SÃO PAULO (Dec. 5, 10 a.m. ET) -- Braskem SA and Petróleos Del Perú (PetroPerú) are studying whether to build a petrochemical project in Peru.
São Paulo-based Braskem and PetroPeru, the Peruvian national oil company. signed a memorandum of inderstanding on Nov. 24 to analyze the technical and economic feasibility of a plant capable of making 1.2 million tons of ethylene and polyethylene per year using ethane from the natural gas reserves in the Las Malvinas region.
"The creation of this partnership will drive economic and social development in Peru. The project's great advantage lies in its strategic location on the Pacific coast and its capacity to attend not only the Peruvian market, but also other countries in the Andean region," said Humberto Campodónico, CEO of PetroPerú, in a Nov. 28 news release.
2011-12-05
Petrobras says secures pipeline contract for Comperj refining complex
Petrobras has signed a production and assembly contract for pipelines for its new Comperj refinery in Rio de Janeiro.
The contract with Brazilian engineering company MPE is for the pipeline required for the refinery. In total, the contract includes 12,000 MT of pipeline with 4.5 km (2.8 miles) of extension and 21,700 meters of concrete for foundations.
The Brazilian state controlled oil company announced the contract Tuesday night. Work on the Comperj refinery complex began in 2008.
Brazil's imports gasoline because of a shortage of refining capacity. In 2010, the country imported 505 million liters of gasoline, according to the Brazilian Center for Infrastructure.
The first phase of the Comperj refinery, producing diesel, aviation kerosene, naphta, coke and sulphur for the national market and petrochemical plants is due to start operation in 2013. Comperj's petrochemical units are due to start work in 2017 and the second stage of its refining in 2018. The refinery will have a capacity of 330,000 b/d of crude.
The contract with Brazilian engineering company MPE is for the pipeline required for the refinery. In total, the contract includes 12,000 MT of pipeline with 4.5 km (2.8 miles) of extension and 21,700 meters of concrete for foundations.
The Brazilian state controlled oil company announced the contract Tuesday night. Work on the Comperj refinery complex began in 2008.
Brazil's imports gasoline because of a shortage of refining capacity. In 2010, the country imported 505 million liters of gasoline, according to the Brazilian Center for Infrastructure.
The first phase of the Comperj refinery, producing diesel, aviation kerosene, naphta, coke and sulphur for the national market and petrochemical plants is due to start operation in 2013. Comperj's petrochemical units are due to start work in 2017 and the second stage of its refining in 2018. The refinery will have a capacity of 330,000 b/d of crude.
Techint plan comes days after buying Usiminas stake
RIO DE JANEIRO, Dec 3 (Reuters) - Techint, the Italo-Argentine steel and engineering group, plans to build a steel-rolling mill in Brazil with partner Usiminas, boosting capacity in Latin America's largest economy, the Globo newspaper reported on Saturday.
The rolling mill will be able to process steel from a planned Techint steel project at the Port of Acu near Rio de Janeiro and add to existing production from other group assets in Brazil, Globo said.
The Techint mill at Acu or a Chinese mill planned for the same port will be able to make steel slabs that are the main raw material for a rolling mill, according to Eike Batista, the controlling shareholder of LLX Logistica which owns the Port of Acu and is leasing a mill-site to Techint.
The Techint-Usiminas rolling mill and Techint project at the Port of Acu are expected to cost about $7 billion, the newspaper reported. The rolling mill is likely to be built in Brazil's state of Rio de Janeiro or in the central-highland state of Minas Gerais, the paper added.
The rolling-mill plan is part of Techint's effort to profit from a Brazilian offshore oil boom, the paper said.
Brazil expects to more than triple oil and natural gas output by 2020 to about 7 million barrels a day, allowing the South American country challenge the United States for the role of world's No. 3 oil producer after Russia and Saudi Arabia.
Techint controls TenarisConfab, a Brazilian steel-pipe maker, and bought a 27.7 percent stake in Usiminas, the second-largest Brazilian steelmaker for $2.7 billion on Nov. 28. Usiminas' main shareholder is a Japanese group led by Nippon Steel.
Techint bought the stake in Usiminas through its Ternium and Tenaris units. Tenaris is the world's largest producer of seamless steel pipe, a high-value steel product used in the oil and natural-gas industries.
Ternium is an Argentine steelmaker, that already has a joint venture with Nippon Steel in Mexico.
The rolling mill will be able to process steel from a planned Techint steel project at the Port of Acu near Rio de Janeiro and add to existing production from other group assets in Brazil, Globo said.
The Techint mill at Acu or a Chinese mill planned for the same port will be able to make steel slabs that are the main raw material for a rolling mill, according to Eike Batista, the controlling shareholder of LLX Logistica which owns the Port of Acu and is leasing a mill-site to Techint.
The Techint-Usiminas rolling mill and Techint project at the Port of Acu are expected to cost about $7 billion, the newspaper reported. The rolling mill is likely to be built in Brazil's state of Rio de Janeiro or in the central-highland state of Minas Gerais, the paper added.
The rolling-mill plan is part of Techint's effort to profit from a Brazilian offshore oil boom, the paper said.
Brazil expects to more than triple oil and natural gas output by 2020 to about 7 million barrels a day, allowing the South American country challenge the United States for the role of world's No. 3 oil producer after Russia and Saudi Arabia.
Techint controls TenarisConfab, a Brazilian steel-pipe maker, and bought a 27.7 percent stake in Usiminas, the second-largest Brazilian steelmaker for $2.7 billion on Nov. 28. Usiminas' main shareholder is a Japanese group led by Nippon Steel.
Techint bought the stake in Usiminas through its Ternium and Tenaris units. Tenaris is the world's largest producer of seamless steel pipe, a high-value steel product used in the oil and natural-gas industries.
Ternium is an Argentine steelmaker, that already has a joint venture with Nippon Steel in Mexico.
2011-11-22
Subsea 7 lands Brazilian job
Brazilian giant Petrobras has awarded offshore engineering company Subsea 7 a five-year contract to supply a dedicated deep-water flexible pipelay vessel for operations off Brazil.
Josh Lewis 14 November 2011 09:12 GMT
Subsea 7 said it would build a new flexible pipelay vessel to carry out the contract which is scheduled to start during the second half of 2014 and worth an estimated $500 million.
The new vessel will be equipped for transporting and installing flexible flowlines and umbilicals in water depths of up to 3000 meters and will have a tiltable lay system with a top-tension capability of 550 tonnes, two under-deck storage carousels, a large deck crane and two work-class remotely operated vehicles.
Subsea 7 estimated the total cost of the vessel at $350 million and is expecting delivery during the second half of 2014.
Josh Lewis 14 November 2011 09:12 GMT
Subsea 7 said it would build a new flexible pipelay vessel to carry out the contract which is scheduled to start during the second half of 2014 and worth an estimated $500 million.
The new vessel will be equipped for transporting and installing flexible flowlines and umbilicals in water depths of up to 3000 meters and will have a tiltable lay system with a top-tension capability of 550 tonnes, two under-deck storage carousels, a large deck crane and two work-class remotely operated vehicles.
Subsea 7 estimated the total cost of the vessel at $350 million and is expecting delivery during the second half of 2014.
Brazil workers to decide Petrobras strike Tuesday
RIO DE JANEIRO -(MarketWatch)- The union representing oil workers at Brazil's state-run energy company Petroleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, said that it will meet the company's CEO for last-ditch negotiations later Monday before deciding on a date for a strike that aims to undercut crude oil output.
The Brazilian Oil Workers Federation, or FUP, said it will meet with CEO Jose Sergio Gabrielli at 2000 GMT, a spokeswoman for the union said in a telephone interview. FUP is an umbrella union that negotiates on behalf of 12 affiliated unions across Brazil, representing nearly 60,000 of Petrobras's 75,000 employees.
"We sought this meeting directly with [Gabrielli] to see whether there was some way to advance the negotiations," the spokeswoman said. Petrobras declined to confirm the meeting. Should the meeting with Gabrielli not prove fruitful, FUP and its affiliated unions will meet Tuesday in Rio de Janeiro to decide on a strike date, the spokeswoman said.
The oil workers join a plethora of employee groups calling on Brazilian companies and the government to increase wages and benefits, asking to share in the country's robust economic growth and to offset higher local prices. Bank workers walked off the job for more than two weeks last month in one action, causing delays and long lines at the country's financial institutions.
Two previous proposals made by Petrobras were rejected by workers, including the latest offer made Nov. 14, the spokeswoman said. The oil workers were told that the Nov. 14 offer would be company's last, prompting the search for a dialogue with Petrobras's Gabrielli, the spokeswoman added. Oil workers are seeking a 10% salary increase on top of inflation, as well as other benefit increases, higher safety standards and an end to outsourcing.
Oil workers had previously planned to strike at any time starting from Nov. 16, but delayed a decision until Tuesday after Petrobras made the last proposal.
"If there is some kind of response from Petrobras [on Monday], it could be put up for debate at the Tuesday meeting," the spokeswoman said.
The last major strike at Petrobras took place in July 2008, when oil workers walked off the job for five days to protest work issues and profit-sharing proposals. The strike cost Petrobras about 63,000 barrels of daily crude oil production
The Brazilian Oil Workers Federation, or FUP, said it will meet with CEO Jose Sergio Gabrielli at 2000 GMT, a spokeswoman for the union said in a telephone interview. FUP is an umbrella union that negotiates on behalf of 12 affiliated unions across Brazil, representing nearly 60,000 of Petrobras's 75,000 employees.
"We sought this meeting directly with [Gabrielli] to see whether there was some way to advance the negotiations," the spokeswoman said. Petrobras declined to confirm the meeting. Should the meeting with Gabrielli not prove fruitful, FUP and its affiliated unions will meet Tuesday in Rio de Janeiro to decide on a strike date, the spokeswoman said.
The oil workers join a plethora of employee groups calling on Brazilian companies and the government to increase wages and benefits, asking to share in the country's robust economic growth and to offset higher local prices. Bank workers walked off the job for more than two weeks last month in one action, causing delays and long lines at the country's financial institutions.
Two previous proposals made by Petrobras were rejected by workers, including the latest offer made Nov. 14, the spokeswoman said. The oil workers were told that the Nov. 14 offer would be company's last, prompting the search for a dialogue with Petrobras's Gabrielli, the spokeswoman added. Oil workers are seeking a 10% salary increase on top of inflation, as well as other benefit increases, higher safety standards and an end to outsourcing.
Oil workers had previously planned to strike at any time starting from Nov. 16, but delayed a decision until Tuesday after Petrobras made the last proposal.
"If there is some kind of response from Petrobras [on Monday], it could be put up for debate at the Tuesday meeting," the spokeswoman said.
The last major strike at Petrobras took place in July 2008, when oil workers walked off the job for five days to protest work issues and profit-sharing proposals. The strike cost Petrobras about 63,000 barrels of daily crude oil production
Sinopec to acquire stake in Galp's Brazilian acreage
China’s Sinopec Group, aiming to increase its presence in Brazil, agreed to acquire a 30% stake in the Brazilian unit of Galp Energia SGPS SA for $5.18 billion.
Closing remains subject to approval by the Chinese government. Terms of the agreement call for Sinopec to acquire Galp board seats.
