the editors. T&B Petroleum is technicians, researchers and buyers in the oil industry.

editorial

T&B Petroleum 35

3

hot news

Photo: Agência Brasil

Petrobras, Shell, Total, CNPC and CNOOC take Libra

The consortium of Petrobras (10%), Shell (20%), Total (20%), CNPC (10%) and CNOOC (10%) won the 1st Pre-Salt Bid Round.

According to the Director-General of the National Oil, Gas and Biofuels Agency (ANP), Magda Chambriard, the 35-year contract will be signed by the winning companies and the Minister of Mines and Energy, Edson Lobão, within a month.

The consortium, which was the only one to present a bid for Libra, offered 41.65% “profit oil” (earned after investments are repaid). The signature bonus to be paid is R$ 15bn and the minimum exploratory investment is R$ 610,903,087.00. The ANP estimates that Libra will need between 12 and 18 large-scale platforms, and between 60 and 90 support vessels.

The regulatory agency also projects that Libra will generate R$ 300bn in royalties, and R$ 600bn in profit.

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Petrobras ended up with a 40% stake in the field - 30% was the minimum stake according to the rules.

Therefore, the company will have to pay R$ 6bn alone.

Eleven companies had registered for the bid round: CNOOC International Limited (China), China National Petroleum Corporation, CNPC (China), Ecopetrol (Colombia), Mitsui & Co. (Japan), ONGC Videsh (India), Petrogal (Portugal), Petrobras (Brazil), Petronas (Malaysia), Repsol/Sinopec (Spain/China), Shell (UK/Netherlands) and Total (France).

The director of the ANP revealed that Mitsui and Petronas had not deposited the bank guarantees necessary to participate in the bid round.

She further stated that British Petroleum (BP) had expressed interest in participating, but declined due to the weight of the fines the company must pay as a result of the leak in the Macondo field in 2010 in the Gulf of Mexico, making it cumbersome to participate in Libra, due to the size of the investment necessary.

ANP and government satisfied with the result – “The winning consortium is technically and financially capable,

bringing together five companies of the highest market value in the world. A bigger success is difficult to imagine”, stated Chambriard at the post-bid press conference.

The director-general stated that the bid round is an excellent opportunity of accelerating the industrial development of the country, as well as the levels of employment and income throughout the country. “75% of the pre-salt royalties will be allocated for education and 25% for health.

And we estimate that Libra alone will be able to generate almost R$ 300bn in royalties over 30 years of production”, she stated.

According to the Minister of Mines and Energy, Edison Lobão, the exploration of Libra is the beginning of a new era for Brazil. “Libra will be the turning point between the past and the future for the country’s oil industry”, highlighted the Minister.

The public tender for the exploration of Libra is Brazil’s first experience with the production sharing regime.

The 1,500 km² exploration area is located in the Santos Basin, almost 170 km off the coast of the state of Rio de Janeiro.

The Minister of Economy, Guido Mantega, also considered the bid round a success and state that government is satisfied with the result. “It was the biggest auction of its kind ever done in Brazil, and the biggest for the time being, afterwards we will have other bid rounds for the pre-salt in the future”, he said. According to Mantega, the group that comprised the consortium is “very well balanced”. “It is a public-private partnership with great companies that are capable of exploring this oil in the fastest time possible”.

Perspectives – The Libra field’s peak production is estimated at 1.4m barrels of oil per day in 10 to 15 years, according to Magda Chambriard.

The ANP estimates that Libra holds between 8 and 12 billion barrels of recoverable oil from an in situ volume between 26 and 42bn barrels of oil, which cannot all be accessed with today’s technology, according to estimates from Gaffney, Cline & Associates, the consulting firm contracted by the regulator.

Among the contractual obligations of the consortium are: drilling more wells, reservoir tests and demarcation of the field that is more than 1,500 km² - at a water depth of approximately 1,500 meters.

Another challenge ahead for the consortium is transferring the gas that will be produced. The estimates are that gas production reaches 20m³ meters/day, equal to two-thirds the current imports from Bolivia. However, since there is no gas pipeline in the area, Petrobras has already hinted that much of the gas produced from the pre-salt will be reinjected into the wells, to the dismay of some industry segments.

Next Bid Rounds – Chambriard pointed out that two or three more years will be needed before the next pre-salt auctions. “The size of Libra and the amount of resources and equipment necessary to make the field viable will make it impossible to hold another pre-salt round next year”, she explained.

Winning bid Petrobras.............................................. 10% Shell......................................................20% Total.......................................................20% CNPC..................................................... 10% CNOOC.................................................. 10% Profit oil (%)...................................... 41,65 Signature bonus......................... R$ 15 bn Minimum exploratory investment................ R$ 610.903.087,00 Minister Lobão indicated that there is still the chance of holding the 13ª bid round in 2014 and stated that the government is not changing the single-operator regime for the next bid rounds.

Shell and Total commemorate participations – In a press release just after the close of the bid round, Shell celebrated its stake in the Libra field. “The Libra oil discovery in Brazil is one of the largest deep water oil accumulations in the world. We look forward to applying Shell’s global deep water experience and technology, t o s uppo rt the profitable development of this exciting opportunity,” said Peter Voser, Chief Executive Officer, Royal Dutch Shell.

Shell holds a 20% stake in the consortium and will pay R$ 3bn equaling 20% of the total signature bonus of R$ 15bn – and will complete the minimum working program in to

declare it commercially viable by the end of 2017.

The general director of Total in Brasil, Denis Palluat de Besset, stated that resources of some US$ 1.4bn for its participation in the Libra field will come from France and be paid next month. Basset pointed out the company had been studying the possibility of participating in the bid round since it was first announced in the Request for Proposal. However, the final decision was taken after the members of the Pré-Sal Petróleo S.A. (PPSA), the state company that will manage the exploration of the pre-salt oil, had been chosen.

According to the executive, the French company’s interest in Brazil is great. After today’s auction, the company has a total of 13 blocks in Brazil, still in their exploratory phases. Globally, the company produces 2.3m barrels of oil equivalent oil, 1m of which are located in Africa.

See you at OTC 2014

5-8 May • Houston, Texas USA

T&B Petroleum 35

5

hot news

P-55 leaves Rio Grande shipyard and heads to the Campos Basin

Oil processing

180,000 barrels/day

Gas treatment

4 million m3/day

Local content

79%

Water treatment injection

48,000 m/ day

Electricity generation

100 MW

Water depth

1,800 m

Number of mooring lines

16

Number of risers 42

Photo: Divulgation

In the last October 06, the P-55 left the Rio Grande Shipyard 1 (Erg-1), Rio Grande (RS), after the modules had been joined together and the platform had been commissioned, with the completion of tests and inspections to obtain the necessary certificates.

The P-55 semi-submersible is one of nine new units to be installed in the oil fields in 2013, helping to increase oil production and achieve the production target of 2.75 million barrels per day which is forecast for 2017.

With the capacity to produce 180,000 barrels of oil and treat 4 million cubic meters of gas per day, the P-55 platform will come on stream in 2013 and is one of the world’s largest semi-submersibles and the largest built in Brazil.

The P-55, a project which is part of the Roncador Field Module 3 in the Campos Basin, will be anchored at a depth of about 1,800 meters and will connect to 17 wells, of which 11 are producer wells and six are water injectors. Oil and natural gas will be taken from the platform by underwater pipelines linked to the unit.

Construction work created about 5,000 direct jobs and 15,000 indirect jobs and reached a level of 79%

P-55 details

domestic content mainly due to the fact that it was built and joined together entirely in Brazil. The platform was built in two separate parts at the same time, the hull and topside, and then joined together later.

The unit’s hull was built at the Atlântico Sul Shipyard (EAS), in Pernambuco, and went to ERG-1 in Rio Grande (RS) to be finished. The deck and modules were installed at ERG-1 as well as integrating the platform’s systems. The Sulphate Removal and Gas Compression modules were also built there, although the CO2 Removal, Compression Booster and TEG

Crew

100 people

Total weight of platform

52,000 tons

Total area

approximately 10,000 m2

Total height

130 meters

Job creation

5,000 direct and 15,000 indirect

modules were built in Niterói (RJ) and taken to Rio Grande after completion.

Joining the two main parts of the platform together (deck and hull), which is called Deck Mating, is considered the most challenging part of building a unit and one of the largest ever carried out in the world, in terms of structure weight (17,000 tons) and height (at 47,2 meters).

The maneuver was carried out in the ERG-1 dry dock in June 2012. It will take approximately 12 days to tow the P-55 to the Campos Basin, when it will start anchoring procedures and will be connected the 17 wells.

Petrobras CEO most powerful non-US businesswoman The Fortune magazine has listed Petrobras CEO Graça Foster as the most powerful businesswoman in the world outside the United States.

Maria das Graças Foster is a chemical engineer with a robust career at Petrobras, Brazil’s state-run oil company. The oil giant has featured among the world’s largest companies on the Fortune magazine, ranking in 25th place this year with reported revenues of $144 6

T&B Petroleum 35

billion. It is planning to invest $236 billion by 2017.

Foster joined the organization as a trainee over 30 years ago and is now the company’s first female boss. She was appointed CEO in February 2012, after holding board offices at Petrobras Distribuidora (the company’s distribution

subsidiary) and the Gas and Power division.

This year alone, Graça Foster has been listed as Latin America’s top executive in the oil, gas and petrochemicals industry by the Institutional Investor magazine; Brazil’s most and one of the world’s 20 most powerful women in business on Forbes; and one of the 500 most powerful people in the world according to the Foreign Policy magazine.

Brazilian government announces new directors of state-run company in charge of pre-salt oil exploration The Pré-Sal Petróleo S.A. (“PPSA”), the Brazilian state-owned company in charge of managing the country’s pre-salt oil exploration, will be headed by engineer Oswaldo Pedrosa Junior.

He is currently the production manager of the oil company HRT, which administers the Polvo Field, in the state of Rio de Janeiro. The announcement was made on Monday (October 14) by minister of Mines and Energy Edison Lobão.

The minister also disclosed the names of other company directors: Edson Yoshihito Nakagawa, inspection and technical director; Renato de Matos, director of contract management; and Antônio Cláudio Pereira da Silva, director of management, control and finance.

The PPSA was founded through a contract in August this year, as a federal public company, whose shares are not for sale in the market. It is connected with the Ministry of Mines and Energy and its main purpose is to manage the sharing contracts. It will also represent the Union in partnerships established to carry out the activities agreed, but it will not take part in the exploration, production and trade of the pre-salt oil and gas. The company will have

Marco Antônio Martins Almeida (the secretary of oil and gas from the Ministry of Mines and Energy) as the president of the management council, and its budget for this year will be $6.8 million, which should be enough to meet its first needs.

The first pre-salt auction will be held next Monday (October 21) under the sharing regime. According to minister Lobão, two to four partnerships are expected to take part in the auction of the Libra Field, located in Rio de Janeiro.

A total of eleven companies have showed interest in participating in the competition, nine of which have made deposits as a guarantee for the transaction.

PPSA’s new president, Oswaldo Pedrosa Junior, stressed that interests must be shared by the company and its partners, Petrobras included: “We too have the obligation to inspect the pre-salt operator and ensure that the main objectives are met. Our greatest objective is to optimize the results for both the partners and the Union.”

Formation test in Farfan area in Sergipe-Alagoas Basin Petrobras announces it has completed a formation test in well 3-BRSA-1178D-SES (3-SES-176D), informally known as Farfan 1, the first to evaluate the production capacity of the accumulation located in the concession area BM-SEAL-11, block SEAL-M-426, in ultra deep waters of the Sergipe-Alagoas Basin.

The test evaluated 30 meters of turbidite sandstones formation and confirmed good reservoir characteristics featuring excellent productivity of good quality oil (38º API). The well is 104 km off the city of Aracaju, some 5 km from the discovery well (BRSA1083) and at a water depth of 2,476m.

This formation test, conducted at a depth of 5,609me, is a continuation of the operations carried out in the area as released to the market on August 9. Petrobras will proceed with other activities as soon as the Discovery Evaluation Plan submitted to Brazil’s National Petroleum, Natural Gas and Biofuels Agency (ANP) is approved. Petrobras is the operator of the consortium (60%) in partnership with IBV-BRASIL (40%).

Wärtsilä has been contracted to supply the engineering and equipment for a new power plant under construction in Indonesia. The Arun power plant with a 184 MW operating capacity will be the largest gas engine based peaking power plant in the country. The project is being

Illustration: Courtesy of Wärtsilä

Wärtsilä to supply 184 MW peaking gas power plant to Indonesia handled on a fast-track basis, and the plant is scheduled to be handed over and in full operation in March 2015. The contract was signed in the third quarter 2013. The power will be generated by a total of 19 Wärtsilä 34SG engines running on liquefied natural gas (LNG).

T&B Petroleum 35

7

special interview

We need to be

enterprising

and innovative

by Beatriz Cardoso

One of Brazil’s greatest challenges is to take this from theory to practice, according to Ozires Silva, former president of Embraer and Petrobras, two of Brazil’s most important companies that are internationally recognized for their inventive capacity.

“I still believe that within the fierce competition of the present day, Brazil can only achieve success through constant efforts to be enterprising and innovative,” said the aeronautical official and engineer who graduated from the Technological Institute of Aeronautics (ITA), and who at the age of 82 still works every day.

He is currently the dean of the Monte Serrat University Centre (UNIMONTE), a private institution of higher education located in Santos, São Paulo.

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In this exclusive interview with T&B Petroleum magazine, Ozires Silva, who is a leading exemplar of the entrepreneurial and innovative capacity of Brazilian engineers – not to mention the management of large corporations –, talks about the factors that limit innovation and, consequently, the generation of patents in Brazil. “In order for us to get out of this limiting situation, we need to encourage high-risk investment, as this provides the funding that encourages the researchers and inventors who go on to become teachers or students at our universities and, above all, because it positively impacts our manufacturing companies.”

Silva believes that being one of the seven largest economies in the world, Brazil is yet to gain an international position that truly reflects its scale. “We have to hold on to the conviction that Brazil, a country of continental proportions, cannot continue along its current standards. We need to improve our managerial and productive capacity and widen our presence in countries across the world, just like many other nations that are managing to exceed expectations in terms of sales among their own citizens and international consumers.”

T&B Petroleum – You are a symbol of entrepreneurship, cited as a visionary who believed in Brazilian inventiveness and technological capacity, which was proven with the founding of Embraer that is today one of the most important companies in the country. What was it like to create something innovating and enterprising in a country that wasn’t even aware of these concepts in the 1970s? Would this be easier to do nowadays?

Ozires Silva – I don’t see myself as a symbol of entrepreneurship. On the contrary, the founding and development of Embraer came about thanks to the work of an initially small yet competent team that was able to gain a fair degree of trust and support from the Brazilian Air Force, forging a genuine relationship between the private sector and the government. This happens with long-term ventures in a lot of technically and technologically advanced countries, where companies need to move forward with newly acquired knowledge and require a lot of human and financial resources. Unable to find support in their traditional economic systems, they need to find ways to break with the past, and with the cooperation of the government they can start to produce something new.

Ozires Silva, former president of Embraer and Petrobras and dean of Unimonte, SP

In the complex world full of sophisticated products in which we live, we need to educate our citizens well on a basic level, and above all, on a

Photos: Divulgation

higher level

Why is it still hard to start business in Brazil? What is the county’s greatest challenge in positioning itself as an enterprising country if it has already dedicated itself to areas involving advanced technology, such as aeronautics, oil and gas and telecommunications? If our problem isn’t technology, could it be basic education?