Galp subsidiaries Petrogal Brasil and Galp Brazil Services will issue new shares equivalent to 30% of the enlarged shareholder base, which Sinopec will purchase for $4.8 billion. The state firm will pay an additional $390 million to cover debt.
Galp’s primary assets in Brazil include four deepwater blocks: BM-S-11, BM-S-24, BM-S-8 and BM-S-21 in the Santos basin, Sinopec said.
Analyst Juliet Kerr of IHS Global Insight said the partnership with Sinopec will help Galp Energia finance its share of development costs related to the Tupi, Cernambi, and Iara presalt projects in Brazil in which it participates.
But Kerr noted that the agreement will mark a “significant” boost to Sinopec’s standing in Brazil’s oil and gas industry, especially following its earlier purchase of stakes in the sector from Repsol YPF SA.
The agreement marks the latest in a series of purchases by Chinese companies in Brazil’s offshore oil fields.
Sinopec paid $7.1 billion for a stake in Repsol’s Brazilian assets. Sinochem’s acquired a $3.1 billion stake in Peregrino oil field from Statoil.
Closing remains subject to approval by the Chinese government. Terms of the agreement call for Sinopec to acquire Galp board seats.
Galp subsidiaries Petrogal Brasil and Galp Brazil Services will issue new shares equivalent to 30% of the enlarged shareholder base, which Sinopec will purchase for $4.8 billion. The state firm will pay an additional $390 million to cover debt.
Galp’s primary assets in Brazil include four deepwater blocks: BM-S-11, BM-S-24, BM-S-8 and BM-S-21 in the Santos basin, Sinopec said.
Analyst Juliet Kerr of IHS Global Insight said the partnership with Sinopec will help Galp Energia finance its share of development costs related to the Tupi, Cernambi, and Iara presalt projects in Brazil in which it participates.
But Kerr noted that the agreement will mark a “significant” boost to Sinopec’s standing in Brazil’s oil and gas industry, especially following its earlier purchase of stakes in the sector from Repsol YPF SA.
The agreement marks the latest in a series of purchases by Chinese companies in Brazil’s offshore oil fields.
Sinopec paid $7.1 billion for a stake in Repsol’s Brazilian assets. Sinochem’s acquired a $3.1 billion stake in Peregrino oil field from Statoil.
Repsol finds more oil off Brazilian coast
MADRID — Repsol, Spain's biggest oil group, said Monday it has made a new oil discovery off the coast of Brazil together with Chinese partner Sinopec, Britain's BG Group and Brazil's Petrobras.
The field containing "high quality" crude was discovered nearly 300 kilometres (185 miles) off the coast of Sao Paulo at a depth of 4,830 metres, it said in a statement.
Repsol and its partner Sinopec have a 25 percent stake in the consortium which is led by Petrobras which has 45 percent. The remaining 30 percent is held by BG Group.
In June, the company announced it had discovered two grades of "good quality" oil about 190 kilometres off the coast of Rio de Janeiro.
Last week, Repsol announced its largest-ever oil discovery, saying it had discovered nearly a billion barrels in unconventional oil and gas in Patagonia, a find that doubles its proven reserves in Argentina.
Repsol has a significant portfolio of projects in Brazil, including a producing field, a block under development, two planned pilot projects and 14 exploration blocks of great potential.
The field containing "high quality" crude was discovered nearly 300 kilometres (185 miles) off the coast of Sao Paulo at a depth of 4,830 metres, it said in a statement.
Repsol and its partner Sinopec have a 25 percent stake in the consortium which is led by Petrobras which has 45 percent. The remaining 30 percent is held by BG Group.
In June, the company announced it had discovered two grades of "good quality" oil about 190 kilometres off the coast of Rio de Janeiro.
Last week, Repsol announced its largest-ever oil discovery, saying it had discovered nearly a billion barrels in unconventional oil and gas in Patagonia, a find that doubles its proven reserves in Argentina.
Repsol has a significant portfolio of projects in Brazil, including a producing field, a block under development, two planned pilot projects and 14 exploration blocks of great potential.
Brazil fines Chevron $28 million for oil spill
Sao Paulo, Brazil (CNN) -- Chevron was fined $28 million for an oil spill off the country's coast and could face further penalties, state media reported on Monday.
The leak off Rio de Janeiro state has stopped, said Curt Trennepohl, president of the Brazilian Institute of Environment and Renewable Natural Resources, according to state-run Agencia Brasil. Residual oil in the rocks, however, may still rise to the surface for a few days, he said.
Trennepohl said Chevron was hit with a $28 million fine and could face more penalties if it is shown the company failed in the execution of its emergency plan, Agencia Brasil reported.
Rio de Janeiro Environment Secretary Carlos Minc criticized drilling contractor Transocean, accusing the company of trying to drill at too high a pressure, given the geological characteristics of the seabed.
(Photo: Greenpeace activists protest an oil spill off the coast of Rio de Janeiro, Brazil, on Friday, November 18)
"This accident was avoidable. ... It was incompetence. That is an environmental crime, " he told Brazil's Globo TV.
A Transocean spokesman said the company is cooperating with authorities but declined to provide further information.
"Transocean continues to fully cooperate with Chevron, the operator of the well, and the Brazilian authorities in all aspects of this matter," spokesman Guy Cantwell said.
Transocean owned and operated the Deepwater Horizon drill rig, which exploded last year, kicking off the worst oil spill in U.S. history. The company remains tangled in legal disputes with BP and Halliburton over responsibility for the 2010 gusher. A U.S. government report released in September said all three companies share responsibility for the disaster, which led to more than 200 million gallons of oil being released into the Gulf of Mexico.
Chevron admitted responsibility for the Atlantic oil spill off Brazil's coast in a statement Sunday but said it was still trying to calculate how much oil had leaked at its exploration site off Rio de Janeiro.
Brazil's National Petroleum Agency had estimated the total volume of oil released at between 5,000 and 8,000 barrels (between 210,000 and 336,000 gallons), according to Chevron.
"Chevron takes full responsibility for this incident," Chevron Brazil country manager George Buck said in the company's statement. "We are committed to deploying resources until the sheen can no longer be detected."
Over the weekend, Minc accused Chevron of underestimating the amount of oil that had leaked.
Buck denied that accusation, telling Agencia Brasil that it was difficult to define the real dimension of the problem.
Last week Brazil's Federal Police agency said it was investigating the spill, saying those responsible could face sentences of up to five years in jail if found guilty.
Brazil's oil and gas regulator has said the spill is dispersing and moving away from the Brazilian coast, so it does not appear to threaten Rio's world-famous beaches. But it does raise questions about how prepared Brazil is for the development of its offshore "pre-salt" deposits, which are expected to turn the country into a major oil exporter in the coming years.
The leak off Rio de Janeiro state has stopped, said Curt Trennepohl, president of the Brazilian Institute of Environment and Renewable Natural Resources, according to state-run Agencia Brasil. Residual oil in the rocks, however, may still rise to the surface for a few days, he said.
Trennepohl said Chevron was hit with a $28 million fine and could face more penalties if it is shown the company failed in the execution of its emergency plan, Agencia Brasil reported.
Rio de Janeiro Environment Secretary Carlos Minc criticized drilling contractor Transocean, accusing the company of trying to drill at too high a pressure, given the geological characteristics of the seabed.
"This accident was avoidable. ... It was incompetence. That is an environmental crime, " he told Brazil's Globo TV.
A Transocean spokesman said the company is cooperating with authorities but declined to provide further information.
"Transocean continues to fully cooperate with Chevron, the operator of the well, and the Brazilian authorities in all aspects of this matter," spokesman Guy Cantwell said.
Transocean owned and operated the Deepwater Horizon drill rig, which exploded last year, kicking off the worst oil spill in U.S. history. The company remains tangled in legal disputes with BP and Halliburton over responsibility for the 2010 gusher. A U.S. government report released in September said all three companies share responsibility for the disaster, which led to more than 200 million gallons of oil being released into the Gulf of Mexico.
Chevron admitted responsibility for the Atlantic oil spill off Brazil's coast in a statement Sunday but said it was still trying to calculate how much oil had leaked at its exploration site off Rio de Janeiro.
Brazil's National Petroleum Agency had estimated the total volume of oil released at between 5,000 and 8,000 barrels (between 210,000 and 336,000 gallons), according to Chevron.
"Chevron takes full responsibility for this incident," Chevron Brazil country manager George Buck said in the company's statement. "We are committed to deploying resources until the sheen can no longer be detected."
Over the weekend, Minc accused Chevron of underestimating the amount of oil that had leaked.
Buck denied that accusation, telling Agencia Brasil that it was difficult to define the real dimension of the problem.
Last week Brazil's Federal Police agency said it was investigating the spill, saying those responsible could face sentences of up to five years in jail if found guilty.
Brazil's oil and gas regulator has said the spill is dispersing and moving away from the Brazilian coast, so it does not appear to threaten Rio's world-famous beaches. But it does raise questions about how prepared Brazil is for the development of its offshore "pre-salt" deposits, which are expected to turn the country into a major oil exporter in the coming years.
Technip and Odebrecht Óleo & Gás receive award for 2 flexible pipeline installation vessels
Date: 11/18/2011
The joint venture formed by Technip (50%) and Odebrecht Oil & Gas (OOG, 50%) has received a letter of award from Petrobras for the charter and operation, during a fixed period of five years, of two identical flexible pipeline installation vessels for a value of approximately USD 1 billion.
Characterized by their high pipelay tension capacity of 550 tonnes, the twin vessels will be employed principally to install umbilical and flexible flowlines and risers to connect subsea wells to floating production units in waters up to over 2,500 m deep offshore Brazil, including in the pre-salt area. The provision of installation engineering services is included in a JV´s scope.
Technip and OOG have formed a JV project team which will manage the construction of the vessels at the Daewoo Shipbuilding and Marine Engineering shipyard in the Republic of Korea (South Korea) where OOG is currently completing the construction of the third and the fourth of 4 drilling units. Subsequently, vessel operations and the provision of marine management and engineering services during the charter phase will be handled by the JV in Rio de Janeiro.
Jorge Luiz Mitidieri, Executive VP of OOG, stated "OOG was the only national company pre-qualified to participate in the bid and this award further strengthens and consolidates OOG´s presence in the Subsea market where we have invested heavily in capacity and skills since our decision to enter the segment in 2009. Our proven track record in the construction and operation of offshore drilling assets and our partnership with Technip are key to the success of the project and we believe will provide significant potential to leverage synergies in the management and operation of the vessels and mitigate risks during project execution. This opportunity was also an important indication that our client Petrobras trust in our expertise and capability to deliver and serve".
Frédéric Delormel, Executive Vice President and COO Subsea of Technip, declared "Technip has relentlessly maintained a leading presence in subsea production development offshore Brazil since 1977 and we are extremely pleased to be at the forefront of this new phase of Petrobras development into deeper and more challenging waters. Odebrecht has a similar tradition, coupled with a solid track record in the recent and ongoing delivery of deepwater drilling units with DSME. We fully expect that this robust partnership and the distinguishing characteristics of these new assets will enable the cost effective supply of high local content flexible and umbilical subsea productions solutions to Petrobras for decades to come".
The joint venture formed by Technip (50%) and Odebrecht Oil & Gas (OOG, 50%) has received a letter of award from Petrobras for the charter and operation, during a fixed period of five years, of two identical flexible pipeline installation vessels for a value of approximately USD 1 billion.
Characterized by their high pipelay tension capacity of 550 tonnes, the twin vessels will be employed principally to install umbilical and flexible flowlines and risers to connect subsea wells to floating production units in waters up to over 2,500 m deep offshore Brazil, including in the pre-salt area. The provision of installation engineering services is included in a JV´s scope.
Technip and OOG have formed a JV project team which will manage the construction of the vessels at the Daewoo Shipbuilding and Marine Engineering shipyard in the Republic of Korea (South Korea) where OOG is currently completing the construction of the third and the fourth of 4 drilling units. Subsequently, vessel operations and the provision of marine management and engineering services during the charter phase will be handled by the JV in Rio de Janeiro.
Jorge Luiz Mitidieri, Executive VP of OOG, stated "OOG was the only national company pre-qualified to participate in the bid and this award further strengthens and consolidates OOG´s presence in the Subsea market where we have invested heavily in capacity and skills since our decision to enter the segment in 2009. Our proven track record in the construction and operation of offshore drilling assets and our partnership with Technip are key to the success of the project and we believe will provide significant potential to leverage synergies in the management and operation of the vessels and mitigate risks during project execution. This opportunity was also an important indication that our client Petrobras trust in our expertise and capability to deliver and serve".
Frédéric Delormel, Executive Vice President and COO Subsea of Technip, declared "Technip has relentlessly maintained a leading presence in subsea production development offshore Brazil since 1977 and we are extremely pleased to be at the forefront of this new phase of Petrobras development into deeper and more challenging waters. Odebrecht has a similar tradition, coupled with a solid track record in the recent and ongoing delivery of deepwater drilling units with DSME. We fully expect that this robust partnership and the distinguishing characteristics of these new assets will enable the cost effective supply of high local content flexible and umbilical subsea productions solutions to Petrobras for decades to come".
2011-11-08
Petrobras strike - Accidents in Petrobras offshore oil platforms
Workers at Brazilian state oil company Petrobras will go on strike on 16 November to demand safer working conditions and better pay, union leaders said on Monday, in a conflict that may push global oil prices higher.
A series of accidents on Petrobras offshore oil platforms and fallout from the massive BP oil spill in the Gulf of Mexico have led Brazil's oil workers to step up demands for better safety standards on offshore platforms.
"In seven rounds of negotiations, the company ignored workers demands ... principally with respect to the issue of security," the FUP oil workers umbrella union said.
It noted the strike would go on "for an undetermined amount of time", according to Reuters.
A full-blown work stoppage could force Petrobras to boost crude imports to keep refineries running and meet booming fuel demand in Brazil, the world's seventh-largest economy.
It could also trim Petrobras' exports, putting upward pressure on crude oil prices that have rallied in recent weeks on hopes of a resolution to the euro zone crisis.
But the union's threat may not lead to a strike, and if it does action may be limited. Brazilian labour law places restrictions on strike action that could halt operations at economically essential or potentially dangerous installations, a category that applies to much of the Rio de Janeiro-based company's operations.
Petrobras also faces pressure from shareholders to avoid work stoppages that could reduce cash flow as it carries out a $225 billion five-year expansion plan, the world's largest corporate spending programme.
In 2008, union leaders called off a planned strike after Petrobras offered to increase profit sharing with workers.
The FUP said on Monday it is seeking a salary increase equal to inflation plus 10% and "a security policy that defends life".
Petrobras said in an emailed response that it had offered a 9% salary increase and a bonus of 90% of one month's salary, Reuters reported.
Brazilian inflation is running at an annual rate of about 7%.
"The company made offers on several items related to the health and retirement plans of the employees, (and) safety conditions, among other issues," the company said.
A strike would follow similar labour stoppages in recent weeks by Brazilian workers including bank and postal employees seeking a greater share of the country's economic growth.
Continued union demands for higher wages have boosted worries that salary increases could spur Brazil's inflation that is already running above the government's target.
Petrobras has faced growing complaints from unions about conditions of platforms, particularly older platforms in the Campos basin where most of Brazil's oil is produced.
The labour ministry in May ordered Petrobras to shut the P-65 platform on safety concerns. A fire on a diesel fuel tanker killed one worker in September.
Petrobras halted platforms in January and February this year following a brief fire and a gas leak.
Petrobras is a net exporter of oil but still imports crude to meet technical limitations of local refineries. Most of Brazil's output is heavy crude which is harder and more expensive to refine that lighter grades.
The company imported 376,000 barrels per day of crude in the first half of 2011, compared to crude exports of 461,000 bpd in the same period.
Brent crude prices rose on Monday to their highest level in more than seven weeks, driven by hopes for resolution to Europe's debt crisis and worries about Iran's nuclear program. US crude futures gained for a fourth day in a row to settle at the highest level in 14 weeks.
Petrobras' chief financial officer Almir Barbassa said earlier this year that the company has seen an increase in government-ordered platform shutdowns in the wake of the Gulf of Mexico spill, considered one of the worst environmental disasters ever in the US.
The company insists its operations are safe.
A series of accidents on Petrobras offshore oil platforms and fallout from the massive BP oil spill in the Gulf of Mexico have led Brazil's oil workers to step up demands for better safety standards on offshore platforms.
"In seven rounds of negotiations, the company ignored workers demands ... principally with respect to the issue of security," the FUP oil workers umbrella union said.
It noted the strike would go on "for an undetermined amount of time", according to Reuters.
A full-blown work stoppage could force Petrobras to boost crude imports to keep refineries running and meet booming fuel demand in Brazil, the world's seventh-largest economy.
It could also trim Petrobras' exports, putting upward pressure on crude oil prices that have rallied in recent weeks on hopes of a resolution to the euro zone crisis.
But the union's threat may not lead to a strike, and if it does action may be limited. Brazilian labour law places restrictions on strike action that could halt operations at economically essential or potentially dangerous installations, a category that applies to much of the Rio de Janeiro-based company's operations.
Petrobras also faces pressure from shareholders to avoid work stoppages that could reduce cash flow as it carries out a $225 billion five-year expansion plan, the world's largest corporate spending programme.
In 2008, union leaders called off a planned strike after Petrobras offered to increase profit sharing with workers.
The FUP said on Monday it is seeking a salary increase equal to inflation plus 10% and "a security policy that defends life".
Petrobras said in an emailed response that it had offered a 9% salary increase and a bonus of 90% of one month's salary, Reuters reported.
Brazilian inflation is running at an annual rate of about 7%.
"The company made offers on several items related to the health and retirement plans of the employees, (and) safety conditions, among other issues," the company said.
A strike would follow similar labour stoppages in recent weeks by Brazilian workers including bank and postal employees seeking a greater share of the country's economic growth.
Continued union demands for higher wages have boosted worries that salary increases could spur Brazil's inflation that is already running above the government's target.
Petrobras has faced growing complaints from unions about conditions of platforms, particularly older platforms in the Campos basin where most of Brazil's oil is produced.
The labour ministry in May ordered Petrobras to shut the P-65 platform on safety concerns. A fire on a diesel fuel tanker killed one worker in September.
Petrobras halted platforms in January and February this year following a brief fire and a gas leak.
Petrobras is a net exporter of oil but still imports crude to meet technical limitations of local refineries. Most of Brazil's output is heavy crude which is harder and more expensive to refine that lighter grades.
The company imported 376,000 barrels per day of crude in the first half of 2011, compared to crude exports of 461,000 bpd in the same period.
Brent crude prices rose on Monday to their highest level in more than seven weeks, driven by hopes for resolution to Europe's debt crisis and worries about Iran's nuclear program. US crude futures gained for a fourth day in a row to settle at the highest level in 14 weeks.
Petrobras' chief financial officer Almir Barbassa said earlier this year that the company has seen an increase in government-ordered platform shutdowns in the wake of the Gulf of Mexico spill, considered one of the worst environmental disasters ever in the US.
The company insists its operations are safe.
Petrobras to triple crude exports in 2020 - CEO
SINGAPORE, Nov 1 (Reuters) - Petrobras expects to
triple crude exports to between 1.5 million and 1.6 million
barrels per day (bpd) by 2020, with CEO Jose Sergio Gabrielli on
Tuesday naming the United States and China as the firm's key
markets.
The Brazilian state oil firm expects to boost crude output
to 3.9 million bpd by 2015 and 4.9 million bpd by 2020 from 2.1
million bpd this year, which would make Brazil one of the
world's three largest oil producers, Gabrielli said.
"We are forecasting to become a very big net exporter by
2020, not only of oil products but also of crude," Gabrielli
told the Singapore International Energy Week conference.
Petrobras currently exports 520,000 bpd of crude.
Crude oil exports to the United States and China would
double to 400,000-450,000 bpd each, he added.
"China is going to be the same size as the United States.
Right now they are about the same at about 200,000 bpd to
220,000 bpd of exports. That will be growing to about twice that
size. We hope that we can also increase exports to other Asian
countries," he said.
Global fuel consumption would grow around 3-4 percent for
the next five years, Gabrielli said, which would support prices
in the long term.
Petrobras plans to spend more than half of its 2011-2015
capital expenditure of $225 billion to tap the ultra deep-water
subsalt, an area the size of New York state which is believed to
hold at least 50 billion barrels of oil.
Refining, transport and sales activities will account for 31
percent of total investment. "Our main challenge is to extract
resources," Gabrielli said.
The company will ramp up output at its pre-salt Lula field
to 120,000 bpd, up from 36,900 bpd now, when a second well is
added next year, he said.
Petrobras assumes a Brent oil price of between $80 and $95
per barrel for cash flow purposes, Gabrielli said.
"At $80 we can generate $125 billion net cash flow after
payment of dividends and at $95 we can generate $149 billion in
next five years of net cash flow," he said.
To raise funds, Petrobras has also earmarked $13.6 billion
worth of assets to sell as part of the five-year investment
plan.
DOWNSTREAM
Brazil will continue to import gasoline and diesel before
the first of four new refineries start up in 2013, Gabrielli
said.
Gasoline imports tripled this year after ethanol prices
surged while Brazil buys 600,000-1 million bpd of diesel from
India each month, Petrobras executives said.
Four new refineries will add 1.4 million bpd of oil products
output, the CEO said, lifting refinery capacity to around 3.2
million bpd by 2020.
Gabrielli forecast total product exports in 2020 to reach
67,000 bpd.
He said that the company's crude refining will account for
39 percent of Latin America's total projected capacity by 2016.
The vast majority of Petrobras' revenue comes from sales in
Brazil.
Petrobras plans to double its share of Brazil's
ethanol market to 12 percent in 2015 by nearly quadrupling its
ethanol output to 5.6 million cubic metres, Gabrielli said. It
produces 1.5 million cubic metres of ethanol now.
Table of Petrobras refinery projects
Refinery Capacity (bpd) Start-up date
Abreu E Lima 230,000 2013
Comperj (1st train) 165,000 2015
Premium I (1st train) 300,000 2016
Premium II 300,000 2017
Comperj (2nd train) 165,000 2018
Premium I (2nd train) 300,000 2019
Total 1,460,000
Source: Petrobras
triple crude exports to between 1.5 million and 1.6 million
barrels per day (bpd) by 2020, with CEO Jose Sergio Gabrielli on
Tuesday naming the United States and China as the firm's key
markets.