This problem stems from a combination of circumstances related to

the deeply-rooted assumption over many decades (or centuries) that we hold a position of inferiority – based more on belief than on any real evidence –, which leads Brazilian consumers to consistently give preference to imported products over those that are manufactured domestically. Yes, our problems begin with the unreliability of our basic education system, and this extends all the way to higher educa-

tion! In the complex world full of sophisticated products in which we live, we need to educate our citizens well on a basic level, and above all, on a higher level, which is fundamental in order to understand and produce the products of high added value that succeed in the modern world.

When Embraer and its celebrated victory in the highly-competitive aeronautical industry (successfully producing its aeroplanes on the international market, which are amongst the most complex available) are cited, it is clear that this prominent position was achieved thanks to the founding of the ITA in 1950 in São José dos Campos.

Without this high-quality institution, created and maintained by the Brazilian Aeronautical Command, we would never have heard of Embraer and its success.

T&B Petroleum 35

9

petrobras 60 years

A glimpse into

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to the future of the oil and gas industry

by Beatriz Cardoso, Karolyna Gomes, Maria Fernanda Romero and Rodrigo Miguez

Photo: Stéferson Faria, Petrobras Agency

The 60 years that Petrobras has been in operation mirror the history of Brazil’s oil and gas industry in general, provoking a deeper reflection on the challenges and expectations associated with this huge production chain that is currently driving a significant part of the country’s economy.

Aware of the role it plays both nationally and internationally, Petrobras has recently started to look back over its history and is using various media channels to reveal to the Brazilian public what inspires it to be the giant that everyone admires, regardless of any questions that may be asked about the company’s management or performance.

Understanding that in addition to this historical overview, it is also important to reflect on the expectations of both the oil and offshore production chain and society as a whole, T&B Petroleum ‘prospected and extracted’ over 50 testimonials from stakeholders in this market to discover their vision of this sector’s future. For all those that participated, the greatest challenge without a doubt will be to guarantee sustainability after the unprecedented level of development achieved over the last decade. So we will leave it to them to discuss this issue!

T&B Petroleum 35 17

petrobras 60 years

B

razilian oil and natural gas industry figures leave no room for doubt regarding this sector ’s scale within the domestic economy and on the international market, such is the volume of demand and the potential of emerging conventional and unconventional hydrocarbon reserves.

According to data from the National Petroleum, Natural Gas and Bio-fuel Agency (ANP), domestic production was at 2.468 million barrels of oil equivalent per day (boed) in July, of which 1.974 million barrels/day were of oil and 78.5 million m³ per day (m³/day) were of natural gas.

The oil fields operated by Petrobras provide around 93% of this oil and natural gas, with 91.4% of total oil production and 73.1% of natural gas being extracted from 784 offshore wells, and the rest being produced by 8,266 onshore wells. There are 311 concessions responsible for this production, operated by 25 companies in total, 81 of which are offshore and 230 onshore.

In the five years since the first oil was extracted from the Jubarte field in the north of the Campos Basin, off the coast of Espírito Santo State, pre-salt production jumped from 18,000 barrels from just one well to 358,800 boed in July 2013 – producing 296,400 b/day of oil and 99 million m³/day of natural gas.

July’s production came from 25 wells located in the Baleia Azul, Caratinga, Barracuda, Jubarte, Linguado, Lula, Marlim, Voador, Marlim Leste, Pampo, Pirambu, Sapinhoá and Trilha fields spread throughout the Campos and Santos basins.

And his doesn’t even include the production obtained during the

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Financial data Capital stock........................................................................................................................................ R$ 205.4 billion Number of shareholders.................................................................................................................................1 million Net profit in 2012 ..............................................................................................................................R$ 21.182 billion Net profit in the 1st semester of 2013 ..........................................................................................R$ 13.894 billion Number of shares representing capital.......................................................................................................13 billion Revenues and sales in 2012.............................................................................................................. R$ 281.4 billion Revenues and sales in the 1st semester of 2013...........................................................................R$ 146.2 billion Investment in 2012............................................................................................................................... R$ 84.1 billion Investment in the 1st semester of 2013............................................................................................. R$ 44.1 billion Expected total investment from 2013 to 2017 in dollar..............................................................US$ 236.7 billion Expected investment in exploration and production from 2013 to 201.................................. US$ 147.5 billion Extraction cost per barrel (2012 national average)...................................................................................R$ 27.22 Extraction cost per barrel (average for the 1st semester of 2013).........................................................R$ 30.37 Payment of royalties and Government Participation in 2012........................................................ R$ 31.3 billion Contribution to the country in 2012 (taxes, fees and social contributions.....................................R$ 66 billion Contributions to the country in the 1st semester of 2013 (taxes, fees and social contributions)...... R$ 36 billion Registered suppliers............................................................................................................................................ 6,000

Reserves and production Brazilian and overseas reserves (SPE criterion) on 12/31/2012......................................................16.440 bboe Brazilian reserves (SPE criterion) on 12/31/2012............................................................................... 15.729 bboe Average production in Brazil and overseas in 2012.........................................................................2.598 mboe/d Average production in Brazil and overseas in the 1st semester of 2013.......................................2.553 mboe/d Average production in Brazil in 2012..................................................................................................2.355 mboe/d Average production in Brazil in the 1st semester of 2013............................................................... 2.315 mboe/d Average production in Brazil in 2012...................................................................................................... 1.980 mbpd Average production in Brazil in the 1st semester of 2013....................................................................1.921 mbpd Petrobras’ total overseas production (oil and gas) in 2012...........................................................236,000 boe/d Petrobras’ total overseas production (oil and gas) in the 1st semester of 2013.........................232,000 boe/d Record pre-salt production on 6/22/2013...........................................................................................326,000 bpd Record daily oil production in Brazil – 27/12/2010 ............................................................................ 2.256 mbpd Record deepwater production (Lula oil field)............................................................................................. 2,140 m Productive wells in operation in Brazil and abroad.......................................................................................15,500 Expected production of oil and gas in 2020 in Brazil and overseas................................................. 5.2 mboe/d Expected production of oil and gas in 2017 in Brazil and overseas.................................................. 3.4 mboe/d Exports of oil and its derivatives in 2012.............................................................................................548,000 bpd Exports of oil and its derivatives in the 1st semester of 2013...........................................................383,000 bpd

various long-term tests performed

by Petrobras and its partners over recent years in a range of locations to define field development models.

Onshore, mature basins such as Espírito Santo, Potiguar, Recôncavo, Sergipe and Alagoas generated 172,800 boed, producing 140,900 b/day of oil and 5.1 million m³/day of natural gas. In addition, fields under marginal accumulation contracts produced a total of 74.5 b/day of oil and 2,200 m³/day of natural gas.

Brazil steps on the gas Oil production may still not have returned to previous levels after the fall in efficiency of offshore assets in the Campos Basin, but the volume of natural gas being produced has undergone unprecedented changes. Firstly there is the amount of gas being used in the Brazilian power grid: this has more than doubled over the past decade, increasing from 5.4% in 2000 to 11.5% in 2012.

According to the Ministry of Mines and Energy, domestic

natural gas production has increased by 20% over the past five years, jumping from 59.16 million m³/day (the average in 2008) to 70.58 (the average in 2012). In the first semester of this year it leapt up again, increasing from 75.85 million m³/day in January to 79.99 m³/day in June – the nation average of 77.7 million m³/day in the first semester representing an increase of 10%.

There is more nationally-produced gas available on the market, even after subtracting the volumes used for reinjection during the extraction process, flaring and loss, consumption in exploration and production (E&P) units for power generation, transport and storage and absorption into natural gas processing units (NGPUs) to produce liquefied petroleum gas (LPG) and industrial gas (C5+).

Brazil’s supply of natural gas went up by 37% over five years from an average of 29.88 million m³/day in 2008 to 39.73 million m³/day in 2012. In 2013, this rise was even more significant: over six months it increased from 42.78 to 46.87 million m³/day. Together with the country’s gas imports, which come mainly from Bolivia and Argentina, total supply had already reached 96.05 million m³/day in May of this year, a historical record that demonstrates the evolution of the domestic energy market.

We continue to import 50% of the gas we consume as demand increases, thanks to the integration of the natural gas value chain.

In June, the industrial (44%), automobile (5.5%), residential (1.0%), commercial (0.8%), power generation (45.9%) and cogeneration (2.7%) sectors, among others, consumed a total of 94.68 million m³/day. National the supply: consumption ratio is expected to triple to 130 million m³/day by 2025.

Photo: Petrobras Agency

A glimpse into to the future of the oil and gas industry

Production platforms in operation Onshore drill rigs Offshore drill rigs Total number of onshore and offshore drills

140 35 74 137

Reserves in demand Since the declarations of commerciality for the Sapinhoá field in 2011 and the Piracaba and Baúna fields (both in the Santos Basin cluster) in 2012, no new declarations for pre-salt assets have been made. Even so, there has been a significant increase in proven Brazilian reserves, which in December 2012 amounted to a total of 14.524 billion barrels of oil and 463.430 billion m³ of natural gas.

These figures grow when the production expected from probable and possible reserves is taken into account, which total 25.215 billion barrels of oil and 825 billion m³ of natural gas. In addition, these figures do not take into account reserves that are not recognized by the ANP, which includes fields without an approved development plan and those that had not gone into production by the end of 2012. They contain over 3.34 billion barrels of oil (790.5 million proven) and another 935 billion m³ of natural gas (22.75 billion m³ proven).

Petrobras has a crucial part to play in this scenario, due to all of the projects it has underway in the upstream (exploration and production), downstream (refinement and distribution) and midstream (transport and logistics) segments, which mobilize the whole oil and gas production chain, including the shipping industry.

The US$236.7 billion investment projected in the company’s 2013-2017 business plan will probably be cut during the next revision, although not significantly according to the government’s 2014 Annual Budget Law project that was submitted to the National Congress on 29 August.

Minister of Planning, Budget and Management Miriam Belchior has predicted an R$800 million reduction in Petrobras’ domestic investment and a cut of no less than R$4 billion in subsidiaries and overseas projects.

This reduction is also due to factors other than divestment, such as the fact that a number projects and ventures are already at an advanced stage and demand fewer resources, as is the case with the Abreu e Lima Refinery in Pernambuco State, projects to modernize the company’s facilities and the construction of new oil exploration units (delivered this year).

The minister assured that Petrobras’ investments in 2014 of around R$78 billion (versus R$78.8 in 2013) would help the company to maintain its position as holder of the “second largest investment portfolio of all the international oil companies, including its gigantic investment that will be used to overcome the challenge of extracting the pre-salt reserves”.

T&B Petroleum 35 19

petrobras 60 years

A 30-year horizon Looking back over an unparalleled decade in the history of the Brazilian oil industry, one of the main benchmarks of the past 10 years that has mobilized the whole oil and gas production chain is the recovery of the shipping industry.

28

T&B Petroleum 35

Photo: Petrobras Agency

Photo: Courtesy of Keppel Fels

I

nconceivable at the turn of the new century, the reactivation, growth and expansion of shipping industry after an extended period of stagnation is now an indisputable reality, despite the challenges that still have to overcome to ensure the sustainability of this sector, which today directly employs over 70,000 workers. “We have achieved in 10 years what takes many countries twice as long,” says Ariovaldo Rocha, president of the Syndicate of the Naval Industry and Offshore Construction and Repair (SINAVAL). “And the Brazilian shipping industry is become more competitive every year,” he adds.

The director affirms that all shipping nations maintain their industries as state projects that receive support from the government. “Incentives, subsidies and repayable funds are targeted at the technological development of this industry. Governments pay for workforce training in shipyards, universities and technical collages,” he says, guaranteeing that Brazil’s shipbuilding industry is growing in the right direction.

Rocha explains that at the end of the 1990s, Petrobras was concerned it would be totally dependent on international shipyards,

petrobras 60 years

Local technology solutions Domestic companies and foreign companies in Brazil are combining their expertise through partnerships that seek to develop cutting-edge technologies to meet local challenges with the perspective of making them available on the international market.

F

or over two decades, the transfer of technology has been the biggest battle for Brazilian industry across a whole range of segments. This issue gained new importance with the expansion of Brazil’s oil and gas industry, which has been leveraging the expansion of both local production and research and development in the country.

“One of the biggest contributions from Petrobras and the oil sector was the boost they gave to the national supply chain so it could seek solutions using nationallyproduced technology,” says commercial and marketing director of the multinational firm FMC Technologies, José Mauro Ferreira.

He observes that there is a lot of activity as a result of the demand generated, which is boosting the growth of the country’s oil and gas industry. “The majority of investments go into deepwater exploration, generating more work for companies in the sector and creating more jobs and business opportunities within the supply chain,” he says, then citing the Oil and Water Subsea Separator (SSAO) as an example of this process, developed by FMC in Brazil in partnership with Petrobras.

This process enhances both oil recovery and long-distance production by reducing the amount of water that reaches the platform and amplifying oil treatment capacity, as well as simplifying offshore platform production systems. “This is the first model in the world for deepwater

34

T&B Petroleum 35

exploration,” emphasises Ferreira.

He believes that industry’s biggest challenge now is to increase the scale of demand in order to leverage domestic production, with the introduction of new technological solutions.

“Combining the timescales we have meet Petrobras’ requirements with workforce training is also a challenge. Demand has grown, and the volume of work we are receiving is a lot for our limited workforce”, he points out. “Our priority is to make sure we can meet demand rather than developing technology,” he says, adding that some solutions still need to be developed in the near future for other segments.

“Such as addressing logistical problems for distant production areas, for example.”

Ferreira points out that one of the biggest challenges in terms of local content is expanding the existing supply chain, increasing its capacity and encouraging the participation of foreign suppliers. “Foreign suppliers say they are concerned with taxes and exchange rates and that there is no way of evaluating the impact that these can have on its business,” he explains. He sees the arrival of new operators wanting to acquire blocks in the ANP bids as a big opportunity, generating more business for Brazilian industry. “On top of all of the activity coming from Petrobras duplicating its production, the new

operators are going to generate an increase in demand... for local content,” he says.

He emphasises that the culture of cooperation between Petrobras and the industry, which resulted in the implantation of a huge technological park in Rio de Janeiro, has been in place since the beginning of the company’s history. “The pre-salt is a result of this culture and represents new challenges and solutions.

We now need to think up new models in which part of the investment into R&D could be directed towards research centres, via thematic networks, for example,” he suggests.

Investment in expansion Another of Petrobras’ technology partners, the Norwegian company Aker Solutions, also believes that the Brazilian oil and gas industry is able to take advantage of the opportunities generated by the pre-salt, as well as the increase in production from existing oil fields, and that it will support the country in becoming a producer and exporter of both oil and technology.

“If this were not the case, we wouldn’t be investing huge resources in two new international-standard plants with an enormous production capacity,” says Regional President for Aker Solutions in Brazil Luis Araújo. “We hope to use our subsea equipment factory in Curiti-

petrobras 60 years

National engineering reaffirms its excellence

Brazilian engineering has passed through phases of both euphoria and of despair along the past six decades, but it quite literally supported the construction of Brazil and is now present in large projects across the world.