The Brazilian state oil firm expects to boost crude output
to 3.9 million bpd by 2015 and 4.9 million bpd by 2020 from 2.1
million bpd this year, which would make Brazil one of the
world's three largest oil producers, Gabrielli said.
"We are forecasting to become a very big net exporter by
2020, not only of oil products but also of crude," Gabrielli
told the Singapore International Energy Week conference.
Petrobras currently exports 520,000 bpd of crude.
Crude oil exports to the United States and China would
double to 400,000-450,000 bpd each, he added.
"China is going to be the same size as the United States.
Right now they are about the same at about 200,000 bpd to
220,000 bpd of exports. That will be growing to about twice that
size. We hope that we can also increase exports to other Asian
countries," he said.
Global fuel consumption would grow around 3-4 percent for
the next five years, Gabrielli said, which would support prices
in the long term.
Petrobras plans to spend more than half of its 2011-2015
capital expenditure of $225 billion to tap the ultra deep-water
subsalt, an area the size of New York state which is believed to
hold at least 50 billion barrels of oil.
Refining, transport and sales activities will account for 31
percent of total investment. "Our main challenge is to extract
resources," Gabrielli said.
The company will ramp up output at its pre-salt Lula field
to 120,000 bpd, up from 36,900 bpd now, when a second well is
added next year, he said.
Petrobras assumes a Brent oil price of between $80 and $95
per barrel for cash flow purposes, Gabrielli said.
"At $80 we can generate $125 billion net cash flow after
payment of dividends and at $95 we can generate $149 billion in
next five years of net cash flow," he said.
To raise funds, Petrobras has also earmarked $13.6 billion
worth of assets to sell as part of the five-year investment
plan.
DOWNSTREAM
Brazil will continue to import gasoline and diesel before
the first of four new refineries start up in 2013, Gabrielli
said.
Gasoline imports tripled this year after ethanol prices
surged while Brazil buys 600,000-1 million bpd of diesel from
India each month, Petrobras executives said.
Four new refineries will add 1.4 million bpd of oil products
output, the CEO said, lifting refinery capacity to around 3.2
million bpd by 2020.
Gabrielli forecast total product exports in 2020 to reach
67,000 bpd.
He said that the company's crude refining will account for
39 percent of Latin America's total projected capacity by 2016.
The vast majority of Petrobras' revenue comes from sales in
Brazil.
Petrobras plans to double its share of Brazil's
ethanol market to 12 percent in 2015 by nearly quadrupling its
ethanol output to 5.6 million cubic metres, Gabrielli said. It
produces 1.5 million cubic metres of ethanol now.
Table of Petrobras refinery projects
Refinery Capacity (bpd) Start-up date
Abreu E Lima 230,000 2013
Comperj (1st train) 165,000 2015
Premium I (1st train) 300,000 2016
Premium II 300,000 2017
Comperj (2nd train) 165,000 2018
Premium I (2nd train) 300,000 2019
Total 1,460,000
Source: Petrobras
Oil's first major petrochemical company makes its mark
04 November 2011 10:33 [Source: ICB]
Braskem intends to expand its operations - while staying true to its Brazilian roots
Brazil's leading petrochemical company is making an impact on the global stage through acquisitions, innovation and investment
Brazilian polymers major Braskem is delivering on its promise to expand into new territories. The company is implementing projects in Mexico and Venezuela, and also has production plants in the US and Germany following the acquisition of US-based Sunoco's polypropylene (PP) business in 2010 and US-based Dow Chemical's PP business this year.
With the purchase of the Dow PP business, Braskem says it has become the leading PP producer in the US, the world's largest PP consuming country, with 1.425m tonnes/year of capacity. The acquisition, concluded in September, gives Braskem two plants in the US (Freeport and Seadrift, both in Texas) and two in Germany (Wesseling and Schkopau). The Sunoco PP acquisition gave Braskem its "initial beachhead" in the US, says Luiz de Mendonca, executive vice president for the company's international business. "With the Dow acquisition, we are able to expand that presence."
Further investments in the US could involve expanding into new product areas beyond PP, he suggests. Braskem, like most petrochemicals producers with operations in North America, is monitoring opportunities to invest in new ethylene capacity to take advantage of the rich ethane reserves in the Marcellus Shale natural gas deposit, which is largely concentrated in Pennsylvania.
"Our strategy is focused on the Americas, which has advantaged feedstock," he says. "Look at the new reserves in Brazil, US shale reserves and the gas cracker project in Mexico, as well as the potential of countries such as Venezuela and Peru." Owning the Dow PP plants in Germany also will allow Braskem to participate in the European market as a local player. But Braskem's growth strategy will remain focused on the Americas, Mendonca went on to add.
Braskem is implementing a cracker and polyethylene (PE) project in Mexico and a PP project in Venezuela. The Mexican project, Ethylene XXI, is more advanced. A joint venture with Mexico's Idesa, it comprises an ethane cracker plus three downstream PE units with a combined 1.05m tonne/year capacity. The project is located in Veracruz province and will primarily supply the Mexican market, as well as the US Gulf Coast. Start-up is scheduled for 2015.
In Venezuela, Braskem has two projects, one for PP and another for PE, in partnership with state-owned chemicals producer Pequiven. But progress has been slow and, while work on the PP project is continuing, the PE project has been put on hold.
Propilsur, the PP joint venture created by Braskem and Pequiven, has moved the PP project to Paraguana in Venezuela's Falcon state so it can receive propylene feedstock from the Paraguana refinery complex. The project is now expected to have a minimum capacity of 300,000 tonnes/year. Braskem says engineering work is underway.
Mendonca acknowledges that the Venezuelan projects have taken longer than expected, but says this is not unusual for such large-scale projects.
The Rio Polimeros (Riopol) project in Brazil, which has been integrated into Braskem, took 10 years to develop, "and the Mexico project has been up and down for 20 years," he says. "We are creating a new industry [in Venezuela] and such a long lead time is absolutely normal."
It is important for Braskem to have a presence in Venezuela, the region's main oil-producing country, he stresses.
The Venezuela PP project is progressing faster than the PE project because it has a simpler configuration. The PP project will take its feedstock from existing refineries while the PE project involves gas separation to produce the ethane, plus an ethane cracker, Mendonca explains.
BRAZILIAN GROWTH
As well as pursuing overseas projects, Braskem is expanding its Brazilian operations to take advantage of the booming economy and expected growth in resins demand. Projects include a polyvinyl chloride (PVC) plant in Marechal Deodoro, Alagoas, in northeast Brazil, and a butadiene (BD) project in Triunfo in the southern state of Rio Grande do Sul. In the longer term, Braskem intends to invest in the Comperj petrochemicals project being implemented by parent group Petrobras in Itaborai in the southeastern state of Rio de Janeiro.
Braskem is optimistic about resins demand growth in 2012, although demand this year has been disappointing. Brazilian gross domestic product (GDP) is forecast to grow by 3.5% in 2012, and resin demand is expected rise at a higher rate, says Rui Chammas, Braskem's vice president for polymers. GDP growth is also forecast for most other South American countries, he notes.
This year, Brazilian resins demand has been slower than expected, says Chammas. Last year ended with strong expectations for economic growth and with high inventory levels across the resins supply chain, but growth was slowed as a result of budget controls implemented by the Brazilian government under the new president Dilma Rousseff, he explains.
With lower-than-expected economic growth, inventory levels in the plastics supply chain were adjusted and, as a result, resins demand was flat in the first half of this year. Demand has improved in the third quarter, Chammas notes, and is more in line with expectations.
State-owned energy group Petrobras's Comperj refinery and petrochemicals project is expected to help meet rising domestic resins demand in the second half of the decade.
The project includes downstream plants for PE, PP, styrene, ethylene glycol (EG), benzene and paraxylene (PX). Braskem intends to partner Petrobras in the ethylene cracker and polyolefins projects. The petrochemicals part of the Comperj project is expected to start up in 20162018 (see below). "Comperj will provide important new ethylene production in Brazil. It's important for us to be part of that," says Chammas.
Petrobras said in August that it has reconfigured the project, resulting in increases in capacities for PE and PP. The project, which will include a second refinery, is expected to have the capacity to produce 960,000 tonnes/year of PE and 900,000 tonnes/year of PP.
Precise details of the cracker and poly-olefins projects have yet to be defined, says Chammas. "Braskem and Petrobras are working on the detailed configuration of the complex", he says.
To meet rising domestic and regional demand until the Comperj project comes on stream, Braskem is investing in debottleneckings and new production plants for PE, PP and polyvinyl chloride (PVC) in Brazil, says Chammas. A 200,000 tonne/year PVC plant is scheduled to start up in Alagoas next year, raising Braskem's PVC capacity at the site to 460,000 tonnes/year. The company is also planning a 100,000 tonne/year BD project in Triunfo. The plant is expected to begin production in 2013, boosting Braskem's BD capacity by 30%.
The third pillar to Braskem's growth strategy, in addition to domestic and international growth, is the development of bio-based materials (see article on bio-based materials on page 19).
The company already produces bio-based ethylene from sugarcane ethanol for the production of green PE, and is studying a second, larger-scale green PE project. It also plans to produce propylene from bio-based ethylene for the production of green PP.
To succeed with such ambitious projects requires an entrepreneurial spirit, suggests Mendonca. "For the green PE production, we have the feedstock in Brazil, the plant in Brazil, most of my clients are in Europe and a lot of the research is being conducted in the US. To put all that together requires an entrepreneurial type of company."
For the Mexican project, too, Braskem had to take risks.
The project had been on the drawing board, in various incarnations, for more than 10 years, with Braskem appearing as a late entrant in 2008. Key to the project's success was the development of a different feedstock pricing model with Mexico's state-owned energy group Pemex, Mendonca says.
Taking advantage of the shale gas play in the US also will require a different risk profile to that of a traditional chemicals company, he adds.
Keeping up with Brazilian demand also will be challenge. Resins demand is expected to be boosted as a result of huge investments in infrastructure as the country prepares to host the World Cup in 2014 and the Summer Olympics two years later.
But for Braskem, it is not enough to focus on the domestic market, says Mendonca. "We need to expand our reach beyond Brazil."
COMPERJ PROJECT DEVELOPS
BRAZILIAN STATE-owned energy group Petrobras has reconfigured its Comperj refinery and petrochemicals complex in Itaborai, Rio de Janeiro.
The project will include a second refinery and will use ethane, in addition to naphtha, as feedstock for its petrochemicals production.
With the additional feedstock, the polyethylene (PE) capacity will be raised to 960,000 tonnes/year instead of 800,000 tonnes/year, while the PP capacity will be 900,000 tonnes/year instead of 850,000 tonnes/year.
Braskem, which is part-owned by Petrobras, will partner the state-owned company for the polyolefins projects.
Petrochemicals production at Comperj will also include 400,000 tonnes/year of styrene, 380,000 tonnes/year of ethylene glycol (EG), 154,000 tonnes/year of BD, 355,000 tonnes/year of benzene and 480,000 tonnes/year of paraxylene (PX).
Petrobras said the project will no longer include polyethylene terephthalate (PET) production. Instead, the company is expected to supply PX output from Comperj to its new PET and fibers complex under construction at the Port of Suape in Ipojuca, Pernambuco, northeast Brazil.
The group has already started construction work on the Comperj project and expects to start up the cracker, one PP train and the remaining downstream petrochemicals plants in 2016. A second PP train is scheduled to start up in 2018.
Petrobras said the addition of a second refinery train reflects increased demand for refinery products.
The first refinery is scheduled to start up in 2013 and the second in 2018.
Braskem intends to expand its operations - while staying true to its Brazilian roots
Brazil's leading petrochemical company is making an impact on the global stage through acquisitions, innovation and investment
Brazilian polymers major Braskem is delivering on its promise to expand into new territories. The company is implementing projects in Mexico and Venezuela, and also has production plants in the US and Germany following the acquisition of US-based Sunoco's polypropylene (PP) business in 2010 and US-based Dow Chemical's PP business this year.
With the purchase of the Dow PP business, Braskem says it has become the leading PP producer in the US, the world's largest PP consuming country, with 1.425m tonnes/year of capacity. The acquisition, concluded in September, gives Braskem two plants in the US (Freeport and Seadrift, both in Texas) and two in Germany (Wesseling and Schkopau). The Sunoco PP acquisition gave Braskem its "initial beachhead" in the US, says Luiz de Mendonca, executive vice president for the company's international business. "With the Dow acquisition, we are able to expand that presence."
Further investments in the US could involve expanding into new product areas beyond PP, he suggests. Braskem, like most petrochemicals producers with operations in North America, is monitoring opportunities to invest in new ethylene capacity to take advantage of the rich ethane reserves in the Marcellus Shale natural gas deposit, which is largely concentrated in Pennsylvania.
"Our strategy is focused on the Americas, which has advantaged feedstock," he says. "Look at the new reserves in Brazil, US shale reserves and the gas cracker project in Mexico, as well as the potential of countries such as Venezuela and Peru." Owning the Dow PP plants in Germany also will allow Braskem to participate in the European market as a local player. But Braskem's growth strategy will remain focused on the Americas, Mendonca went on to add.
Braskem is implementing a cracker and polyethylene (PE) project in Mexico and a PP project in Venezuela. The Mexican project, Ethylene XXI, is more advanced. A joint venture with Mexico's Idesa, it comprises an ethane cracker plus three downstream PE units with a combined 1.05m tonne/year capacity. The project is located in Veracruz province and will primarily supply the Mexican market, as well as the US Gulf Coast. Start-up is scheduled for 2015.
In Venezuela, Braskem has two projects, one for PP and another for PE, in partnership with state-owned chemicals producer Pequiven. But progress has been slow and, while work on the PP project is continuing, the PE project has been put on hold.
Propilsur, the PP joint venture created by Braskem and Pequiven, has moved the PP project to Paraguana in Venezuela's Falcon state so it can receive propylene feedstock from the Paraguana refinery complex. The project is now expected to have a minimum capacity of 300,000 tonnes/year. Braskem says engineering work is underway.
Mendonca acknowledges that the Venezuelan projects have taken longer than expected, but says this is not unusual for such large-scale projects.
The Rio Polimeros (Riopol) project in Brazil, which has been integrated into Braskem, took 10 years to develop, "and the Mexico project has been up and down for 20 years," he says. "We are creating a new industry [in Venezuela] and such a long lead time is absolutely normal."
It is important for Braskem to have a presence in Venezuela, the region's main oil-producing country, he stresses.
The Venezuela PP project is progressing faster than the PE project because it has a simpler configuration. The PP project will take its feedstock from existing refineries while the PE project involves gas separation to produce the ethane, plus an ethane cracker, Mendonca explains.
BRAZILIAN GROWTH
As well as pursuing overseas projects, Braskem is expanding its Brazilian operations to take advantage of the booming economy and expected growth in resins demand. Projects include a polyvinyl chloride (PVC) plant in Marechal Deodoro, Alagoas, in northeast Brazil, and a butadiene (BD) project in Triunfo in the southern state of Rio Grande do Sul. In the longer term, Braskem intends to invest in the Comperj petrochemicals project being implemented by parent group Petrobras in Itaborai in the southeastern state of Rio de Janeiro.
Braskem is optimistic about resins demand growth in 2012, although demand this year has been disappointing. Brazilian gross domestic product (GDP) is forecast to grow by 3.5% in 2012, and resin demand is expected rise at a higher rate, says Rui Chammas, Braskem's vice president for polymers. GDP growth is also forecast for most other South American countries, he notes.
This year, Brazilian resins demand has been slower than expected, says Chammas. Last year ended with strong expectations for economic growth and with high inventory levels across the resins supply chain, but growth was slowed as a result of budget controls implemented by the Brazilian government under the new president Dilma Rousseff, he explains.
With lower-than-expected economic growth, inventory levels in the plastics supply chain were adjusted and, as a result, resins demand was flat in the first half of this year. Demand has improved in the third quarter, Chammas notes, and is more in line with expectations.
State-owned energy group Petrobras's Comperj refinery and petrochemicals project is expected to help meet rising domestic resins demand in the second half of the decade.
The project includes downstream plants for PE, PP, styrene, ethylene glycol (EG), benzene and paraxylene (PX). Braskem intends to partner Petrobras in the ethylene cracker and polyolefins projects. The petrochemicals part of the Comperj project is expected to start up in 20162018 (see below). "Comperj will provide important new ethylene production in Brazil. It's important for us to be part of that," says Chammas.
Petrobras said in August that it has reconfigured the project, resulting in increases in capacities for PE and PP. The project, which will include a second refinery, is expected to have the capacity to produce 960,000 tonnes/year of PE and 900,000 tonnes/year of PP.
Precise details of the cracker and poly-olefins projects have yet to be defined, says Chammas. "Braskem and Petrobras are working on the detailed configuration of the complex", he says.
To meet rising domestic and regional demand until the Comperj project comes on stream, Braskem is investing in debottleneckings and new production plants for PE, PP and polyvinyl chloride (PVC) in Brazil, says Chammas. A 200,000 tonne/year PVC plant is scheduled to start up in Alagoas next year, raising Braskem's PVC capacity at the site to 460,000 tonnes/year. The company is also planning a 100,000 tonne/year BD project in Triunfo. The plant is expected to begin production in 2013, boosting Braskem's BD capacity by 30%.
The third pillar to Braskem's growth strategy, in addition to domestic and international growth, is the development of bio-based materials (see article on bio-based materials on page 19).
The company already produces bio-based ethylene from sugarcane ethanol for the production of green PE, and is studying a second, larger-scale green PE project. It also plans to produce propylene from bio-based ethylene for the production of green PP.
To succeed with such ambitious projects requires an entrepreneurial spirit, suggests Mendonca. "For the green PE production, we have the feedstock in Brazil, the plant in Brazil, most of my clients are in Europe and a lot of the research is being conducted in the US. To put all that together requires an entrepreneurial type of company."
For the Mexican project, too, Braskem had to take risks.
The project had been on the drawing board, in various incarnations, for more than 10 years, with Braskem appearing as a late entrant in 2008. Key to the project's success was the development of a different feedstock pricing model with Mexico's state-owned energy group Pemex, Mendonca says.
Taking advantage of the shale gas play in the US also will require a different risk profile to that of a traditional chemicals company, he adds.
Keeping up with Brazilian demand also will be challenge. Resins demand is expected to be boosted as a result of huge investments in infrastructure as the country prepares to host the World Cup in 2014 and the Summer Olympics two years later.
But for Braskem, it is not enough to focus on the domestic market, says Mendonca. "We need to expand our reach beyond Brazil."
COMPERJ PROJECT DEVELOPS
BRAZILIAN STATE-owned energy group Petrobras has reconfigured its Comperj refinery and petrochemicals complex in Itaborai, Rio de Janeiro.
The project will include a second refinery and will use ethane, in addition to naphtha, as feedstock for its petrochemicals production.
With the additional feedstock, the polyethylene (PE) capacity will be raised to 960,000 tonnes/year instead of 800,000 tonnes/year, while the PP capacity will be 900,000 tonnes/year instead of 850,000 tonnes/year.
Braskem, which is part-owned by Petrobras, will partner the state-owned company for the polyolefins projects.
Petrochemicals production at Comperj will also include 400,000 tonnes/year of styrene, 380,000 tonnes/year of ethylene glycol (EG), 154,000 tonnes/year of BD, 355,000 tonnes/year of benzene and 480,000 tonnes/year of paraxylene (PX).
Petrobras said the project will no longer include polyethylene terephthalate (PET) production. Instead, the company is expected to supply PX output from Comperj to its new PET and fibers complex under construction at the Port of Suape in Ipojuca, Pernambuco, northeast Brazil.
The group has already started construction work on the Comperj project and expects to start up the cracker, one PP train and the remaining downstream petrochemicals plants in 2016. A second PP train is scheduled to start up in 2018.
Petrobras said the addition of a second refinery train reflects increased demand for refinery products.
The first refinery is scheduled to start up in 2013 and the second in 2018.
2011-10-11
Technip Awarded a Services Contract for a Fertilizer Complex in Brazil
Technip, within the framework of a cooperation partnership with Haldor Topsoe, was awarded a contract for providing basic and front end engineering services on a Petrobras grassroots fertilizer complex to be located at Uberaba -- State of Minas Gerais, Brazil.
The fertilizer complex will comprise a 1,500 metric tons per day ammonia unit based on Haldor Topsoe technology, and the complete utilities and offsites systems necessary for the operation of the complex.
The basic engineering design will be developed by Haldor Topsoe and Technip operating center in Rome, Italy while Technip operating center in Rio de Janeiro, Brazil will execute the front end engineering design. The overall engineering activities are scheduled to be completed within the first half of 2012.
The complex, which is scheduled to be in operation within the second semester of 2015, will contribute to reduce Brazil's dependence on ammonia import.
Technip is a world leader in project management, engineering and construction for the energy industry.
From the deepest Subsea oil & gas developments to the largest and most complex Offshore and Onshore infrastructures, our 25,000 people are constantly offering the best solutions and most innovative technologies to meet the world's energy challenges.
Present in 48 countries, Technip has state-of-the-art industrial assets on all continents and operates a fleet of specialized vessels for pipeline installation and subsea construction.
Technip shares are listed on the NYSE Euronext Paris exchange and the USA over-the-counter (OTC) market as an American Depositary Receipt (adr:TKPPK).
SOURCE: Technip
The fertilizer complex will comprise a 1,500 metric tons per day ammonia unit based on Haldor Topsoe technology, and the complete utilities and offsites systems necessary for the operation of the complex.
The basic engineering design will be developed by Haldor Topsoe and Technip operating center in Rome, Italy while Technip operating center in Rio de Janeiro, Brazil will execute the front end engineering design. The overall engineering activities are scheduled to be completed within the first half of 2012.
The complex, which is scheduled to be in operation within the second semester of 2015, will contribute to reduce Brazil's dependence on ammonia import.
Technip is a world leader in project management, engineering and construction for the energy industry.
From the deepest Subsea oil & gas developments to the largest and most complex Offshore and Onshore infrastructures, our 25,000 people are constantly offering the best solutions and most innovative technologies to meet the world's energy challenges.