T

he country ’s engineering sector is still inextricably linked to the history of the Brazilian oil and gas industry.

Although a range of professionals have helped the oil industry to reach its position of leadership on the world stage, the company is continuously referred to as a “company of engineers”, and it employs engineers from a variety of areas, including those specialized in geology who are studying at the Petrobras University.

Many of the professionals enrolled at the university are employed by the country’s large engineering companies. Through these companies, Brazil has been reaffirming its excellence and capacity to reinvent itself and has been developing hundreds of projects in the oil and gas production chain, including the shipping and offshore industry.

From concept design and basic engineering to implementation, commissioning and the assisted operation of large ventures, a legion of civil, marine, chemical, electrical, electronic, mechanical, production, occupational and maintenance engineers, among other specialists of this science, are working to ensure the operability of the industry, today responsible for a significant portion of Brazil’s GDP, both onshore in industrial

42

T&B Petroleum 35

plants, pipeline networks, terminals and shipyards, and in offshore operations.

On standby “The Brazilian support and service provision industry for oil and gas activities is prepared for the production targets announced

by Petrobras,” says Felipe Lima, CEO of Promon Engenharia, a

Brazilian company with its name stamped on various projects in the energy sector.

Revisiting the list of challenges required for the production chain, the CEO also defends “addressing the issue of price par-

A pipeline to the future Although there are many market challenges to be overcome, technological difficulties stand out more due to the fact that the complications associated with exploration and production are increasing as the “easy oil” seems to have been exhausted. This applies to all stages of the oil chain, including one that is strategic in getting the final product onto the consumer market: transport.

And when we talk about transport, what comes to mind are the oil tankers and the immense network of onshore and offshore pipelines that the expansion of the oil and gas industry will require.

The challenges in this area start with the materials that the pipelines are made of. “We need new materials that are lighter, more resistant and economically viable, which contribute to the longevity and increased integrity of our production, transport and processing facilities, as well as

the development of equipment for subsea operations, with the aim of reducing platform costs and increasing operational safety,” says Raimar van den Bylaardt, president of the Pipeline Technology Centre (CTDUT).

Van den Bylaardt says the construction of offshore pipelines is one of the challenges to be faced and for which the CTDUT – created and supported by companies in the sector, such as Petrobras – has been preparing itself for. The company provides the technological support required by the companies that work in this sector.

“Petrobras has a lot to offer in this sense, given its expertise in the field of materials, product and process technologies, and by contributing to increasing local content (the national

petrobras 60 years

Universities:

Key partnerships The second largest investor in Research and Development (R&D) in the energy sector worldwide, with a total 2011 value of US$1.4Bn (1% of gross revenue) and behind only Petrochina with US$2Bn (0.7% of gross revenue), Petrobras

T

he importance of these partnerships can be seen in figures: Currently the company has 49 knowledge networks, involving more than 100 institutions across 19 Brazilian states.

“Co-operation is always desirable and Petrobras has helped create many partnerships between Brazilian universities through knowledge networks” affirmed Sergio A. B. da Fontoura, Professor of Petroleum Engineering at PUC-Rio. According to him, PUC-Rio (which has already turned around 450 engineers from various backgrounds into petroleum engineers) started a partnership with Petrobras in the 1970s when the research and development centre (Cenpes) started integrating university research centres into the company’s strategy planning.

“The partnership worked due to two factors: direct research funding, which allowed the implanting of infrastructure that was essential and compatible for development, and secondly aligning itself with the technological challenges of developing the oil and gas industry in Brazil”, he said.

Fontoura cites the series of deep water capacity (Procap) and

46

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Photo: Divulgation

has at least 35 years of R&D partnerships with Brazilian universities.

advanced petroleum recuperation (Pravap) as successes in acquiring technical knowledge. “These programmes were designed for challenges, and the Brazilian universities contributed greatly to the acquisition of the necessary knowledge, and greatly benefitted from the partnership with Petrobras by reaching maturity in R&D and gaining respect abroad” he noted.

The technical-scientific challenges continue to grow, considering the complex geological scenarios to be faced in exploring Brazilian reserves, mainly the pre-salt and shale gas sources. “The great contribution over the next few years will be the continuation of what has been, and still is being done today: Working together, sharing the challenges. There is a lot of work ahead and the Petrobrasuniversity partnerships are adapting

to this year after year, making them stronger”, stressed Fontoura.

However, in the professor ’s opinion, there is a great challenge in building up human resources. “Brazilian universities are working at their operational limits to train the skilled professionals in the science and technology areas. You must understand that other sectors of the Brazilian economy have grown significantly and this increases student options”, he commented, citing that the number of civil engineering students has grown more than that of petroleum engineering.

Fontoura also called attention to the continuity of technological types of research project. “The knowledge generated in research projects must continue in technology and product creation projects. In generating more patents and products, a partnership with the private sector should look at other partnerships, not necessarily with universities, but technological area businesses that could start up in universities.” He cites Norway as an example of success, “There, Statoil is one of the forces behind the creation of technology that starts with research project funding and after moves onto the next stage. Here in Brazil, there are mechanisms for innovation implemented by funding bodies, but there is still the question of property rights over the results of R&D projects in the oil and gas area.”

Photos: Divulgation Coppe

coppe 50 years

LabOceano

LNCD

Bioethanol

Hyperbaric camera

Coppe Super Computer 48

T&B Petroleum 35

LNCD

LabSonar

NIFD

Coppe building knowledge

for 50 years

by Rodrigo Miguez

Benchmark for the teaching and research of engineering in Brazil and abroad, the Alberto Luiz Coimbra Graduate School and Engineering Research Institute (COPPE) at the Federal University of Rio de Janeiro (UFRJ) has helped to establish postgraduate study in Brazil. Founded in 1963 by the engineer Alberto Luiz Coimbra, over the past five decades it has grown to become the largest engineering teaching and research centre in Latin America.

W

ith over 13,000 graduates enrolled on its 13 master’s and doctorate programmes, the excellence of the teaching at COPPE makes it one of the most sought after institutions by the country’s academics, especially in the area of engineering.

According the institution’s director, Luiz Pinguelli Rosa, COPPE uses the same model for its postgraduate courses as that used across the whole of Brazil, at it has proven to be both successful and pioneering. Rosa indicates the integration of research and teaching as one of the institution’s positive points, bringing together teachers, researchers and postgraduate students from a range of different programmes.

Rosa believes that another factor that has guaranteed COPPE’s success over such a short time is the agility of its processes, some-

thing that is not often found at Brazilian universities. He criticizes the bureaucracy that obstructs people in their work at UFRJ and other public universities in Brazil.

COPPE’s success overseas is a result of its laboratories that are constantly being installed. The institution currently has 124 of these, in which its 88 researchers develop solutions for both the oil and gas industry and the general public with their research into urban mobility and bio-fuels.

The importance of these laboratories was clear from the start, when the Membrane Separation Processes Laboratory (PEQ) that was opened 45 years ago signed the institution’s first contract with a private company, Petrobras, in 1968. To give an idea of how the institution has grown, by 2012 COPPE had signed 12,700 contracts with private companies and government agencies.

To ensure the continuation of its research programmes and in commemoration of its 50th anniversary, COPPE has inaugurated three laboratories dedicated to

research in the area of oil and gas distribution and linked to its Mechanical Engineering Programme (PEM). These form part of the Interdisciplinary Centre for Fluid Dynamics (NIDF) and are located within an area covering 5,400 m² in Technology Centre 2 (CT2) on the UFRJ campus.

This is the first centre in the country to bring together a variety of laboratories in the same location to study oil and gas distribution in an integrated manner. The NIDF comprises the Compact Separator Laboratory (LSC), the Multiphase Pipeline Distribution Laboratory (LEMT) and the Well Engineering Technology Laboratory (LTEP), where research and teaching related to drilling, oil well completion and intervention, artificial lift activities and primary separation systems take place.

The results of this research could help Petrobras to increase oil and gas production by reducing the time it takes to separate oil from water, for example. The work now being developed in the new laboratories is aimed towards seekT&B Petroleum 35 49

coppe 50 years

Researching for the future of

our cities

T

o make the most of the 8,500 km of Brazil’s coastline, COPPE is carrying out tests in partnership with Tractebel at its recently constructed plant in Pécem port, Ceará, which will use the movement of oceanic waves to generate electricity.

Conceived and designed at LTS-COPPE, the plant has already placed Brazil among a select group of countries, including Norway, that are testing different technologies for generating wave power on a large scale and at feasible costs.

One thing that sets Brazilian technology apart is the use of highpressure systems to drive turbines and generators, a concept that was developed and patented by COPPE. The energetic potential of waves in Brazil has been estimated at around 87 gigawatts, and tests indicate that it would be possible to convert 20% of this into electricity, equivalent to 17% of the country’s total capacity.

Another important technology that is being developed at COPPE’s Bioethanol Laboratory is second generation ethanol, or 2G Ethanol, produced using biomass from waste products from agribusiness. 2G Ethanol could be the solution for the supply problem that occurs with normal ethanol at some times of the year, as only a part of its energy is obtained during sugarcane processing.

Therefore, researchers at COPPE are developing this new ethanol via a

54

T&B Petroleum 35

Photos: Divulgation

Over recent years, COPPE has directed its efforts towards developing technology to meet the needs of industry and the general public. For this reason, the university is involved in three projects outside the area of oil and gas that have the potential to make significant change in their respective areas.

Maglev Cobra hydrolysis process in which cellulose molecules are ‘broken’ and glucose from bagasse and sugarcane straw is extracted, which after fermentation is converted into alcohol. The residues of this process, rich in lignin, can be used in power plants for the cogeneration of energy, a technology that is already in used in the country.

Another of COPPE’s contributions is the development of membranes that will be used in the various stages of separation and concentration of the biomaterials involved in the process.

One of the benefits of this new fuel is its production, which can be carried out in plants, avoiding the need to transport bagasse sugarcane over long distances. However, the high costs involved are still an obstacle to 2D ethanol entering the market.

Finally, one of the great innovations that is due to come out of COPPE’s laboratories onto the UFRJ campus this year is the Mag-

lev Cobra, the first urban passenger transport system to use magnetic levitation. With construction work already underway, the Maglev Cobra will be used in its test phase to offer transport between Technology Centres 1 and 2.

Operating using superconductors and permanent magnets, the project shows that there are viable alternatives to the highly polluting and expensive transport systems we use today, such as subways and buses. Superconducting levitation works using stable forces that dispel the need for complex control and safety devices to guarantee the train’s stability.

With a modular design and the capacity to be expanded according to demand, the Maglev Cobra was designed to run at 70 km an hour and is one of COPPE/UFRJ’s big bets for the future of urban transport in large Brazilian cities.

anp 15 years

A continuous

by Beatriz Cardoso, Karolyna Gomes and Rodrigo Miguez

Responsible for regulating the sector that provides around 12% of Brazil’s GDP, the National Petroleum, Natural Gas and Bio-fuel Agency (ANP) has been active for 15 years and is now seeking to reinvent itself to be able to lead a market for which the rules have changed so significantly over recent years.

56

T&B Petroleum 35

Photos: T&B Petroleum

evolution

R

esponsible for regulating the sector that provides around 12% of Brazil’s GDP, the National Petroleum, Natural Gas and Bio-fuel Agency (ANP) has been active for 15 years and is now seeking to reinvent itself to be able to lead a market for which the rules have changed so significantly over recent years.

The first pre-salt bidding round marks the beginning of a

new phase for the ANP, which will start to manage its first production sharing contract within a regulatory framework that has been substantially altered in the five years since the discovery of the pre-salt reserves.

The regulator has until now been responsible for administrating concession contracts, but will now have to manage a multiple system, over a series of 10 auc-

tions, in which production sharing and onerous transfer to Petrobras will compete with old and traditional signed contracts.

This does not concern Director General of the ANP Magda Chambriard, however, who explains that foreign companies T&B Petroleum 35 57

anp 15 years

Bidding Rounds

Round 1

Round 2

Round 3

Round 4

Round 5

Round 6

Round 7

Round 9

Round 10

1999

2000

2001

2002

2003

2004

2005*

2007

2008

Sedimentary Basins

Round 11 2013

8

9

12

18

9

12

14

9

7

11

Blocks Auctioned

27

23

53

54

908

913

1.134

271

130

289

Blocks Acquired

142

12

21

34

21

101

154

251

117

54

Onshore Blocks Acquired

0

9

7

10

20

89

210

65

54

87

Offshore Blocks Acquired

12

12

27

11

81

65

41

52

0

55

Ratio of Blocks Acquired/ Blocks Auctioned

44.44%

91.30%

64.15%

38.89%

11.12%

16.87%

22.13%

43.17%

41.54%

49.13%

Area Auctioned (Km²)

132,178

59,271

89,823

144,106

162,392

202,739

397,600

73,079

70,371

155,813

Area Acquired (km )

100,372

54,660

48,074

48,629

25,289

21,951

39,657

194,651

45,614

48,030

Onshore Area Acquired

0

10,227

2,363

10,620

697

2,846

186,916

32,195

48,030

64,998

Offshore Area Acquired

54,660

37,847

46,266

14,669

21,254

36,811

7,735

13,419

0

35,374

4,895

2,577

1,695

2,669

179

222

351

270

541

539

15

2

19

33

807

759

883

154

76

147

²

Offshore Area Acquired (Km²) Blocks not Acquired

77,518

11,197

41,194

118,817

140,441

163,082

202,949

27,465

22,341

55,441

Signing Bonus (R$)

Area not Acquired

321,656,637

468,259,069

594,944,023

92,377,971

27,448,493

665,196,028

1,085,802,800

2,109,408,831

89,406,927

2,823,205,650

Signing Bonus (U$)

180,919,420

261,670,338

240,794,910

33,883,387

9,153,312

222,061,400

484,070,677

1,140,652,588

37,942,169

1,407,591,190

N/A

N/A

N/A

N/A

33,671

131,137

195,741

169,436

128,707

400,088

PEM (UT) PEM (R$)

N/A

N/A

N/A

N/A

363,504,000

2,046,787,422

1,797,411,000

1,367,382,000

611,154,000

6,902,399,200

PEM (million U$)

N/A

N/A

N/A

N/A

121,218,508

683,276,000

801,318,582

739,405,180

259,359,192

3,441,391,634

Average Local Content – Exploration Stage

25%

42%

28%

39%

79%

86%

74%

69%

79%

62.32%

Average Local Content – Development and Production Stage

27%

48%

40%

54%

86%

89%

81%

77%

84%

75.96%

Companies that showed an interest

58

49

46

35

18

30

52

74

52

71

Companies that paid Participation Tax

42

48

44

33

14

27

45

66

43

68

Qualified Companies***

38

44

42

29

12

24

44

61

40

64

3

4

5

4

3

8

19

30

24

17

Qualified National Companies Qualified Foreign Companies

35

40

37

25

9

16

25

31

16

47

Bidding Companies

14

27

26

17

6

21

32

42

23

39

Bidding National Companies

1

4

4

4

2

7

14

25

18

12

Bidding Foreign Companies

13

23

22

13

4

14

18

17

5

27

Winning Companies

11

16

22

14

6

19

30

36

17

30

Winning National Companies

1

4

4

4

2

7

14

20

12

12

10

12

18

10

4

12

16

16

5

18

6

6

8

5

1

1

6

11

2

6

Winning Foreign Companies New Operators

* Just taking into account blocks that present exploratory risk. ** Referring to values after the signing of concession contracts. *** Qualified companies are those that meet all the requirements to bid (qualification + payment of Participation Tax + the Bid Bond) N/A - Not Applicable

across the world are already used to dealing with production sharing contracts. “They all have a concession contract or production sharing contract somewhere,” she says.

The only difference that will take place will be in Petrobras Pre-salt governance, as it will start to manage both the assets and the contractor group. “The issue of governance is stipulated in the 58

T&B Petroleum 35

contract, and this isn’t a new concept as it is based on a normal Joint Operating Agreement (JOA), with its terms regulated by the Association of International Petroleum Negotiators (AIPN).

This industry is 150 years old, so

we are not inventing anything new here,” says Chambriard.

But there are some questions.

According to Marilda Rosado, founding partner at MRA Advogados law firm, in the new regulatory framework defined by Laws 12.351/2010, 12.304/2010 and 12.276/2010, “the regulatory and supervisory powers of the ANP have been extended to cover

A continuous evolution

contracts under production sharing and onerous transfer regimes, although in a more restricted manner ”.

However, she mentions the dialogue encouraged by the ANP among various agents of the production chain. “It is important to remember the transparency and commitment adopted by the ANP along the last 15 years. The agency has always supported suggested regulatory changes arising from discussions during the workshops it organizes on technical, legal and tax issues,” she says. “Some of these matters involve other government organizations, and the ANP plays its part by trying to reach agreements with these that meet everybody’s needs,” says Rosado.

The ultimate test The changes to the rules represent yet another challenge for the ANP, which has been seeking to reinvent itself at every opportunity. This began in 1999 with the bidding rounds for the pre-salt exploration blocks, when the country and its oil industry were learning how to operate without the restrictions associated with the previous monopoly.

The year after the first bidding round, which opened up the Brazilian market to no less than 10 international companies, the ANP would become branded with the name “market sheriff ” in response to the manner it dealt with a serious incident: in January 2000, around 1.3 million litres of crude oil leaked from a pipeline at the Duque de Caxias Refinery (REDUC), located in the Baixada Fluminense region of Rio de Janeiro.

The oil slick spread across Rio’s symbolic Guanabara Bay and extended across an area of 50 km², reaching the Environmental

Protection Area (APA) in Guapimirim, Magé, the country’s first mangrove protection project.

The damage to the environment, the impact of which is visible even to the present day, resulted in Petrobras receiving a fine of R$2 million. On the other hand, this event became the catalyst for heavy investments into new technology and processes and led to the improvement of the company’s safety management, culminating in the creation that year of its Programme for Excellence in Environmental and Operational Safety (PEGASO).

Considered at the time to be the biggest environmental programme of its kind in the world, PEGASO resulted in a series of investments, with Petrobras allocating around R$4.2 billion to its facilities in Rio between 2000 and 2008. Today the oil giant maintains no less than 10 Environmental Defence Centres (CDAs) on the Brazilian coast, one of which located on Guanabara Bay. Under the supervision of the ANP, over the last decade Petrobras has implanted a sophisticated National Operational Control Centre (CNCO) to monitor and control its pipeline network spread throughout the country. The centre monitors the volume, flow, pressure, temperature and density of the products transported through the system, and any other data that may indicate irregularities or risk.

The market and the ANP have matured over this period. “In 15 years we have doubled the country’s reserves and production.

We have reached the milestone of 15 billion barrels of proven oil reserves and we are producing 2 million barrels of oil per day,” says Magda Chambriard. “And investments in exploration and production from our 78 conces-

sionary companies add up to around US$40 billion per year,” she emphasizes. The fact is that Brazil, according to the 2013 edition of the internationally recognized BP Statistical Review of World Energy, currently has the 12th largest oil production in the world (2.15 mboed) and is ranked 15th in proven oil reserves, when taking into account all members of the Organization of Petroleum Exporting Countries (OPEP). “We are also one of the countries with the largest database in the world on its sedimentary basins, containing geological, physical and seismic data, as well as samples, tests and profiles on oil and gas wells,” she says.

A steep learning curve But the regulator’s history isn’t all flowers, as it had to deal with a tragic accident right in its early days: a year after the leak that affected the Guanabara Bay, the agency and the Directorate of Ports and Coasts (DPC) were hit with a hard task: to investigate the P-36 accident, which caused the deaths of 11 of the 175 personnel on board and resulted in the Roncador field production unit sinking in the Campos Basin.

The reports prepared by the ANP and the DPC – the Brazilian Navy agency responsible for the supervision of all maritime activities taking place on the Brazilian coast, including offshore platforms – show that the incident was caused by “non-conformities with operational, maintenance and project designing procedures” on the platform, which at the time was producing around 85,000 barrels at depths of 1,200 m.

The institution reinforces its practice of working together with other agencies in the orientation and control of activities that guide T&B Petroleum 35 59

events TN Petróleo 15 years celebration

TN Petróleo

celebrates 15 years

B

We could not miss the opportunity to express our gratitude and celebrate our 15 years in existence, with all its challenges and conquests in the Brazilian editorial market!

by Rodrigo Miguez

enício Biz Editores Associados met up with friends and partners on August 15th in the restaurant of Cais of Oriente, in the centre of the city of Rio de Janeiro.

Benício and Lia Medeiros, founders and directors of TN Petróleo, hosted the event in the historic building that houses the restaurant.

As well as good music, food and drink of the party, a projection during the event showed the highlights of the oil and gas industry over the years, as produced by TN Petróleo and TB Petroleum. Many saw themselves on the big screen, showing great coverage of significant events, such as national and international trade fairs – OTC in Houston, Rio Oil & Gas and Brasil

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The T&B Petroleum team Offshore, the World Petroleum Conference, Navalshore, and Rio Pipeline, amongst others.

As well as the more emblematic front pages of the years of circulation of the magazine, the projection revealed a little about the day-to-day of the pro-

duction of one of the main publications in the oil and gas sector in the country.

As a toast, two tickets, one to Houston and another to Amsterdam, given away

by TN Petróleo partners American Airlines and KLM, were raffled among the guests. As well as these, the following

Photos: Ricardo Almeida

partners also sponsored the event: the ABS Group, Mayer Brown – Tauil & Chequer Advogados, Projemar Engenharia, Associação Brasileira de Engenharia Industrial (Abemi) and Grafica Walprint – the graphics outfit that has printed TN Petroleo since issue one.

In an emotional speech, Lia Medeiros thanked everyone for their presence and reminisced about the good times over the 15 years of history without forgetting the challenges and successes that marked the rise of the magazine: “ Our role in generating and distributing relevant, valuable, technical information is carried out daily with competence and dedication” she stressed.

She mentioned that since the launch of the edition T&B Petroleum in English, soon after the the company’s first year of life, the magazine was already in various countries such as the United States, United Kingdom, Norway, Canada, Argentina, France, Spain, China, and India, with memorable coverage.

The general manager of ABS, João Carlos Pacheco, highlighted that he has followed the work and growth of the magazine since the start. “TN puts the information that is of interest to the oil and gas market in a way that is pleasant to read” he noted.

“I saw TN Petróleo grow over the years and today it’s an important

source of information and consultation in the oil and gas segment.” affirmed Antonio Muller, president of Abemi.

Paul Valois, lawyer and partner of L.O.Baptista, Valois, Miranda, Ferreira & Agel, noted that TN Petróleo came into being exactly at the moment that the industry suffered deep changes. “Professionals from various areas started to work in the oil and gas market and felt the lack of specialist Brazilian publications in this field. TN Petróleo filled that space, covering facts and events in the sector, always competently.”

Anyway… Back to work! We hope to see you for the next 15 th anniversary!

T&B Petroleum 35 67

professional profile

An engineer with a geologist’s mind Álvaro Alves Teixeira defines himself as a man inspired by challenge.

His career as a civil engineer and geologist mirrors the history of Petrobras, where he worked for 35 years, and after retiring from the company 20 years ago he went on to contribute even further to the sector that he had helped to consolidate. After 18 years as executive secretary for the Brazilian Institute of Oil, Natural Gas and Biofuels (IBP), for which he is now a senior adviser, he then began to work as a consultant for companies looking for business opportunities in the oil and gas sector.

Photos: T&B Petroleum

A

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by Karolyna Gomes

lover of science from an early age, at 78 Teixeira still has the same passion for challenge that led him to “dive deeper” into the world of oil and expand from his career in civil engineering into geology. “I was different to my brother, who wanted to be a pilot. We decided early on what we wanted to be, and I chose engineering as it was always something I really enjoyed,” he says.

His 55 years working in the oil and gas industry have seen him take part in some of the most important achievements for this sector in Brazil and overseas. He was involved in the landmark discoveries of the Carmópolis field in Sergipe, which has now been in production for 50 years, and the Majnoon field in Iraq with its giant reserves of over 20 billion barrels, although this region is still waiting to be developed 30 years on.

Teixeira is proof that oil is not just in the geologist’s mind, as the saying goes in the industry. These are the professionals that determine the possibility of discovering oil in a certain area, and his training as an engineer enabled him to develop an innovative approach for this at Petrobras, which today faces the challenge of extracting oil from the pre-salt layer at depths of 7,000 m below sea level.

Graduating in 1957 from the old National School of Engineering in Largo do São Francisco (now the Polytechnic School of the Federal University of Rio de Janeiro), he followed the thinking of former Brazilian President Juscelino Kubitschek that a true “revolution” is required in order to construct a country. “Fifty years of progress were condensed onto five,” he remembers.

In the same class as renowned economist and former minister Mário Henrique Simonsen, Teixeira decided to change profession after being lured by the benefits offered by Petrobras, which was making efforts to replace the foreign employees that outnumbered its domestic workforce at the time. The oil company managed to convince him and another 50 colleagues from his class of 170 to make the move. “They (Petrobras) went on a crusade through the universities. It was the state oil company and it held a monopoly... That made us very interested,” he remembers.

products and services

Agito AS Agito AS, a world-leader in providing modeling and simulation of complex dynamic systems, is pleased to announce the opening of Agito Technical Dynamics do Brasil.

Brazil is one of the major regions for development of offshore oil & gas production, and this office will meet the increasing demand for dynamic analysis in the region and ensure that our clients in Brazil receive local representation.

Agito, with more than 15 years of experience, have the resources available to complete modeling and simulation analyses of hydraulic, electrical, and fluid systems. Drawing on resources from our offices in United States, United Kingdom and Norway, Agito provides support at all project levels from initial studies to final testing and verification. Using CAE software that meets the specific needs of the offshore/subsea industry, Agito performs dynamic analyses and optimization of critical functions in complex systems, including detailed reporting.

The software, SimulationX®, developed by ITI GmbH in Germany, is the trend-setter in physical system simulation. It was the first universal

Photo: Courtesy of Agito AS

Agito AS opens office in Brazil

Anne Sofie Olsen (Agito Corporation – Houston), Gordon Haldane (Agito Technical Dynamics UK), Rune Lien (Agito AS) and Carlos Witte (Agito Technical Dynamics Brasil).

CAE tool with a subsea specific library. The library, developed by Agito and ITI, has ready to use subsea component models such as: umbilicals, subsea control modules, subsea valves, deep-water accumulator, subsea compensators and ROV stabs. The next step, an electrical subsea library, is in the final stages of development, and will be available for commercial use at the end of this year.

“CAE tools, such as SimulationX®, allow one to test a system virtually before putting it into production. It is an essential supplement which helps engineers design a better product at a lower cost. The simple user interface allows for simulation projects to be performed in-house. Alternatively Agito’s team of experts can complete

your projects.”, as mentioned by Carlos Witte, Vice President of Agito Technical Dynamics do Brasil.

With offices now in most major oil and gas regions, Agito supplies expertise in modeling and simulation in the following areas: Drilling and Active Heave Compensated Systems; Flow Capacity; High-Integrity Pressure Protection System; Pipeline Repair Systems; Remotely Operative Vehicles Launch and Recovery; Subsea Control Systems; Deck Machinery and Lifting Equipment; Riser Isolation Valves; Blowout Preventer (BOP) Control Systems; Riser Tension Systems; Installation and WorkOver Control Systems; Chemical Distribution; Well Intervention (WI) Equipment.

Technip

Technip signed a frame agreement with Petrobras for offshore projects modifications services in Brazil Technip has signed a four-year frame agreement with Petrobras for projects modifications services for the Rio de Janeiro Operations Unit (UO-RIO), including existing offshore platforms located in the Campos Basin area, Brazil.

The services comprise basic and detailed design, documentation update, engineering consulting, planning, control and execution 74

T&B Petroleum 35

supplies for 13 offshore platforms.

Technip was previously awarded contracts on some of these projects, most notably designing and constructing the topsides of three of Petrobras’ deepwater production semis – P-51, P-52 and P-56 – the largest topsides floatovers onto semi hulls in the world.

Technip’s operating center in Rio de Janeiro will carry out the project

management, engineering and procurement. Services will be performed upon client request.

Jose Jorge Araujo, Technip’s Senior Vice President of Onshore Latin America & Offshore Brazil, stated: “This award reasserts Technip in Brazil’s competitiveness as a top-class services provider and reinforces our long-term commitment to Petrobras’ key projects.”

Damen

Damen unveils its Offshore Series

Delivery of World Diamond, the first of six PSV 3300 platform supply vessels for Norwegian owner World Wide Supply, opens a new era in offshore for Damen Shipyards.

One of five PSV variants available by Damen, the range is just one of six newly defined ‘Offshore Series’ vessel types from the shipbuilder. The PSV was constructed at Damen Galati (Romania) and entered service under Remøy Management operation in July.

The 80.1m length World Diamond itself is a diesel-electric PSV, built to the Damen ‘E3’ formula of Economy, Efficiency and Environmental optimisation. Drawing a draught of 6.15m, the vessel can carry loads of up to 1,500 tons on deck and is designed for challenging weather conditions.

The versatile vessel can be adapted for oil spill response, construction, ROV and diving support activities, and for many other functions.

Mark Couwenberg, Design & Proposal Engineer Offshore & Transport Damen Shipyards, describes “a sleek bow, slender hull lines, and diesel electric propulsion with azimuth stern drives, all leading to a high cargo intake combined with low fuel consumption, not only in calm water but also in rough seas.

The vessel features DP2 capability, newly designed anti-roll tanks and an optimised superstructure for minimized slamming.”

“The starting point for all of the vessels in the new Offshore Se-

Photo: Courtesy of Damen Shipyards

Damen Shipyards Group is offering a fresh approach to offshore vessel customers. The company believes its global presence, combined with its continuing family-run ethos, can make a significant impression in a market characterised by niche yards.

ries has been conceiving the right hull because this is vital in reducing fuel consumption,” says Jan van Os, Damen Product Director Offshore. “Hull shape, coatings, the location of oil tanks, refrigerants, recovery of waste heat and engine emissions – all of these are part of the E3 concept.”

He adds that, in launching the new PSV, Damen has been building on experience, largely drawn from the Brazilian market. Its Brazilian partner yard Wilson Sons has delivered 18 PSVs over recent years, tailored to local requirements. In aiming to serve the offshore market worldwide, the new PSV will also allow Damen and Wilson Sons to offer the appropriate solution to any (South American) customer.