Present in 48 countries, Technip has state-of-the-art industrial assets on all continents and operates a fleet of specialized vessels for pipeline installation and subsea construction.
Technip shares are listed on the NYSE Euronext Paris exchange and the USA over-the-counter (OTC) market as an American Depositary Receipt (adr:TKPPK).
SOURCE: Technip
Halliburton must pay $200M for defective bolts
HOUSTON
Halliburton Co. said Wednesday that as a result of an arbitration panel ruling, it must pay Barracuda & Caratinga Leasing Co. $200 million related to a claim Barracuda filed against a former Halliburton subsidiary.
Before KBR Inc. was spun off from the Houston oil services company in 2007, it had a contract with Barracuda & Caratinga for the development of the Barracuda and Caratinga oil fields off the coast of Brazil.
Barracuda & Caratinga later claimed that certain subsea bolts used in the project were defective and the arbitration panel recently ruled that KBR is liable for the cost of replacing the bolts.
Halliburton said Wednesday that it's "pursuing all possible avenues" to appeal the ruling.
When Halliburton and KBR split, Halliburton agreed to pay all the costs and expenses, cash settlements or cash arbitration awards, related to the replacement of the bolts, the company said.
The company said it expects to record a third-quarter charge to discontinued operations as a result of the arbitration award.
In morning trading, Halliburton shares fell 47 cents to $33.99.
Halliburton Co. said Wednesday that as a result of an arbitration panel ruling, it must pay Barracuda & Caratinga Leasing Co. $200 million related to a claim Barracuda filed against a former Halliburton subsidiary.
Before KBR Inc. was spun off from the Houston oil services company in 2007, it had a contract with Barracuda & Caratinga for the development of the Barracuda and Caratinga oil fields off the coast of Brazil.
Barracuda & Caratinga later claimed that certain subsea bolts used in the project were defective and the arbitration panel recently ruled that KBR is liable for the cost of replacing the bolts.
Halliburton said Wednesday that it's "pursuing all possible avenues" to appeal the ruling.
When Halliburton and KBR split, Halliburton agreed to pay all the costs and expenses, cash settlements or cash arbitration awards, related to the replacement of the bolts, the company said.
The company said it expects to record a third-quarter charge to discontinued operations as a result of the arbitration award.
In morning trading, Halliburton shares fell 47 cents to $33.99.
JPMorgan’s Gavea to Buy 5% Stake in Odebrecht Unit to Be No. 3 Shareholder
JPMorgan Chase & Co (JPM)’s Gavea Investimentos Ltda., a private-equity and hedge fund set up by former Brazilian central banker Arminio Fraga, agreed to buy a 5 percent stake in Odebrecht SA’s oil and gas unit to become the third-largest shareholder.
The investment in Odebrecht Oil & Gas will be Gavea’s largest holding, Fraga said at a press conference in Rio de Janeiro today, without providing financial terms of the deal.
“Gavea will help us enhance our financial analysis, give us access to international markets and knowledge of what is going on in the world,” Roberto Ramos, the head of the oil and gas unit, told reporters at the event. “They will help us identify trends in order for us to get the right strategy.”
Odebrecht is expanding its oil and gas services unit to supply rigs and platforms for Petroleo Brasileiro SA and other producers that are tapping the largest crude discoveries in the Americas in more than three decades. Petrobras, as Brazil’s state-run oil producer is known, plans to spend $224.7 billion in five years, the oil industry’s largest investment program, as it exploits ultra-deep offshore deposits that may cost five times more to develop than major fields in Mexico.
JPMorgan’s Highbridge Capital Management agreed last year to buy 55 percent of Rio de Janeiro-based Gavea, which manages more than $7.2 billion of investments. Fraga is a former fund manager for billionaire George Soros.
‘Main’ Petrobras Partner
“We intend to be the main partner for Petrobras and the foreign companies operating in Brazil,” Ramos said.
Odebrecht Oil & Gas will invest about $2.5 billion through 2014 and is seeking opportunities outside Brazil, including Angola and the Gulf of Mexico, he said. The company expects to generate more than $1 billion in revenue next year, Ramos said.
“The petroleum industry has so much room to grow that we see it as a genuine long-term investment that’s not so exposed to the economic cycle,” Fraga said.
Gavea will use its Fund 4 to buy the stake, he said, adding that this will be the second investment in Odebrecht after buying a stake in the company’s real estate unit. Gavea previously invested in OGX Petroleo & Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, and later sold its stake, he said.
Temasek Holdings Pte, Singapore’s state-owned investment company, owns about 14 percent of Odebrecht Oil & Gas, making it the second-largest shareholder, said Marcelo Odebrecht, president of Odebrecht SA. Temasek paid $400 million for the stake, the company said in an October 2010 statement.
The investment in Odebrecht Oil & Gas will be Gavea’s largest holding, Fraga said at a press conference in Rio de Janeiro today, without providing financial terms of the deal.
“Gavea will help us enhance our financial analysis, give us access to international markets and knowledge of what is going on in the world,” Roberto Ramos, the head of the oil and gas unit, told reporters at the event. “They will help us identify trends in order for us to get the right strategy.”
Odebrecht is expanding its oil and gas services unit to supply rigs and platforms for Petroleo Brasileiro SA and other producers that are tapping the largest crude discoveries in the Americas in more than three decades. Petrobras, as Brazil’s state-run oil producer is known, plans to spend $224.7 billion in five years, the oil industry’s largest investment program, as it exploits ultra-deep offshore deposits that may cost five times more to develop than major fields in Mexico.
JPMorgan’s Highbridge Capital Management agreed last year to buy 55 percent of Rio de Janeiro-based Gavea, which manages more than $7.2 billion of investments. Fraga is a former fund manager for billionaire George Soros.
‘Main’ Petrobras Partner
“We intend to be the main partner for Petrobras and the foreign companies operating in Brazil,” Ramos said.
Odebrecht Oil & Gas will invest about $2.5 billion through 2014 and is seeking opportunities outside Brazil, including Angola and the Gulf of Mexico, he said. The company expects to generate more than $1 billion in revenue next year, Ramos said.
“The petroleum industry has so much room to grow that we see it as a genuine long-term investment that’s not so exposed to the economic cycle,” Fraga said.
Gavea will use its Fund 4 to buy the stake, he said, adding that this will be the second investment in Odebrecht after buying a stake in the company’s real estate unit. Gavea previously invested in OGX Petroleo & Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, and later sold its stake, he said.
Temasek Holdings Pte, Singapore’s state-owned investment company, owns about 14 percent of Odebrecht Oil & Gas, making it the second-largest shareholder, said Marcelo Odebrecht, president of Odebrecht SA. Temasek paid $400 million for the stake, the company said in an October 2010 statement.
Petrobras Delays Saipem and Technip’s Gas Plants, CEO Says
Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil producer, delayed plans to use floating natural-gas plants supplied by Saipem SpA (SPM), Technip SA (TEC) and SBN Offshore NV until after 2015, said its chief executive officer.
Petrobras has chosen to use pipelines to transport gas from fields in deep waters of the Atlantic Ocean to maximize the fuel’s value, CEO Jose Sergio Gabrielli told journalists today in London. A new pipeline will be online before the end of 2014 and Petrobras may use the floating plants after 2015 to help develop the largest oil discoveries in the Western Hemisphere in more than 30 years, he said.
Gabrielli said two bids were “attractive,” without naming the companies. The plants, which cost more than $3 billion, convert the gas into a liquid for transportation by ships.
Petrobras had been reviewing bids from France’s Technip, SBM Offshore of the Netherlands and Italy’s Saipem to build floating natural-gas units.
Petrobras has chosen to use pipelines to transport gas from fields in deep waters of the Atlantic Ocean to maximize the fuel’s value, CEO Jose Sergio Gabrielli told journalists today in London. A new pipeline will be online before the end of 2014 and Petrobras may use the floating plants after 2015 to help develop the largest oil discoveries in the Western Hemisphere in more than 30 years, he said.
Gabrielli said two bids were “attractive,” without naming the companies. The plants, which cost more than $3 billion, convert the gas into a liquid for transportation by ships.
Petrobras had been reviewing bids from France’s Technip, SBM Offshore of the Netherlands and Italy’s Saipem to build floating natural-gas units.
Saipem acquires site for the development of a fabrication yard in Brazil
Source: Saipem
Date: 10/10/2011 16:47
Saipem has agreed the acquisition of 100% of TPG (Terminal Portuário do Guarujá), a company which fully owns, as a perpetual concession, an area of 35 hectares in Guarujá, within the industrial hub of Santos, the largest port of South America, in the state of São Paulo.
The area is strategically located, approximately 350 kilometers from Santos Basin, the offshore Brazilian region where ultra-deep water pre salt fields are being discovered, and approximately 650 kilometers from Campos Basin, the other most important Brazilian offshore basin.
Saipem will develop the area through the construction of a fabrication yard, for subsea and floating structures, and of a logistics base. In the new yard, Saipem will carry out activities, which are complementary to the services provided by the highly specialized ultra-deep water fleet recently built by the company. The activities will satisfy the particularly ambitious Brazilian local content requirements in the high-tech industry of ultra-deep water subsea development.
The new yard will cost approximately $300 million, including the amount for the purchase of TPG, and is expected to be completed within two and a half years, in accordance with a timetable coherent with the use of the yard for the development of the pre salt fields.
Date: 10/10/2011 16:47
Saipem has agreed the acquisition of 100% of TPG (Terminal Portuário do Guarujá), a company which fully owns, as a perpetual concession, an area of 35 hectares in Guarujá, within the industrial hub of Santos, the largest port of South America, in the state of São Paulo.
The area is strategically located, approximately 350 kilometers from Santos Basin, the offshore Brazilian region where ultra-deep water pre salt fields are being discovered, and approximately 650 kilometers from Campos Basin, the other most important Brazilian offshore basin.
Saipem will develop the area through the construction of a fabrication yard, for subsea and floating structures, and of a logistics base. In the new yard, Saipem will carry out activities, which are complementary to the services provided by the highly specialized ultra-deep water fleet recently built by the company. The activities will satisfy the particularly ambitious Brazilian local content requirements in the high-tech industry of ultra-deep water subsea development.
The new yard will cost approximately $300 million, including the amount for the purchase of TPG, and is expected to be completed within two and a half years, in accordance with a timetable coherent with the use of the yard for the development of the pre salt fields.
2011-10-03
Dresser-Rand Selected to Supply Compression Systems and Related Maintenance Services for Eight FPSO
Source: Dresser-Rand
Date: 10/03/2011 17:40
Dresser-Rand has been awarded compression equipment and services valued at more than $700 million by Lula and Guará. The equipment, which includes up to 80 DATUM compressor trains, will be installed on eight (8) "replicant" floating, production, storage and offloading (FPSO) vessels. Six of these vessels will be located in the Lula field (formerly known as Tupi) and two in the Guara field. Training, aftermarket services and two 10-year maintenance contracts are also included as part of the award.
According to Vincent R. Volpe Jr., Dresser-Rand's President and CEO, "We are proud to announce this significant award, and, more importantly, appreciative of the confidence that Petrobras and its partners have placed in us to supply all the compression trains for all services on these eight FPSOs. We believe that this is a clear statement by a highly respected Client of their confidence in our Company's technology, execution capability and ongoing technical and field support. The award for all of the compression trains on this project reflects our Company's strength of offerings in the Upstream Segment, which we project will be the largest area of growth in the Oil and Gas markets in the coming years."