As well as a range of multi-purpose vessels featuring shipboard cranes and a variety of pontoons, the highlights of the new Damen Offshore Series include: the Construction Support Vessel 8019; a Well Stimulation Vessel: the Anchor Han-

dling Tug and Supply vessel 200; Fast crew suppliers: the 7,500 dwt Damen Offshore Carrier; the Offshore Heavy Lift Vessel 1800: an Oil Spill Response Vessel.

In the last case, the latest vessel is fit for the Brazilian market and incorporates Petrobras’ OSRV-requirements. Currently Wilson Sons and Damen are building two of these OSRV’s for local operator Geonavegação and a PSV 5000.

Jan van Os stresses that Damen’s combination of global reach and a local approach augurs well for its expansion in the offshore market. “Through the Damen Technical Cooperation department, we can supply a prefabricated shipbuilding kit and combine this with expert assistance, training and back-up,” he says, adding: “This is exemplified in the strong Wilson Sons–Damen relationship. We have even delivered vessels to specification in locations where it has been necessary to build the slipway or even the shipyard itself.”

T&B Petroleum 35 75

products and services

Deloitte

Deloitte, one of the largest consulting and auditing firms in the world, is opening its first Oil & Gas Center of Excellence (CoE) in Latin America. Headquartered in the same building where the company’s office is located in Rio de Janeiro, the CoE brings together professionals from various specialties to work under a multidisciplinary model to meet the challenges of companies in the oil and gas industry, at a time of rapid growth of the industry in Brazil.

To open the Center of Excellence, the Deloitte office in Rio de Janeiro hosts this week Deloitte’s global leader for the Oil & Gas industry, Adi Karev; and the president of Deloitte in Brazil, Juarez Lopes de Araújo.

The opening of the CoE takes place at a time of new perspectives and investments in the oil and gas sector, with resumption of auction rounds for exploration and production blocks in the country. In October, the first round of pre-salt auctions should occur, for the Libra area, the first under the production sharing model. In November, the 12th round of auctions will offer 240 exploration blocks on land, with focus on the conventional and non-conventional gas segment.

Multidisciplinary approach – For Deloitte’s oil and gas industry leader in Brazil, Carlos Vivas, the CoE is part of the company’s strategy to provide assistance to companies throughout the industry chain based on a broad vision of their challenges. “Our Center of Excellence provides clients much 76

T&B Petroleum 35

Photo: Courtesy of Deloitte

Deloitte opens the Oil and Gas Center of excellence in Rio de Janeiro

more than consulting services to meet their specific needs. Our proposal is to bring together, in the same physical space and with appropriate facilities, professionals with various specializations to assist the oil and gas industry with multidisciplinary solutions customized to the reality of the company,” says Vivas. Among the customized solutions of Deloitte for the sector is the evaluation of oil reserves and geological studies, by means of its Resource Evaluation & Analysis department.

The technical leadership of the CoE activities is under the responsibility of the director of the Oil and Gas Center of Excellence, Ricardo Savini. With more than 26 years of experience in the oil industry in various countries, such as Brazil, Venezuela, Argentina and the United States, Savini has held different management positions in the areas of exploration and production, such as manager of Geology and Geophy-

sics, Reserves, Technical Services, and Planning & Development of Business and Operations. “Brazil has been taking significant steps so that its oil and gas industry can maintain steady and sustained growth. This is an unusual time for the global industry, with the challenge to raise oil production from 2 to 4 million barrels per day over the next years, certainly the highest global growth in recent decades. And our activities in the CoE will allow us to contribute to companies in the area so that they are successful in this phase of intense activity,” says the CoE director.

Deloitte has been in Rio de Janeiro since 1911. The new Oil & Gas Center of Excellence in the Rio de Janeiro state capital is part of a global network of centers of excellence. Deloitte has integrated and high specialized teams in the sector in Houston, Calgary, London, Oslo, Rotterdam, Moscow, Cape Town, Dubai, Beijing, Hong Kong, Perth and Singapore, as well as total synergy with Buenos Aires to service the Latin American market.

Rolls-Royce

Rolls-Royce has congratulated Sanmar Shipyard for the completion of the world’s first gas powered tug, in a ceremony in Istanbul, Turkey, this weekend.

Sanmar has completed the first of two tugs for Norwegian customer Buksér og Berging, which each feature two Rolls-Royce Bergen C26:33L6PG engines fueled purely by liquefied natural gas (LNG).

The first boat, named Borgøy, will enter service next month following a series of sea trials. It will be operated

by Norwegian state oil company Statoil at its Kårstø gas terminal.

The Rolls-Royce propulsion package includes the gas tank and supply system and two of the latest design US35 azimuth thrusters that ensure the tugs have rapid manoeuvring and positioning capabilities - essential for tug operation.

Photo: Courtesy of Rolls-Royce

Rolls-Royce powers world’s first gas-powered tug

Francisco Itzaina, Regional Director - South America said: “The completion of this vessel is highly significant for Rolls-Royce, Sanmar Shipyard and Buksér og Berging. We are extremely proud to have worked together on this successful project which heralds a new era for tug boat propulsion.

“Gas is gaining in popularity as a maritime fuel, and its environmental credentials, combined with lower costs are seeing many operators select it

over traditional fuels, across a range of ship types.

“Most of the world’s tug fleets operate close to shore, where emissions regulations are most stringent. As LNG becomes more widely available, I have no doubt that many major ports will soon opt for this clean, lower cost and smoke-free fuel to power their tugs.”

The combination of Rolls-Royce gas engines and the latest thruster design, mean that the Borgøy and its sister vessel’s CO2 emissions, will be around 30 per cent lower than conventionally-fuelled tugs. They will also comply with all known future emission regulations.

Rolls-Royce Bergen engines are the leading pure gas, medium speed engines in the marine market.

The company is also world leader in the supply of azimuth thrusters for tugs.

RMG Group

RMG Group introduces first gas chromatograph to measure natural gas quality RMG by Honeywell today introduced the PGC 9303 Process Gas Chromatograph, the first device that allows operators to measure the quality of natural gas with hydrogen and oxygen components in a single instrument.

Approved for custody transfer applications by the National Metrology Institute PTB in Germany, the PGC 9303 helps users identify the calorific value of natural gas in the natural gas grid, which lowers costs due to reduced carrier gas consumption.

The device provides ± .10 percent accuracy and can measure hydrogen up to 5 percent with helium as a carrier gas. As such, it is suited for demanding renewable energy, biogas and power-to-gas applications

under metrological conditions. This precision process gas chromatograph reduces operational costs, and improves accuracy and reliability when determining energy usage.

“With the increased availability of renewable energy sources, operators need the ability to measure the hydrogen and oxygen components in natural gas,” said Frank Michels, general manager, RMG Gas Metering. “RMG by Honeywell played a pioneering role in developing the PGC, which is the world’s first gas chromatograph able to measure natural gas, hydrogen and oxygen in an integrated device.”

The device can be used by gas transmission and operating companies, underground storage

operations, industries with large gas consumption requirements, engineering/procurement/construction (EPC) contractors and station builders.

The PGC 9303 measures the percentage of 12 primary natural gas components for the calculation of gas compressibility based on the AGA 8 super-compressibility factor. These data are the basis for calculating superior and inferior calorific value, standard density, relative density and Wobbe Index using the characteristics of the components per the ISO 6976 or GPA 2172-09 standards.

The device’s proven measurement technique enables the energy content of measured gas to be determined for billing purposes.

T&B Petroleum 35 77

products and services

Wärtsilä

Wärtsilä, the marine industry’s leading solutions and services provider, introduced a new series of both steerable and transverse thrusters that will further develop the current portfolio. The new Wärtsilä Steerable Thruster series (WST) is being introduced to replace the company’s Modular Thruster and Compact Thruster series, while the new Wärtsilä Transverse Thruster series (WTT) is replacing the current range of transverse thrusters. The new products have been developed in response to changing market demands, requiring competitive thruster products which are more efficient and cover a wider power range.

This major product development project was launched by Wärtsilä’s Propulsion R&D already in 2011. The latest insights in thruster design were implemented using state-of-the-art numerical simulation tools. The first product to enter the pilot phase is a 4500 kW under water (de)-mountable steerable thruster, the WST-45-U, which began its pilot phase in summer 2013. Two more products, the WST-14 and the WTT-11, are scheduled to begin their pilot

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Photo: Courtesy of Wärtsilä

A new generation of thrusters

phase before the end of this year.

Wärtsilä will continue the introduction of different sizes of thrusters in the coming years based on market requirements and customer priorities.

The new thrusters are available for various types of vessel depending on the size and features of the product. For example, the WST-45-U is designed mainly for the offshore drilling market; the WST-14 is intended for tugs up to 45tBP, inland waterway vessels, and for river/sea going cargo ships.

This thruster is compatible with both medium speed and high spe-

ed (1800 rpm) diesel engines. The WTT-11 is a 1100 kW tunnel thruster designed mainly for merchant cargo vessels.

The new WST and WTT units come with several added features, such as an increased power range, an 8° tilted propeller gearbox, and a new Wärtsilä Thruster Nozzle for the thrusters designed for offshore drilling. The new thrusters intended for tug boat applications also have the new nozzle, which improves performance and has a high level of system integration as well. The new tunnel thrusters are more compact and efficient than earlier versions.

“The marine sector is undergoing a period of significant change and technological advancement, and this next generation Wärtsilä thruster portfolio has been developed in line with these trends by utilizing the latest calculation tools and model testing to secure the hydrodynamic leadership of the products. The new products are even more efficient and reliable than earlier, as well as being lighter and easier to install,” says Mr Arto Lehtinen, Vice President Propulsion, Wärtsilä Ship Power.

Purolite

Energy utility engineers for Spain’s recently expanded Cartagena Repsol Refinery have reported successful deployment of a special ion exchange (IX) process that was selected to help provide for demineralized (DI) water needed to increase the refinery’s utility steam production from 110 tons/hr to 400 tons/hr..

The proprietary, packed-column process from Purolite is the final step of a treatment process that is providing conductivity of <0.1 microsiemens/cm for boiler feedwater for the new, award-winning DI plant, which was designed and constructed by SADYT as part of its turnkey, zero discharge project responsibility for all water treatment aspects of the refinery expansion.

The packed-column IX process for the new plant consists of three identical lines that each receive RO permeate water at the rate of 175 m3/hr. In addition to meeting the conductivity requirement, it provides for exit silica at <20 ppb.

While significantly exceeding the exit conductivity standard of <5-10 microsiemens for the air hold down counterflow IX process in the refinery’s original DI plant, which is still in use, the new process for the expansion could not afford to use water like the original process does. Instead, the new process provides for reducing the m3 of water for regeneration steps, while increasing the m3 of DI-produced water per kg of caustic and sulfuric acid in each regeneration.

“We needed a significant upgrade from the original system for the new water treatment plant, in

Photo: Courtesy of Alstom

Special IX process meets rigorous demands for additional DI plant needed for major refinery expansion

order to meet the greatly increased demand for steam for the refinery expansion,” recalled Maria Isabel Ferre, operations engineer for energy utilities, and Repsol’s project and process engineering supervisor for the water treatment addition. “And since we are located in a very hot region with very little water, the water treatment part of the expansion was mandated as a zero discharge project.”

“The new IX system has met the treatment standard needed to protect our boiler, while minimizing the use of water for treatment and regeneration.” In addition, Luis Lopez, also an operations engineer for energy utilities, noted that the new system features automated regeneration.

“It’s totally automatic; you only have to look after it,” he said.

“The operator doesn’t need to perform the desired result

for flow dilution; it’s all fixed in the system. We’ve had very good results with regeneration, and have been able to produce all the water that’s been expected, at the required specifications.”

“The operators don’t have to be in contact with the water as they do with the original system, such as taking samples in order to control the regeneration.”

About 50% of the boiler feed water for the refinery derives from the ion exchange processes, while the other 50% comes from a condensate polishing plant. The new proprietary packed column process requires neither backwashing nor fast rinse.

“We took advantage of our proprietary software to provide design and engineering assistance with the regeneration sequence, timing, dilution flows, diameter/height ratio, compaction flows, calculating volumes per line, and vessel sizing, “ said Rodrigo Salvatierra, technical sales manager for Purolite Iberica (Spain and Portugal).

T&B Petroleum 35 79

products and services

Roland Berger’s Oil & Gas

Risk management is essential to innovation in oil and gas companies How a company thinks about risk and manages the “fuzzy” front-end decisions in its innovation pipeline will have a large impact on R&D success and, ultimately, on the company ’s business success, pointed out Roland Berger Strategy Consultants Partner Robert Peterson during a panel that he co-moderated in Houston. The panel was one of several keynote technical sessions at the Offshore Technology Conference (OTC) in Houston (USA), the single largest conference of the upstream oil and gas business. This year, nearly 100,000 attendees from the oil and gas industry participated in the four-day Conference about the new trends in the industry.

“Today’s oil and gas companies are running very large capital projects, with varying levels of success,” said Peterson, who leads Roland Berger’s Oil & Gas practice in North America. “Projects of this size are necessary, given the challenges of extracting barrels that are in harsh arctic environments, ultra-deepwater plays and tight formations. These projects typically progress through stage gates, which are designed to minimize risk as investment scales up.”

Upstream oil & gas innovation project investments on the other hand, are typically much smaller than most capital projects, but may have a very large impact on business results. “Technologies that have emerged from innovation projects in the recent past – 4D seismic imaging

methods, subsea production systems, high-pressure, high-temperature drilling technologies – have all enabled production capabilities in new regimes, and have ultimately lowered the risk of large capital investments” points out Peterson. However, applying project stage-gate methods to these innovation projects – which is the industry tendency, according to Roland Berger’s analysis – may in fact stifle that necessary innovation at the concept phase of the R&D funnel.

Mr. Peterson added that energy executives like to see, in fact, demand predictable results: “These executives want to know how much oil and gas they are producing, how long it will take before they complete a well and how much money they are going to make. The desire for certainty in business results runs counter to the inherent risk in R&D and new technology initiatives.”

To address the challenge of balancing innovation, project and business risks, Roland Berger has been working with clients to apply new approaches to measuring innovation projects and their progress. According to Mr. Peterson, “The innovation approach should be tailored to the risk tolerance of each individual organization.” He cited examples such as adapting “agile” project manage-

ment methods from the IT world to oil and gas R&D, and devising methods to measure the business impact of “good” ideas, especially as a means to ensure sufficient idea generation at the front end of the R&D funnel.

In addition, Peterson noted: “Innovation convergences – a combination of technology advances – have traditionally enabled break-through progress in our industry.” For example, the convergence of wide-azimuth seismic, integrated geologic models, “grid-computing” and team-room visualization has been responsible for the first wave of deepwater innovation in the Gulf of Mexico. Further, another potential convergence of technology advances might drive the next wave of deepwater development and production: High strength composite materials for well construction enabling safe 20,000+ psi drilling, complete ocean-floor subsea production systems that dramatically reduce or eliminate the need for massive topsides, and “team virtualization”, allowing expert work-teams scattered around the world to collaborate in an “oil and gas” virtual world online.

Mr. Peterson concluded by observing that the core issue in managing the innovation process and driving transformational convergences is one of integrated business and technology risk management: “In the end, how many barrels of oil are companies willing to put at risk to achieve their breakthrough technology objectives?”

T&B Petroleum Newsletter 80

Daily, on the screen of your computer, information of naval and offshore sector. Subscribe in www.tbpetroleum.com.br T&B Petroleum 35

products and services

FAPESP

FAPESP, Brazil’s leading regional funding agency for scientific research, and BG Brasil (member of BG Group) today signed a US$20 million cooperation agreement to jointly fund clean energy research and development, helping the country to sustainably exploit its huge oil and gas potential.

The purpose of the agreement between BG Brasil and FAPESP (São Paulo Research Foundation) is to fund a Research Centre for Gas Innovation in São Paulo state, by selecting research proposals to work on the following themes: clean energy consumption to mitigate generation of greenhouse gases; developing natural gas as fuel for shipping; improved engineering techniques for gas production; and the conversion of gas into chemical feedstocks, including hydrogen. Each partner will invest up to US$10 million over a five-year period.

The agreement was signed during a ceremony at Brazil’s London Embassy. Sir John Grant, BG Group’s Executive Vice President, Policy and Corporate Affairs, and FAPESP President Celso Lafer attended the ceremony.

Olivier Wambersie, Chief Technology Officer of BG Group, said “BG Group’s approach to R&D, in line with its corporate strategy, is very much to collaborate in partnership with world class scientific centres and apply innovations to the business issues we face. The R&D levy generated from our oil and gas production in Brazil provides us with the funding for our research in country.”

Photo: Courtesy of FAPESP

FAPESP and BG Brasil shall invest $20m in Brazil-based research centre on gas

“Technology is amongst the priorities of BG Brasil. We plan an investment of nearly US$30 million in research and development in 2013”, said BG Brasil President Nelson Silva.

“Proper scientific study of energy efficiency and the mitigation of greenhouse gases will contribute to enhanced energy security as the shift to gas continues, not only in Brazil, but worldwide,” said Lafer.

“The collaboration is interesting because it deals with topics of common interest to a company to and an institution for research funding, and also because it deals with one the major concerns of FAPESP, helping stimulate technological innovation that will raise the competitiveness of Brazil.”

“As Brazil is emerging as a global energy producer, the Centre will help ensure Brazil strengthens its reputation for sustainable energy consumption and responsible best practice,” he added.

“The partnership with BG Brasil adds to FAPESP’s strong portfolio of support for university-industry joint research. The long term envisioned for the Research Centre for Gas Innovation -- to be implemented through an open call for proposals -- allows the Centre to have bold objectives in the creation of new knowledge and its applications, as well as the training of scientists and engineers,” said Carlos Henrique de Brito Cruz, scientific director of FAPESP. Re s p o n s i b l e e n e r g y u s a g e underlies two of FAPESP’s core themes for research funding. Its BIOEN programme supports the world’s leading research on renewable fuel; while its climate change initiatives co-funded the Brazilian Earth System Model (BESM) that produced information integrated into the IPCC’s report to be disclosed on September 27th by the Intergovernmental Panel on Climate Change.

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Purolite

North American Company from chemical sector invests in Latin America market by starting a laboratory for special applications to attend demand in Latin America.

Purolite Corporation ñ a closed capital North American company with annual revenue of more than US$ 300 million per year, is the industry leader and exclusively specialized in resin technology ñ in investing in an application laboratory in Brazil focused on applications of their solutions and technologies for Latin America.

This decision was taken, with a investment higher than US$100,000, because of possibility to develop special applications with more than 700 products they have in production to attend some local needs and become a reference in these applications.

The new laboratory - unique in its segment in Brazil - provides the development of specific applications customized for each company. And as they are special applications, it is expected to increase market share by

providing new solutions. This additional service is in line with strategy of differentiate themselves by providing superior technical support.

The regional director for Purolite in Latin America, Fabio Sousa explains that expectations related to the new laboratory are focused on innovation and business prospects, “with laboratory of special applications we intend to discover new applications that currently do not use resins for its treatment. With this, we are getting in touch with new customers or reinforce relationship with existing customers”, he explains.

The goal, according to Sousa, is to increase the level of service for our products applications. “ Innovative solutions bring advantages for our customers and to us too. On the other hand, we will also use new laboratory, which has been approved by our headquarters, to analyze our resins in use”, he says.

Photo: Courtesy of Purolite

Purolite opens applications laboratory in Brazil

Talking about possibility of expansion of the laboratory and its facilities , the director is optimistic: “ we always think about expansion.

By new businesses taking place, we can always think about expanding our facilities to meet new demand without losing our quality and our service differential“, concludes.

With management strategy focused on their core business and outsourcing other services, the growth prospects of the company on the continent is that within 10 years, they will be reached the milestone of biggest supplier of advanced polymers in Latin America, with the detention of more than 40% of the market.

DOF Subsea

DOF Subsea and Technip awarded contract for four new pipelay support vessels The joint venture owned by DOF ASA´s subsidiary DOF Subsea and Technip was awarded by Petróleo Brasileiro S.A. (Petrobras) four contracts. These contracts cover the construction of four new pipelay support vessels (PLSVs) and operation in Brazilian waters to install flexible pipes. The combined value of the contracts for the DOF Group is approximately NOK 10 billion.

Two of the PLSVs will have a 300-ton laying tension capacity and will be fabricated in Brazil with a high national content. The other two vessels will be designed to achieve a 650-ton laying tension capacity, thus enabling the installation of large diameter flexible pipes in ultra-deepwater environments, such as the Brazilian pre-salt. Vard Holdings Limited (“VARD”), one of the

major global designers and shipbuilders of offshore and specialized vessels, will be in charge of the design and construction of the four PLSVs. Under the DOF Subsea/Technip joint venture agreement, Technip will manage flexible pipelay and Norskan S.A., a DOF ASA subsidiary, will be responsible for marine operations. Delivery of the PLSVs is scheduled for 2016-2017. Contracts will last eight years from start of operations, and could be renewed for another eight-year period.

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products and services

Rembe GMBH

Photo: Courtesy of Rembe GMBH

German Rembe invests in Latin America

Rembe GMBH, a german company founded 40 years ago, a leading European manufacturer of Bursting discs and Explosion prevention panels, announced the opening of Rembe America Latina Ltda, located in Sao Paulo, Brazil, by being considered one of the main development areas for E&P oil & gas.

Brazil will be the basis to attend customers throughout Latin America, which means that mainland enterprises will have services with all the technology, quality and innovation of Rembe’s products.

Rembe GMBH is represented globally in 70 countries and has satellite units in the following countries: USA, UK, Italy, Dubai, Singapore and China. In Brazil Rembe has worked with

the representative company Siebert & Cia Ltda since 2005.

Rembe´s core competences include the protection of industrial plants against vacuum and excessive pressure operating conditions. Process safety in industrial production is provided through bursting discs with various functional principles as well as with other pressure and breather valves.

The product range covers all applications and industries, from standard products to special high-tech solutions, coupled with application expertise in all industries throughout the world. Rembe’s know-how ranges from the lowest to the highest bursting pressures and includes sensor engineering, software, standardiza-

tion, consultancy, research, development, as well as prototype testing.

Rembe manufacturing facilities are located in Brilon, Germany. Productionn processes require a minimum of resources, using state-of-art laser machines and high-performance presses.

Unique customer requirements are addressed with diversity and flexibility while offering short production lead times. Additionally the Rembe Rush Order Service provides production and delivery within 24 hours ex works subject to material availability.

Rembe’s technical support, its solution-focused customer service and its experience in application engineering provide customers with security for their planning and for the operation of their systems.

A high level of reliability in consultancy and the right choice of products are just as much hallmarks of Rembe’s engineers as their understanding for a company’s production processes. Each customer has the same reliable Rembe relationship wherever they are located.

CBO Arpoador delivered The Alliança do Brasil shipyard held a ceremony for the delivery of the CBO Arpoador ship to Companhia Brasileira de Offshore (CBO) at an event held in their own yard this past September.

The CBO Arpoador is a support vessel 4,500 maritime type PSV (Platform Supply Vessel) to supply petroleum production platforms on the high seas. This is the 20th ship in the CBO fleet of technologically sophisticated ships, and it will be operated for Petro84

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bras. The vessel will be christened by Mrs. Cecilia Costa de Menezes Martins, wife of the director of the Alliance Yard, Jorge Marcelo Martins. President of the CBO and the Alliance Shipyard is Luiz Mauricio Portela.

The CBO Arpoador was built at the Shipyard Alliance in Niterói with funding from the Merchant Marine Fund (FMM), the Ministry of Transport, granted by the Brazilian Development Bank (BNDES), and incentives of the federal and state governments.

Photo: Courtesy of CBO

Companhia Brasileira de Offshore

Technical features Type...................................................................... PSV Total length (m).................................................. 88.8 LPP Length (m).................................................82.0 Beam (m)............................................................. 19.0 Depth (m)...............................................................8.0 Maximum draft (m)..............................................6.5

Orbit

Orbit Communication Systems, Ltd., a leading provider of elite business-critical connectivity solutions for mobile satellite communications, tracking and telemetry, and communications management systems announced the Brazilian launch of the OceanTRx™ maritime stabilized mobile VSAT platform. Brazil’s maritime, naval and oil&gas industries will benefit from the cutting edge technologies of the OceanTRx™ family which consists of the OceanTRx-4 and OceanTRx-7 platforms.

Orbit’s maritime VSAT solutions for Offshore Oil & Gas empower business-critical broadband satellite communications for offshore rigs/platforms and support vessels.

Companies in Brazil and around the world use the Maritime VSAT for: Offshore oil & gas platforms/rigs; Drilling ships; Floating production, storage and offloading (FPSO) vessels; Platform supply/support vessels (PSVs) and emergency support vessels (ESVs).

Today more than ever, offshore oil & gas companies and support vessel operators require always-on broadband connectivity for their remote maritime operations. Mission-critical and data-hungry applications such as real-time drilling data management, seismic information, live video monitoring and surveillance, and extended organizational network capabilities are vital for improving operational productivity, crew morale and business profitability. At the same time, maritime companies must meet stringent industry regulations while keeping costs under control.

Orbit Vsat Solutions – Orbit’s advanced VSAT solutions set the standard for reliability, ease of maintenance

Photo: Courtesy of Orbit

Orbit launches new maritime mobile VSAT OceanTRx™ product line for Brazil

and operation, RF performance and are designed to perfectly address the broadband satellite communications needs of offshore oil & gas rigs/platforms and support vessels. Smaller and easier to install than any other solution, Orbit VSAT solutions offer exceptional technical performance which saves bandwidth, ensure strict regulatory compliance, and provide unmatched system availability- leading to bottom-line business benefits.

OceanTRx-4 – OceanTRx-4 supports a variety of 1.15m stabilized maritime antenna system configurations in multiband frequencies, such as X, Ku and Ka bands and different BUC power units. Empowering mission and business-critical applications, it features inherent field upgradability, outstanding RF performance,unequalled tracking capabilities andbest in class dynamic response under virtually any sea conditions.To enable superior system availability and connection uptime, OceanTRx 4 is designed and tested to meet the most stringent environmental standards including shocks, bumps and vibrations.

OceanTRx-7 – OceanTRx-7 is the most compact and lightweight 2.2m mobile maritime antenna system in the market with similar performance to other 2.4m antennas. Any other system with similar performance will requiring about 88% more deck space and will weigh

at least 40% morethan OceanTRx-7.

OceanTRx-7offers numerousconfigurations in multiband frequencies such as C, Ku and Ka bands and at different BUC power units.OceanTRx-7is built for quick and easy installation, upgrade and maintenance, andcombines exceptional RF performance and system availability. Small enough to be shipped as a fully assembled unit in a standard 20 foot container and already live tested over satellite on a sea simulator, OceanTRx-7 drastically lowers shipping costs.

Both platforms are Balance Free systems during installation and upgrades. Moreover, they do not require periodic balancing which reduces customers’ overall cost of ownership.

“Orbit’s OceanTRx series features a variety of configurations, frequencies and power capabilities to address a wide range of maritime markets from oil & gas to cruise, commercial shipping, and naval,” stated Ofer Greenberger, Orbit’s CEO. “Bringing Ka-band migration to the maritime sector, OceanTRx is the ultimate and most reliable solution for maritime satellite communications today and in the future. OceanTRx-7 is the superior solution for stabilized antennas larger than 2m, while OceanTRx-4 is the most efficient platform for smaller systems.”

Designed for efficient on-board serviceability and maintainability, OceanTRx-4 and OceanTRx-7 feature a highly accessible pedestal design enabling efficient service support and field upgrade process without requiring accurate or periodic balancing. The OceanTRx product lineshares common electronic field-replaceable units (FRUs), allowing lower cost of ownership, easier maintenance support, and shorter service response times.

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products and services

Viking

Viking Life-Saving Equipment has witnessed strong growth in its offshore business this year, across a sector including offshore support vessels, semi-submersibles, drillships and floating production and offloading vessels.

Brazil represents a key growth market for its offshore business, which is reflected by the company’s strategic investments in services stations in Mage, Santos, Recife and Sao Luis, all overseen by subsidiary Viking Life-Saving Equipment Brasil Ltda, headquartered in Rio de Janeiro. These investments have received a significant reward in 2013, following a first order to come direct from Petrobras for delivery of life-saving equipment.

Viking is delivering two offshore escape chutes to each of eight Petrobras FPSOs. Built to a design from GVA, Sweden, these ships will be completed by the ECOVIX shipyard, Rio Branco, with the first due to be delivered in December and the last in 2017.

While these sales are indicative of strong local interest in Viking products, the company believes that owners of offshore assets in the region can benefit from the approach offered by Viking Shipowner Agreements. This is a range of fixed term full product supply and service leasing arrangements that has made a major impact in the passenger and freight markets since launch in 2011.

In challenging economic times, these agreements have become a core offering in Viking’s safety equipment business.

The newly launched Viking Offshore Service Agreement is a new multi-year service concept designed to streamline servicing by making costs transparent and reducing the need to shut down a rig during safety equipment servicing. It covers evacuation systems, liferafts, lifeboats and davits, firefighting equipment, breathing apparatus, deluge systems, 86

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Photo: Courtesy of Viking

Viking extends service concept offshore Brazil

immersion suits, works suits, lifejackets and other personal protective equipment.

The customizable fixed terms concept enables owners to meet the latest safety obligations while taking advantage of a full safety product package that includes global servicing, single-source management, and financing in a variety of fixed price structures.

Cost savings and predictability – In launching the Viking Offshore Service Agreement, Benny Carlsen, Vice President Viking Life-Saving Equipment, says: “Cost savings and predictability are as attractive to the offshore sector as they are in the wider maritime markets. It just makes business sense to give full consideration to solutions that offer the flexibility to respond to a changing market.”

Mr Carlsen says Brazil’s fast-developing offshore sector offers a very good example of the circumstances in which an offshore service agreement would attract owner interest.

“If an owner knows he can make a five year agreement covering his life-saving equipment commitment, then that takes time and hassle out of the equation,”

he says. “From our point of view, reaching agreements like this means that we are also able to optimize planning in terms of delivery and service, developing our service station support network as required.”

“Central to the concept is the idea of removing the burden of administration for rig owners, enabling them to concentrate on their business. Certified servicing, a single point of contact and international regulatory expertise are key elements of the Viking Offshore Agreement.”

All offshore safety equipment is serviced with virtually no impact on operations. Owners have the option of choosing between standard service and equipment exchange at the pier or platform. With only one transaction involved, the owner also cuts the need for transportation in half. That is a cost saving that is plain to see, but there are others including more efficient planning and logistics.