According to Jesus Pacheco, Dresser-Rand's executive vice president, New Equipment Worldwide, "We believe in the value proposition our technology can bring to our end user Clients in this market. On this program, we bring proven leading-edge technology to increase the throughput, maintainability and reliability of these key assets. Building on previous compression solutions we have delivered for the Petrobras Pilot I, II and III FPSOs, we again eliminated the need for additional topsides equipment, specifically, separate CO2 pumping systems, saving space and weight, reducing the complexity of the overall plant, while increasing reliability. As the sole solutions provider for all topsides compression equipment, we are able to ensure all services are fully integrated to optimize overall plant operability. In addition, we have also maximized standardization of spare parts, maintenance practices and control systems to reduce inventory and maintenance costs.
"It is also important to note the positive impact this technology has on making these assets more environmentally sustainable. Higher compressor efficiencies possible by the use of our DATUM product line reduce the carbon footprint of these FPSOs as they require less power to meet the specified duties. With higher efficiency, better maintainability and higher reliability, and a smaller carbon footprint, we directly contribute to reducing the life cycle costs of the assets, which makes our Clients more competitive in the markets they serve."
Consistent with the Company's commitment to support localization initiatives in its served markets, a high portion of added value on this program will be performed in Brazil. This will include sourcing, project management and engineering, further development of local service support capabilities and packaging in a newly planned facility in the Industrial Corridor near Sao Paulo, which will further expand the Company's in-country service capabilities.
On September 6, 2011, Dresser-Rand disclosed that it had been selected as the supplier for all the compression needs of these FPSOs. However, at the time, the Company cautioned that any actual award remained subject to the approval of Petrobras' Board of Directors and its Partners. Those approvals have now been obtained. More than $400 million and $70 million will be reflected in its third quarter 2011 New Units and Aftermarket bookings, respectively. The Aftermarket booking amount is consistent with the Company's accounting policy to only book the portion of the Aftermarket orders that will be delivered in the first 15-months of long-term service agreements.
On the basis of this project the Company reiterates its guidance that the new unit bookings for 2011 may be at the top end of, or even exceed, the guidance previously provided of $1.4 to $1.6 billion.
Date: 10/03/2011 17:40
Dresser-Rand has been awarded compression equipment and services valued at more than $700 million by Lula and Guará. The equipment, which includes up to 80 DATUM compressor trains, will be installed on eight (8) "replicant" floating, production, storage and offloading (FPSO) vessels. Six of these vessels will be located in the Lula field (formerly known as Tupi) and two in the Guara field. Training, aftermarket services and two 10-year maintenance contracts are also included as part of the award.
According to Vincent R. Volpe Jr., Dresser-Rand's President and CEO, "We are proud to announce this significant award, and, more importantly, appreciative of the confidence that Petrobras and its partners have placed in us to supply all the compression trains for all services on these eight FPSOs. We believe that this is a clear statement by a highly respected Client of their confidence in our Company's technology, execution capability and ongoing technical and field support. The award for all of the compression trains on this project reflects our Company's strength of offerings in the Upstream Segment, which we project will be the largest area of growth in the Oil and Gas markets in the coming years."
According to Jesus Pacheco, Dresser-Rand's executive vice president, New Equipment Worldwide, "We believe in the value proposition our technology can bring to our end user Clients in this market. On this program, we bring proven leading-edge technology to increase the throughput, maintainability and reliability of these key assets. Building on previous compression solutions we have delivered for the Petrobras Pilot I, II and III FPSOs, we again eliminated the need for additional topsides equipment, specifically, separate CO2 pumping systems, saving space and weight, reducing the complexity of the overall plant, while increasing reliability. As the sole solutions provider for all topsides compression equipment, we are able to ensure all services are fully integrated to optimize overall plant operability. In addition, we have also maximized standardization of spare parts, maintenance practices and control systems to reduce inventory and maintenance costs.
"It is also important to note the positive impact this technology has on making these assets more environmentally sustainable. Higher compressor efficiencies possible by the use of our DATUM product line reduce the carbon footprint of these FPSOs as they require less power to meet the specified duties. With higher efficiency, better maintainability and higher reliability, and a smaller carbon footprint, we directly contribute to reducing the life cycle costs of the assets, which makes our Clients more competitive in the markets they serve."
Consistent with the Company's commitment to support localization initiatives in its served markets, a high portion of added value on this program will be performed in Brazil. This will include sourcing, project management and engineering, further development of local service support capabilities and packaging in a newly planned facility in the Industrial Corridor near Sao Paulo, which will further expand the Company's in-country service capabilities.
On September 6, 2011, Dresser-Rand disclosed that it had been selected as the supplier for all the compression needs of these FPSOs. However, at the time, the Company cautioned that any actual award remained subject to the approval of Petrobras' Board of Directors and its Partners. Those approvals have now been obtained. More than $400 million and $70 million will be reflected in its third quarter 2011 New Units and Aftermarket bookings, respectively. The Aftermarket booking amount is consistent with the Company's accounting policy to only book the portion of the Aftermarket orders that will be delivered in the first 15-months of long-term service agreements.
On the basis of this project the Company reiterates its guidance that the new unit bookings for 2011 may be at the top end of, or even exceed, the guidance previously provided of $1.4 to $1.6 billion.
2011-09-21
Petrobras forecasts huge jump in crude exports
Brazil’s Petrobras expects oil exports to rise by 46% by 2014 and to more than triple by the end of the decade as it brings its huge subsalt fields onstream.
Crude shipments will reach 734,000 barrels per day within three years and 1.735 million bpd by 2020, according to Petrobras marketing official Leoncio Ackstein who was speaking at a conference in Singapore.
Exports will rise from a projected 505,000 bpd this year to 534,000 bpd. The oil will come from the 849,000 bpd of the company’s 11 export grades of crude it projects it will produce next year. Petrobras’ output is currently just shy of 2 million bpd.
The company expects production to reach 2.8 million bpd in 2014 and rocket to near 5 million bpd by the end of the decade.
Petrobras is targeting Asian markets for its expanding oil output as more subsalt projects such as the giant Lula field ramp up towards full production. Asian countries, particularly China, are positioning themselves to capture a significant slice of the expected boom in exports once Petrobras develops its subsalt reserves.
China has already signed a loans-for-oil deal with Petrobras and its oil companies have expressed interest in partnering with Petrobras in future subsalt exploration blocks still to be auctioned off by the Brazilian government.
On a visit to Brazil this year, US President Barack Obama also said the US wanted to be a major customer for Brazilian oil. Obama has come under attack for giving Petrobras US$2 billion in financing via the US Import-Export Bank to allow it buy equipment and services in the US for its ultra-deep sea drilling campaign while at the same time opposing relaxing strict regulations inhibiting deep-sea drilling off the US coast.
Crude shipments will reach 734,000 barrels per day within three years and 1.735 million bpd by 2020, according to Petrobras marketing official Leoncio Ackstein who was speaking at a conference in Singapore.
Exports will rise from a projected 505,000 bpd this year to 534,000 bpd. The oil will come from the 849,000 bpd of the company’s 11 export grades of crude it projects it will produce next year. Petrobras’ output is currently just shy of 2 million bpd.
The company expects production to reach 2.8 million bpd in 2014 and rocket to near 5 million bpd by the end of the decade.
Petrobras is targeting Asian markets for its expanding oil output as more subsalt projects such as the giant Lula field ramp up towards full production. Asian countries, particularly China, are positioning themselves to capture a significant slice of the expected boom in exports once Petrobras develops its subsalt reserves.
China has already signed a loans-for-oil deal with Petrobras and its oil companies have expressed interest in partnering with Petrobras in future subsalt exploration blocks still to be auctioned off by the Brazilian government.
On a visit to Brazil this year, US President Barack Obama also said the US wanted to be a major customer for Brazilian oil. Obama has come under attack for giving Petrobras US$2 billion in financing via the US Import-Export Bank to allow it buy equipment and services in the US for its ultra-deep sea drilling campaign while at the same time opposing relaxing strict regulations inhibiting deep-sea drilling off the US coast.
2011-09-13
Technip and Global Industries Agree to Merge
Date: 09/12/2011 16:01
Technip announced Monday an agreement to acquire the entire share capital of Global Industries and reinforce its leadership in the fast-growing subsea segment of oil services. The two companies have entered into a definitive merger agreement whereby Technip will pay US$8.00 per Global Industries share. The transaction values Global Industries at US$1,073 million (EUR768 million at current exchange rates), including approximately US$136 million of net debt. The Board of Directors of Global Industries has unanimously approved the transaction.
The transaction price represents a 55% premium to Global Industries' share closing price on September 9, 2011, the last day prior to announcement of the transaction. The transaction is to be funded using existing cash balances and credit facilities.
Global Industries brings to Technip its complementary subsea know-how, assets and experience, comprising 2,300 employees operating 14 vessels, including notably two newly-built leading edge S-Lay vessels, as well as strong positions in the Gulf of Mexico (US and Mexican waters), Asia-Pacific and the Middle East.
Technip's global presence, world-class technologies, assets and services and strong project management track record will realize the full value and potential of Global Industries' know-how, assets and experience, and broaden opportunities for Global Industries' employees.
The acquisition of Global Industries reinforces Technip's leadership in the fast-growing subsea market. Strong revenue synergies are expected as the acquisition will substantially increase Technip's current capabilities and expand its addressable market by around 30% in deep-to-shore subsea infrastructure. Cost synergies are estimated to be at least US$30 million.
Given the anticipated synergies, the transaction is expected to be accretive to Technip's earnings per share by around 5 to 7% in 2013.
The transaction is expected to close early in 2012. The management teams of Global Industries and Technip will work closely together to define the integration plan. Thierry Pilenko, Chairman and Chief Executive Officer of Technip, said:
"The acquisition of Global Industries reinforces Technip's leadership in Subsea, one of our three market segments alongside Onshore and Offshore. The subsea market looks likely in 2011 to show a record amount of orders for our industry and our own backlog at end-June 2011 is above its previous peak. We see that our customers continue to firm up a substantial number of large offshore developments with Brazil, the Gulf of Mexico, West Africa and Asia Pacific leading the way to drive future growth. Our investment in Global Industries substantially expands our addressable market in subsea. Global Industries' capabilities, know-how and experience, notably in S-Lay and Heavy Lift, add to our already unique vertically integrated range of products and services, enabling us to offer our clients greater value in the execution of complex projects from deep-to-shore. We expect that the application of Technip's own skills in offshore and subsea developments, its commercial footprint and its project management experience will drive a rapid deployment of the Global Industries teams and assets on customer projects. The transaction is expected to meet our hurdle rate, create value for Technip's shareholders, and raise earnings per share starting by around 5 to 7% in 2013."
Technip announced Monday an agreement to acquire the entire share capital of Global Industries and reinforce its leadership in the fast-growing subsea segment of oil services. The two companies have entered into a definitive merger agreement whereby Technip will pay US$8.00 per Global Industries share. The transaction values Global Industries at US$1,073 million (EUR768 million at current exchange rates), including approximately US$136 million of net debt. The Board of Directors of Global Industries has unanimously approved the transaction.