“In today’s offshore sector, asset owners are forced to choose between buying or renting a temporary set of liferafts to replace equipment being serviced, or to consider reducing on board personnel for days while vital safety equipment is being serviced,” says Mr Carlsen.

“With a Viking Offshore Service Agreement, neither scenario is necessary.”

For owners, adopting the approach means that liferafts supplied become part of Viking´s large global liferaft exchange pool. Viking’s service technicians - holding all the necessary certifications - work in support of the agreement to perform service on all safety equipment offshore on a global basis through an extensive network of 270 certified service stations.

Shell

Shell and its partners have begun production from the second development phase of the Parque das Conchas (BC-10) project, located off Brazil’s south-east coast. The BC-10 project (Shell share 50%, Petrobras 35%, ONGC 15%) is comprised of several subsea fields which are tied back to a floating production, storage and offloading (FPSO) vessel, named the Espírito Santo.

In 2009 the first phase of the project began production, when the Abalone and Ostra fields were connected, along with the Argonauta B-West reservoir. The peak production of the first phase was more than 90,000 barrels of oil equivalent (boe) in 2010, and is currently producing some 35,000 boe per day. Phase 2 connected a fourth reservoir to the vessel, the Argonauta O-North. At its peak, Phase 2 is expected to produce approximately 35,000 boe per day.

“Boosting production at BC-10 with the completion of phase two is another great example of our successful project development, delivery and execution capabilities,” said John Hollowell, Executive Vice President for Deep Water, Shell Upstream Americas. “It is a great day for Shell in Brazil.”

Photo: Courtesy of Shell

Shell produces first oil from phase 2 of Parque das Conchas

Building on what was already a successful proving ground for technology innovation, a 4-D Life of Field Seismic monitoring system was installed as part of Phase 2 subsea development. This technology, consisting of a network of seismic sensors installed throughout the field on the seabed, allows us to more effectively and efficiently monitor the reservoir.

This is the deepest installation of its kind on a full-field scale in the world (approximately 1800m or 6000 feet).

Expecting to maximize the production life of BC-10 even further, Shell and its partners recently announced in July the decision to move forward with the project’s

third development phase, which will include the installation of subsea-infrastructure at the Massa and Argonauta O-South reservoirs.

Once online, Phase 3 of the BC-10 project is expected to reach a peak production of 28,000 boe.

BC-10 phased development outline: Phase 1: Began production in 2009 from Abalone, Ostra and Argonauta (Argonauta B-West reservoir) fields.

Phase 2: Began production in October 2013 from Argonauta O-North field reservoir.

Phase 3: In July 2013, Shell and partners decide to move forward with development of the Massa and Argonauta O-South reservoirs.

HIGH-QUALITY INFORMATION At your finger tips www.tbpetroleum.com.br T&B Petroleum 35 87

ancorage

Ancorage offshore

Development of HMPE fiber for permanent deepwater offshore mooring

For a number of years, the creep performance of standard High Modulus Polyethylene (HMPE) fiber types has limited their use in synthetic offshore mooring systems. In 2003, a low creep HMPE fiber was introduced and qualified for semi-permanent MODU moorings. This paper reports on the introduction of a new High Modulus Polyethylene fiber type with significantly improved creep properties compared to other HMPE fiber types, which, for the first time, allows its use in permanent offshore mooring systems, for example for deepwater FPSO moorings.

Industry guidelines and standards mentioning HMPE creep are briefly discussed, and results on fiber and rope creep experiments reported. Laboratory testing has shown that ropes made with the new fiber type retain the properties characteristic of HMPE such as high static strength and stiffness and yarn-on-yarn abrasion resistance.

Martin Vlasblom, MSc Industrial Design Engineering at Delft University, the Netherlands. More than 20 years of experience in polymer consuming and polymer producing industries, of which 12 years at DSM Dyneema.

Jorn Boesten is graduated from Delft University of Technology in Mechanical Engineering in 1996 (Master). At this moment leading the global business of DyneemaÂŽ in offshore applications

Peter Davies is a research engineer in the Materials and Structures group at IFREMER, the French Ocean Research Institute.

Sergio Leite is graduated from Porto University (Portugal) in 1991 with the degree of Mechanical Engineer. Currently Sales Director for the Heavy Lifting and Specialty Ropes of the rope manufacturer Lankhorst Ropes/Offshore Division

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W

ith oil and gas field exploration going deeper and further offshore, mooring system designers are faced with engineering mooring systems that balance the demands of maximum platform offsets, wind and wave peak loads, and long-term high tensions in loop currents. Polyester ropes are commonly used for deepwater moorings. Beyond 2,000m water depth, however, the high stretch of the polyester rope becomes a problem as the longer mooring lines allow greater horizontal offsets. A 2,000m polyester line may have 40m elongation, while a 3,000m line would allow 60m elongation under the same environmental conditions, creating greater horizontal offsets which may exceed the limits of risers. Using High Modulus Polyethylene with similar break load these offsets would be only 12m for a 3,000m line.

In addition, High Modulus Polyethylene is now widely considered to be the most suitable material for these longer deepwater mooring line lengths. The fibers are characterized by high strength and high modulus, producing lighter and smaller diameter high stiffness ropes, providing both technical and operational advantages over traditional polyester mooring lines. A stiffer HMPE mooring system is potentially more riser friendly than polyester. HMPE ropes typically have an extension at break of 2%-2.5% for a worked rope.

During station-keeping, wave movements impose cyclic loadings on mooring lines, causing fluctuating fiber elongation. The mooring lines are subject to tension-tension fatigue loads. HMPE fiber ropes have shown a longer fatigue life compared to polyester ropes for the same rope construction and are not vulnerable to axial compression fatigue compared to aramid fiber(1), (2).

equipment

A revolution in Reservoir Surveillance for subsea production environments Todayâ&#x20AC;&#x2122;s offshore production environment would have been hard to imagine a decade ago. Typically today, we see long horizontal wells and in many cases long horizontal multilaterals produce jointly to complex subsea well heads, and then the combined production pass through kilometre-long tie-backs to platforms or FPSOs. This advanced and still evolving production scenario provides operators the only cost-effective way to move progressively into deeper waters to recover hydrocarbons.

W

Henry Edmundson, is Founder and a Director of R9 Energy Consultants. Graduated from the University of Cambridge, UK with an engineering degree and from the University of Bristol with a post-graduate degree in mathematic.

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ith these advances, however, comes a headache. The complexity of the subsea environment makes it virtually impossible to monitor the behaviour of any given well or multilateral, let alone the behaviour of the field being developed. This makes it extremely challenging to plan future field exploitation. Key decisions such as where to infill drill, how to complete each well, how best to balance injection and production, all require down-hole production data for reservoir management purposes to tune well and reservoir models to match reality and reduce uncertainty in implementing field development strategies. Without downhole measurements, operators significantly compromise long-term production.

Monitoring modern wells is beset with challenges. Production is often co-mingled abolishing any evidence there might be from any individual well, and typically almost all wells are challenging and costly to access once theyâ&#x20AC;&#x2122;re put on line. Any type of workover hardware for monitoring production, whether it is conveyed by drill-pipe, coiled tubing or wireline, requires an expensive rig for deployment and of course must contend with a specific subsea completion. The sheer mechanical complexity of these completions also makes permanent downhole sensors such as fibreoptics increasingly difficult to deploy and ultimately fragile.

During the last five years, however, a new technology developed by RESMAN (REServoir MANagement) has emerged to solve the above mentioned challenges in subsea developments. The technology leverages proprietary inert chemical tracers that are packaged in engineered solid polymer strips that can be inserted permanently into any type of completion across multiple completion compartments. An example is the Inflow

practices

Best practices of oil, gas and mining industry and risk mitigation As children most of us heard the adage, “what is good for the goose is good for the gander” or some variation thereof. As adults, we continue to adhere to this simplistic code of conduct to guide our interactions.

And, as business operators, we are increasingly aware that public ‘wins’ for one company can be shared across the sector – for the purposes of this discussion, our sectoral focus is on extractives.

C Melissa S. Hersh, is Risk analyst and consultant, Washington DC. Melissa Hersh and her team provide sector agnostic work and have an affinity for energy (including nuclear), extractives, food and health security, and intermodal transport and supply chains.

Claudio A. Pinho, is Associate Professor at Fundação Dom Cabral, former Vice-Chair of Oil and Gas Committee of American Bar Association, member of Brazilian Petroleum Institute (IBP .

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onversely, negative brand recognition resulting from an environmental, social, or ethical transgression or incident experienced by one enterprise can collectively tarnish the industry as a whole, resulting in reduced shareholder confidence, loss of talented human capital, labor strikes, increased public scrutiny, and even possible public protests.

Recent mine collapses, oil spills, explosions, contaminations, and foreign corrupt practices have placed the extractives industry under global scrutiny; the often unregulated and decentralized operations governing natural resources exploration are, however, changing. Unlike the geological time scale required to form our most coveted and precious commodities, strategic, operational, and reputational change must take place more rapidly. This then begs the question, is the sector changing fast enough to meet today’s and tomorrow’s expectations?

Rapid, ad hoc change for the sake of public appearance alone is not likely to net sustainable and profitable outcomes. Cultivating an agile and adaptive risk mitigation narrative to ebb and flow with an enterprise’s business decisions must be strategic, not merely relegated to corporate social responsibility or sustainability reports at the end of the year. Investing in stewardship is a means to profitability.

Brazil has been actively involved in paving the path forward with respect to enhancing stewardship of the environment and natural resources management as well as social governance: State-owned, public-private ventures, privately held companies, trade associations, academia, and NGOs and civil society are increasingly engaged at various stages of adopting and/or promulgating various degrees of in-

gas quality

Converting low quality gas into a valuable power source The Wärtsilä GasReformer utilizes low quality gases that contain large amounts of heavier hydrocarbons, or that vary in their composition, to produce a valuable energy resource.

A

Reetta Kaila, GasReformer Expert, D.Sc. (Tech.), Ship Power.

Peik Jansson, GasReformer Product Manager, Ship Power.

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ssociated gas, or volatile organic compounds (VOCs), cannot normally be utilized as a source of energy due to the low quality and unreliability of the gas. For the purposes of this article, gas quality is defined as being its uniformity and ability to withstand auto-ignition of the yet unburned fuel-air mixture part during the combustion process (methane number, MN). Due to the impulsive nature of this auto-ignition, destructive forces will lead to damage of the engine. The phenomenon of such auto-ignition is generally referred to as knocking, because of the typical sound associated with it. All combustion engines based on the Otto cycle, including Wärtsilä’s dual-fuel engines, need a high and stable fuel gas MN (>80) to operate at full performance.

Higher hydrocarbons (C2+), such as ethane, propane or butane, notably decrease the MN in gaseous fuels. When the MN is too low, instantaneous combustion of the yet unburned mixture will occur, unless the engine output is reduced. A reduced power output also results in lower fuel efficiency. In the offshore environment, the gases that are released during the oil separation process, or from crude cargo handling, are typically either flared or, even worse, directly vented to the atmosphere.

The Wärtsilä GasReformer provides an alternative option. Its technology is based on steam reforming (SR), a catalytic process where nonmethane hydrocarbons (NMHCs) are converted into methane, thereby improving the MN to 100±5. Regardless of the initial gas quality or variability, high and stable MN’s in the product gas are achieved.

The GasReformer is not only a solution for the recovery of VOCs or associated gas. It also improves the performance and fuel flexibility of Wärtsilä dual-fuel engines. Together with a Wärtsilä dual-fuel engine, the system attains an overall efficiency of up to 44% in producing electricity (Figure 2).

The Wärtsilä GasReformer Wärtsilä’s GasReformer technology has been actively developed over the past 5-6 years. After successful testing of the prototype “GasPac”, it was decided to industrialize this technology as a customer offering.

Design work for the Wärtsilä GasReformer began in December 2010, and marketing to select customers has been taking place since 2011. Wärtsilä owns the patent for the application.

The Wärtsilä GasReformer product has gone through two validation tests. These were (1.) the Proof of Concept test in 2007-2010, whereby

bidding round

Brazilian O&G Concession Agreements

T

he bidding documents such as the draft of the concession agreement and the pre-bid notice have already been published and less likely it is that these documents are will have any substantial changes in the course of the bid.Taking into consideration that 80% of our commerce passes through the ports, we need to invest much to go beyond and keep the competitiveness.

The Ports Modernization Law, enacted on February 25, 1993, permitted the private management of terminals in the 34 public ports of the country and the operation of 129 private terminals, but the today’s challenges continue the same, the search for reduction of operating costs, attraction of investments and increased effectiveness.

Those issues are critical to the sustainable expansion in the industry.

Regarding the draft of the concession agreement, and as a parallel analysis with previous ones, Brazil once more reinforced the legal trend in not including stabilization clauses in the wording of the contract, whilst international investors are seeking contractual guarantees to reverse the host country’s measures that may put at risk the terms of the investment agreements.

In a few words, these clauses are sought to maintain a certain level of stability of the terms that were originally agreed upon. With a stabilization clause, a government offers a contractual guarantee not to engage in an act that would compromise the terms of the original negotiation.

A host country may introduce new laws and regulations that may impact upon the legal and economic environment of the concession agreement. At a upper level, this attitude reflects that producing country seeks to improve the benefits from their contractual arrangements with producer-consumer countries.

As the risks of an unilateral action by the host governments is significant towards the investors, many armors were created to mitigate the risks of such unilateral actions. In this volatile context, stabilization clauses holds out the prospect of “additional security”, placing itself as a safeguard practice against the state’s legislative and regulatory measures.

The scope of application of such clauses is therefore limited, and although these clauses are designated to bring stability, a lack of control to the risks linked to them, such as political, geographical, financial, makes it less likely for a party to be bound to these provisions.

Taking a closer look in some Latin American countries. In an effort to hold higher stakes of shares of their National Oil Companies, countries like Venezuela, Bolivia and Ecuador are engaged in the so called “creeping expropriation”, which include elements such as “non-payment, non-reimbursement, cancellation, denial of judicial access, actual practice to exclude, non- conforming treatment, inconsistent legal blocks, and so forth.

In Brazil, the stabilization clause is not a legal reality in oil and gas concession agreements. For excessive onerousness, the Brazilian Law is clear and accepts hardship in contracts as an excuse for such events, if the conditions are met.

Despite the economic conditions that Brazil now faces, it still is a political stable country. Asserting stabilization clauses in oil and gas agreements as a result of a transparent negotiation is highly valuable, especially if they are approved by independent regulatory agencies.

Under the auspices of the International Finance Corporation, efficient contracting that balances the power of host state and interests of foreign investors allows the issue of new concessions and regulations that cover the host country’s needs, creating a new model of risk engineering that boosts free competition and reduces the power of unilateral national sovereignty, a constitutional paradox. Stabilization clauses would boost investment and unlock Brazilian´s highest performance in the sector, once both the government and the industry would be playing their role.

The Brazilian National Petroleum Agency approved last August 23rd, an auction of natural gas concessions that shall take place in the upcoming November, putting up for bid 240 exploration blocks in several inland basins, focusing natural gas explorations, including nonconventional deposits similar to the shale deposits in the U.S.

Priscila Uliana, is a Brazilian Oil, Gas & Energy resources attorney and LL.M in International Business Law and U.S. Oil and Gas Law.

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ports

Reflection on the status of the Brazilian ports “The history of nations is written with the work of its sons, with the wealth of its ground and with the movement of its ports” (Sérgio Matte)

Ports around the world have been experiencing major changes in the last decades, with significant investments in the development of technological processes and modernization of the operations, including concerning the management style.

H

istorically, Brazil follows a conservative model of management, focused on the centralization of the port decisions, which has been preventing the country from being able to modernize its structures, such as Companhia Docas, and reduce the high labor costs.

It is important to emphasize that the problem of Companhia Docas, which manages the ports, is not the lack of competence of its professionals, but a non-flexible model that makes more difficult the solution of simple issues, due to the lack of autonomy. Much of the efficiency gain does not depend on more employees, but on changes of processes that, today, can even be considered as archaic.

Taking into consideration that 80% of our commerce passes through the ports, we need to invest much to go beyond and keep the competitiveness.

The Ports Modernization Law, enacted on February 25, 1993, permitted the private management of terminals in the 34 public ports of the country and the operation of 129 private terminals, but the today’s challenges continue the same, the search for reduction of operating costs, attraction of investments and increased effectiveness. Those issues are critical to the sustainable expansion in the industry.

Today Brazil is already the world’s 7th large economy and moved more than 904 million tons of cargo in 2012. The long queues in the 34 ports of the country are a portrait of the extreme situation of the Brazilian infrastructure. A study published by Fundação Dom Cabral emphasized the lack of connection between the cost to export a container in Brazil, which reaches US$ 1,790, 300% more than in Singapore (US$ 456), twice that of Germany (US$ 872) and 70% above that of the United States (US$ 1,050). In addition to the cost, there are queues of ships in the terminals and lack of capacity to receive large vessels. Bureaucracy is also a hindrance and causes vessels to remain stopped in the ports for many days, due to the lack of technicians or inspectors to clear the cargo.

Operating on a 24-hour per day basis Rogério Caffaro, is CEO of Triunfo Logística.

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The companies that manage public ports are already operating on a 24hour basis per day for a long time, but the inspection teams used to work only in business hours, except in case of emergencies.

coffee break

good Italian food in sophisticated surroundings

Fotos: Lipe Borges

The name Uniko can be seen discreetly etched into the imposing façade of the old SulAmérica building on Rua do Carmo, though it makes no mention of the activity taking place inside.

by Orlando Santos

J UNIKO Carmo street, corner to Ouvidor street (Sul América Gallery) Centro - Phone: 55 21 3806 6334

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Just beyond the door, however, lies the latest gastronomic venture by Nicola Giorgio and Dionísio Chaves, owners of two other award-winning restaurants in Rio de Janeiro: Duo, in Barra, and Bottega Del Vino, in Leblon.

Uniko is the duo’s first experience in Rio’s city centre and was created with the purpose of offering executive diners the best in Italian cuisine at affordable prices. To achieve this they have surrounded themselves with excellent professionals and designed a menu to suit the restaurant’s target clientele. Bringing with them the incredible success they achieved with the two restaurants they opened in 2011, they are confident that everything will go as planned.

Uniko offers traditional Mediterranean cuisine, including pasta, fresh fish and good starters, with an excellent wine menu designed by awardwinning sommelier Chaves. Recently interviewed by a major newspaper, Giorgio explained that the secret to Italian cuisine is to keep things basic while using quality produce. He revealed that one of his favourite childhood memories is his mother preparing orecchiette al ragu every Sunday, a dish he serves in his two other restaurants and that will now also be on the menu at Uniko.

Rio’s gastronomic centre will gain a lot from the arrival of Giorgio, with over 32 years experience in the business, and his partner Chaves, who has twice been awarded the title of best sommelier in the city by Veja magazine.

The ground floor of this recently restored building (see side box) will be home to both Uniko and the Japanese restaurant Manekineko. Together these Italian and Japanese offerings will liven up the gastronomy scene inRio Rio’s historical centre – and not a moment too soon. de Imagens exposition

Who’s who...

Nicola Giorgio has 31 years of experience in the restaurant business and has worked at some of Europe’s highest-ranking establishments. He was maître d’ for

on Rua Dias Ferreira in Leblon. A hit among both clients and critics, the establishment won its first prize within its first year of opening. Nicola has also been one of the partners of the award-winning sandwich bar Foccacia since 2006.

Along the 17 years of his career, the sommelier Dionísio Chaves has established himself as one of the country’s most respected professionals. Two-time winner of Veja Rio magazine’s Food & Drink Awards in the Sommelier of the Year category (2011 and 2012). In April 2012 he was the sommelier for the gala dinner held during the Toques ET Clochers auction in Limoux, France. He also received the prize for Best Sommelier of South America in 1999 and 2002 and won second place in the Americas category in 2004.

He has participated in a variety of competitions organized by the International Sommelier Association (ISA) and is currently a technical consultant for wine importers Paralelo 35, CCA/RJ and A&M Corp. Holding. He is an ambassador for the company Enoforum/ Vinhos do Alentejo, and has been a teacher for the Brazilian Association of Sommeliers (ABS) since1998.

Architectural work

Fabrizio Giuliodori, Dionisio Chaves and Nicola Giorgio the Ritz in Milan and coordinated the opening of restaurants in Parma, Venice and Rome for the Baglione Group, as well as managing La Terraza in London.

He arrived in Brazil in 2002 to lead the inauguration of Gero, Forneria and Fasano Al Mare, all part of the Fasano Group. He opened Duo in January 2011, which has won respected awards for its quality wine menu and excellent service. In December 2011, he opened the restaurant and wine bar Bottega del Vino in partnership with Dionísio Chaves, which is located

The North American company Tishman Speyer received the 2012 Master Real Estate Prize in the Commercial Enterprise category for its retrofit of the Edifício Galeria SulAmérica in the centre of Rio de Janeiro.

The prize is awarded by the Brazilian Chapter of the International Real Estate Federation (FIABICI/Brazil) and the São Paulo Real Estate Union (SECOVI/SP).

Inspired by the Prix d’Excellence, awarded by FIBICI International, this is one of the most respected prizes in the real estate market.

Tishman Speyer refitted the premises in the old SulAmérica building with high-level technology while also restoring its cultural and architectural history. Internal frescos, marble staircases, façades and the old clock were restored. The new 28,000-m2 development is made up of office spaces and a ground-floor gallery of restaurants and shops, including branches of Le Lis Blanc, Noir and John John from the Restoque retail group.

The menu Prepared by Nicola Giorgio, the menu contains suggestions for lunchtime starters, main meals and deserts. Some examples include steamed squid and lentil salad, veal ravioli with Parmesan fondue, beef ribs roasted in Chianti with mashed beef ribs roasted in Chianti

potatoes, gnocchi al pesto and crunchy pine nuts and linguine in squid ink with shrimp and asparagus.

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indicadores meeting tn

December

October

7 to 10 - Argentina Argentina Oil & Gas 2013 Local: Buenos Aires, Argentina Phone: +54 11 4322 0916 aog@uniline.com.ar www.aog.com.ar

29 to 31 - Brazil OTC Brasil 2013 Local: Rio de Janeiro, Brazil Phone: (21) 2112 9000 otcbrasil@ibp.org.br www.otcbrasil.org/2013

November 15 to 16 - Netherlland Offshore Energy Local: Amsterdam, Netherlland Phone +0031 10 209 2675 ls@navingo.com www.offshore-energy.biz

21 to 22 - Brazil 13ª Conferência Internacional DATAGRO sobre Açúcar e Etanol Local: São Paulo, Brazil Phone: +55 11 4191 6994 conferencia@datagro.com.br www.conferenciadatagro.com.br

28 to 30 - United Kingdom NOCs & Governments Summit Local: London, UK Tel. 44 20 7978 0029 emcginn@thecwcgroup.com www.thecwcgroup.com

2 to 4 - Mexico Latin Oil & Gas Deepwater Local: Mexico City, Mexico Phone: 44 20 7978 0029 emcginn@thecwcgroup.com www.thecwcgroup.com

2014 March

5 to 7 - USA Deepwater Operations 2013 Local: Galveston, Texas Phone: +1 888 299 8016 registration@pennwell.com www.deepwateroperations.com

24 to 27 - South Korea Gastech Conference & Exhibition Local: Goyang, South Korea Phone: +44 (0) 203 615 2853 paulsinclair@dmgevents.com www.dmgevents.com

April 6 to 8 - Colombia NGV 2013 Colombia Local: Cartagena, Colombia Phone: +39 335 189 3249 info@ngv2013colombia.com www.ngv2013colombia.com

8 to 10 - Spain MCE Deepwater development 2014 Local: Madrid, Spain Phone: (281) 491-5900 bo.howard@questoffshore.com www.questoffshore.com

4 to 7 - USA 4TH World Shale Oil & Gas Local: Houston, TX Phone: +44 20 7978 0025 wsgenq@thecwcgroup.com www.thecwcgroup.com

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

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opinion

by Matthew Halle, Operations Manager at NES Global Talent

The talent gap:

A serious headline We read headlines about a global talent shortage all the time, but it is important that we realise this isn’t just media hype that will go away. Within the oil and gas industry, the talent shortage is a very serious problem across a surprisingly broad range of disciplines and industries and, as a result of limited available resources and the consequential cost increases in actual labour rates and time delays, it is inhibiting project development.

O

ver fifty percent of oil and gas engineers will be eligible to retire in the next five-to-ten years, and the lack of interest in the engineering sector up until recently means that engineers with between ten and 15 years’ experience are in high demand. This is particularly so in Australia, where four of the world’s Largest LNG projects are currently underway.

The skill shortage is also prevalent in the UK, where in some disciplines there is a critical shortage of young people entering the profession. When we look at candidates with specific industry knowledge, again we face shortages. For example, 70 percent of the nuclear industry’s engineers will be eligible to retire by 2025.

So, what are the causes of an industry-wide skill shortage? What about global unemployment levels?

(How can any industry be struggling to find people who want work?) How can the industry alleviate the problem? What can be done to address the talent issues that we are facing? How can talent strategies help?

And what advice is there for the industry in solving a worldwide problem so that the oil and gas industry can work to satisfy the world’s growing demand for energy?

What are the causes? – There are a number of factors that have contributed to the engineering skill shortage worldwide. There has been an increase in activity in key industries (we produce more oil and gas today than ever before) so by default, we need more people to work in the industry. Add to that the ageing population and the attraction of well-qualified new entrants into other industries and away from oil and gas, and it is easy to see that we are facing a very real problem.

We are also working in tougher environments (remote regions and on more technically-challenging projects) so we need people who are flexible with where they work – moving wherever demand is the greatest – and who have the skills and experience needed to work on increasingly complex projects.

The Gulf of Mexico was labelled ‘deepwater’ due to the new depths that drilling had achieved at the time.

Then ‘ultra-deepwater’ drilling in Brazil took the industry to new depths… requiring new and more complex technologies. What next? Unless we have the people who can make it happen working to turn the possibilities into reality, we will not be able to meet demand for energy.

What about unemployment? – Given that there is widespread unemployment globally – especially among the young, but also in skilled and experienced staff – it is not surprising that questions often arise about how any industry can be suffering from a skill shortage. But it is a matter of geographic and skill misalignment within oil and gas, which is a highly specialist industry that requires specific training and skills.

That is why recruitment companies such as NES Global Talent – that hire discipline specific consultants and have a good knowledge about the industries they work in – can prove more valuable to the operators and EPCs they support; they can source the right people by understanding their core skills.

In addition, the large graduate schemes that used to exist have shrunk or disappeared within engineering companies. Some organisations are not able or willing to invest in entry-level training or re-training from other T&B Petroleum 35

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sectors and it appears as though many oil and gas companies are still holding out for candidates who have all of their desired skills instead of showing some flexibility or providing training in order to meet demand.

Alleviating the problem – While there is no such thing as a ‘quick fix’ to addressing the talent shortages that many companies within the oil and gas industry face, it is widely agreed that better workforce planning, better education about what the industry needs, better HR practices for selecting, retaining and training engineers, and firmer partnerships with governments, suppliers and competitors would help the industry to address skill shortages that exist.

Cross training from other industries, such as power and infrastructure, could help the industry to find the skills that it needs. But this will require considerable investment in training and development from hiring companies.

Sophisticated employee retention strategies – including attractive benefits packages – are another consideration for the industry, but again, they come at a price. Thankfully, oil and gas can afford to make that investment in order to reap the rewards of being one of the most desirable industries on the planet to work in.

Global mobility plays a significant part in addressing skill shortages. Find the best people around the world and convince them to move, and you have widened your pool of potential talent tremendously. The industry must make sure that it looks far and wide for the people it needs and must attract talent from every corner of the world if it is to meet global demand for energy.

Companies working in oil and gas must also ensure that forward planning focuses on building brand appeal for attraction and retention of the best people.

Talent planning must combine permanent employees with temporary labour in a way that engages all and achieves desired outcomes seamlessly and safely.

The oil and gas industry needs to work closely with educational establishments and institutions to educate the younger generation about the amazing careers they can establish working as an oil and gas engineer. Schemes such as the Institute of Chemical Engineer ’s (IChemE) Whynotchemeng campaign would help to promote the oil and gas industry to students at an age where they’re making key decisions about their future.

Planning talent strategies – Some would argue that it would require a PhD level of research to address the question of talent strategy in oil and gas efficiently, but the answer must address: 116

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• What tasks must be completed?

• What roles will be needed to complete those tasks (as well as where and for how long)?

• What skills are required in those roles?

• Where can the skills be found or how can they be developed?

• How are the roles filled in a timely and cost-effective manner?

• What is the impact on the broader society?

• How are government, suppliers and competitors going to factor in?

• Is this achievable and sustainable?

Talent strategies should be forward-focused and predict where people are needed and when. It is imperative when forecasting in upstream oil and gas, that enough budget is put in to get the required skills.

Oil operators and EPCs should use the services of manpower specialists such as NES Global Talent to source skills from across the world when they are needed. We have advised oil companies about how and when to source the best personnel for projects and we recently conducted an analysis of candidates completing projects in the Middle East to provide suitable people to hire for an LNG project in Australia. Similar projects could work elsewhere.

Advice for the industry – For companies in oil and gas that are concerned about the skill shortages within the industry, the advice is to establish a robust talent strategy that is effective globally. Partnerships with manpower specialists can help from the start or can be made midway through talent planning to improve efforts.

Get in touch with a specialist global partner to help with talent attraction, recruitment and retention. Find a company with the discipline expertise to understand each area in depth and know what is needed and think as much about building your brand for your internal audience as your external audience. Think in terms of a global talent pool and do not limit your search for the right skills to local nationals.

Be ahead of the game with manpower planning.

Know when candidates are coming to the end of their current assignments (or work with someone who does) so that you can be there first with the right opportunity – at the right price – when they’re looking for new opportunities. Show potential applicants that you offer the best opportunity right here and now for their career development and deliver on your promises. Investment in the recruitment, training and retention of your people is arguably the best investment you will make.

WPC

Powering the future of Latin America With 7,000 subsea systems and over 3,500km of flexible pipelines installed worldwide, our track record of delivering under extreme conditions is second to none.

Our customized, local solutions underpin large scale projects operating in challenging environments across the world, supported by a highly responsive 24/7 global services team and industry-leading expertise.

At GE Oil & Gas, we are delivering innovative subsea solutions that help power Brazil and the world. GE Works. geoilandgas.com

Š 2013 General Electric Company