The transaction price represents a 55% premium to Global Industries' share closing price on September 9, 2011, the last day prior to announcement of the transaction. The transaction is to be funded using existing cash balances and credit facilities.
Global Industries brings to Technip its complementary subsea know-how, assets and experience, comprising 2,300 employees operating 14 vessels, including notably two newly-built leading edge S-Lay vessels, as well as strong positions in the Gulf of Mexico (US and Mexican waters), Asia-Pacific and the Middle East.
Technip's global presence, world-class technologies, assets and services and strong project management track record will realize the full value and potential of Global Industries' know-how, assets and experience, and broaden opportunities for Global Industries' employees.
The acquisition of Global Industries reinforces Technip's leadership in the fast-growing subsea market. Strong revenue synergies are expected as the acquisition will substantially increase Technip's current capabilities and expand its addressable market by around 30% in deep-to-shore subsea infrastructure. Cost synergies are estimated to be at least US$30 million.
Given the anticipated synergies, the transaction is expected to be accretive to Technip's earnings per share by around 5 to 7% in 2013.
The transaction is expected to close early in 2012. The management teams of Global Industries and Technip will work closely together to define the integration plan. Thierry Pilenko, Chairman and Chief Executive Officer of Technip, said:
"The acquisition of Global Industries reinforces Technip's leadership in Subsea, one of our three market segments alongside Onshore and Offshore. The subsea market looks likely in 2011 to show a record amount of orders for our industry and our own backlog at end-June 2011 is above its previous peak. We see that our customers continue to firm up a substantial number of large offshore developments with Brazil, the Gulf of Mexico, West Africa and Asia Pacific leading the way to drive future growth. Our investment in Global Industries substantially expands our addressable market in subsea. Global Industries' capabilities, know-how and experience, notably in S-Lay and Heavy Lift, add to our already unique vertically integrated range of products and services, enabling us to offer our clients greater value in the execution of complex projects from deep-to-shore. We expect that the application of Technip's own skills in offshore and subsea developments, its commercial footprint and its project management experience will drive a rapid deployment of the Global Industries teams and assets on customer projects. The transaction is expected to meet our hurdle rate, create value for Technip's shareholders, and raise earnings per share starting by around 5 to 7% in 2013."
2011-08-01
Petrobras completes the acquisition of Gas Brasiliano Distribuidora for $271 million
Petrobras Gás S.A. (Gaspetro) completed the acquisition of Gas Brasiliano Distribuidora (GBD), a natural gas distribution utility operating in the northwestern region of the state of São Paulo. The operation was concluded this Friday, July 29. Previously, the utility was controlled by Italy's ENI International B.V.
The transaction was worth approximately $271 million after adjustments for working capital variations provided for under the share purchase agreement signed by Gaspetro and ENI. The final amount is still subject to adjustments related to working capital existing on July 31, 2011.
GBD holds an exclusive concession for natural gas distribution activities in the northwestern state of São Paulo, in an area encompassing 375 municipalities. It supplies the region’s industrial, commercial, residential and transportation needs. In 2010, the company’s distribution network added up to 755 km, and it traded some 650 thousand cubic meters of gas per day. The investments foreseen under GBD's business plan, as approved by the State of São Paulo Sanitation and Energy Regulation Agency (ARSESP) in the company's latest tariff review, are expected to reach at least R$106.2 million in the five-year period ranging from 2010 to 2014. They are expected to be used to expand the distribution network and to grow the company's sales to 1.2 million cubic meters per day by 2014. GBD's 30-year concession agreement began in December 1999, and may be extended for 20 years.
This acquisition will position Petrobras in the distribution segment in the largest Brazilian natural gas market, which is located near the entrance of the gas supplied by Bolivia and transported over the GASBOL, and close to the gas reserves in Southeastern Brazil, including those coming from the pre-salt area.
As announced in a statement to the market issued on May 27, 2010, Petrobras, through its subsidiary Petrobras Gás S.A., signed an agreement to acquire the totality of the shares of GBD with ENI International B.V. The transaction was subject to approval by the relevant regulatory bodies in Brazil. With the consent of ARSESP, granted on April 19, 2011, and the signing of the addendum to GBD's concession agreement, on July 18, 2011, all conditions precedent were met, and the transaction, as provided for in the agreement, was closed today.
The transaction was worth approximately $271 million after adjustments for working capital variations provided for under the share purchase agreement signed by Gaspetro and ENI. The final amount is still subject to adjustments related to working capital existing on July 31, 2011.
GBD holds an exclusive concession for natural gas distribution activities in the northwestern state of São Paulo, in an area encompassing 375 municipalities. It supplies the region’s industrial, commercial, residential and transportation needs. In 2010, the company’s distribution network added up to 755 km, and it traded some 650 thousand cubic meters of gas per day. The investments foreseen under GBD's business plan, as approved by the State of São Paulo Sanitation and Energy Regulation Agency (ARSESP) in the company's latest tariff review, are expected to reach at least R$106.2 million in the five-year period ranging from 2010 to 2014. They are expected to be used to expand the distribution network and to grow the company's sales to 1.2 million cubic meters per day by 2014. GBD's 30-year concession agreement began in December 1999, and may be extended for 20 years.
This acquisition will position Petrobras in the distribution segment in the largest Brazilian natural gas market, which is located near the entrance of the gas supplied by Bolivia and transported over the GASBOL, and close to the gas reserves in Southeastern Brazil, including those coming from the pre-salt area.
As announced in a statement to the market issued on May 27, 2010, Petrobras, through its subsidiary Petrobras Gás S.A., signed an agreement to acquire the totality of the shares of GBD with ENI International B.V. The transaction was subject to approval by the relevant regulatory bodies in Brazil. With the consent of ARSESP, granted on April 19, 2011, and the signing of the addendum to GBD's concession agreement, on July 18, 2011, all conditions precedent were met, and the transaction, as provided for in the agreement, was closed today.
2011-06-29
Challenges temper growth in Brazil
There’s no doubt that Brazil’s plastics market continues to grow — but market veterans say there’s work to be done before pouring a good, strong caipirinha to celebrate.
“There’s no problem with finding growth,” plastics executive Jose Ricardo Roriz said at Brasilplast 2011, held 9-13 May in São Paulo. “That’s expected to continue during the next year. The problem is competitiveness, because our cost to produce is high.”
Moving forward, an abundance of small companies will be a key issue for the Brazilian industry to face. “We have close to 12,000 processors, but 90% of them have less than 100 employees,” Roriz added. “We haven’t seen consolidation yet, and a lot of these companies need to improve their overall business.”
Roriz has a valuable vantage point as president of both Abiplast — Brazil’s main plastics trade association — and Vitopel, which ranks as one of Brazil’s largest makers of biaxially oriented PP film, with annual sales of more than $400m (€272.9m). Vitopel is based in Argentina, but operates two of its three film plants in Brazil.
Roriz’s expectation of future growth was evident by the crowds at Brasilplast, which drew roughly 65,000 attendees and more than 1,300 exhibitors. At the event, Abiplast provided updated statistics that showed the number of processors operating in Brazil shot up almost 30% in the 2005-09 period and now totals almost 11,500.
Brazilian plastics processors rang up sales of $18bn (€12.3bn) in 2010, but the market still had a $1.5bn (€1bn) trade deficit in finished plastic products. The number of employees working for Brazilian plastics processors also rocketed up almost 40% during 2005-09 and now is near 350,000.
This trend is in line with recent Brazilian economic growth that’s averaged 5-6% in recent years and is expected to clock in at 4.5% in 2011. Brazil — the world’s fifth-largest country with more than 190 million residents —– now boasts a gross domestic product of $2.1 trillion (€1.4 trillion). That number accounts for almost half of the GDP of the entire Latin American region, well ahead of Mexico at 25%.
The plastics growth trend has been boosted by growth in Brazil’s middle class, which totaled 102 million in 2010 — more than 60% larger than that group was in 2005. This growing middle class is spending more on many plastic items, including durable goods. And there’s still room for growth, as Brazil’s per-capita consumption of polyethylene, polypropylene and PVC in 2008 was less than 51 pounds — far below the US average of 167 pounds and the European average of 150 pounds.
Brazil — and Latin America in general — also is benefiting from a solid political climate, according to Rina Quijada, owner of IntelliChem, a Houston-based consulting firm with a focus on Latin America. “Most of the region is politically stable, unlike in prior years,” she said.
Resin consumption
Growth also has led to greater resin consumption. Brazilian PE demand topped 5.5 billion pounds last year, with PP demand exceeding 3.3 billion pounds and polystyrene demand coming close to 900 million pounds. PE accounted for almost 40% of the nation’s overall resin demand, with PP having a 25% share, according to Abiplast. Brazil’s total resin consumption grew more than% in 2005-10, and consumption of PE alone is expected to average almost 7% growth between 2010 and 2015.
For plastic end markets in Brazil, food led the way in 2010 at almost 26%, with construction and non-food packaging each at just under 15%. Among processing methods, extrusion generated 57% of all processing activity, with injection molding a distant second at 19%.
Geographically, Brazilian plastics processing is heavily balanced toward the southeastern portion of the country, which includes São Paulo. Some 85% of Brazil’s processors are located there. The region also accounts for 80% of the country’s resin consumption, Abiplast said.
But the Brazilian plastics sector is not without its challenges. One market watcher estimated that as many as 5,000 of the nation’s plastics processing firms — more than 40% — don’t produce high-quality end products. But since the market is still growing so quickly, it’s hard to control the flood of companies entering the market. And meaningful consolidation appears to be several years away.
“There are some good processors [in Brazil], but there’s a lot of work to do,” said Otavio Carvalho, director of the Maxiquim consulting firm in Porto Alegre. “It would be easy to increase overall production by 10%. They don’t realize how productive they could be with new machinery or even with the machinery they already have.”
Roriz agreed that productivity is an issue facing the Brazilian market. “We’re trying to increase productivity to compete with imports,” he said. “We can’t afford to lose focus.”
High resin prices also are a challenge for Brazil’s plastic processors such as Winning Pack, a 14-employee blow moulder in São Paulo. Commercial director Marco Souza cited Braskem’s domination of Brazil’s PE and PP markets as a reason Brazil has prices that are higher than those of imported resin.
In Braskem’s defense, consultant Carvalho said that the firm was content to proceed with a strong competitor in Quattor Petroquimica, but Quattor’s financial problems led it to be acquired by São Paulo-based Braskem last year. Overall, Braskem’s actions with Quattor and in consolidating the Brazilian resin market seem to be working out so far, he added.
“What Braskem has done [with Quattor] had to happen for the good of the industry,” Carvalho said. “All of the companies that went into Braskem were small and non-integrated, so that was a problem. Now they’re going to have dedicated plants for each grade.”
Winning Pack makes a variety of bottles for the chemical, agricultural and food markets. Sousa added that finding financing for growth isn’t difficult in the current Brazilian market, thanks mainly to BNDES, the country’s national development bank.
Tax crackdown
One factor that may increase Brazil’s rate of processor consolidation, according to Carvalho, is a crackdown on taxes which may cause numerous processors to lose their “informal” status. Currently, “informals” pay only 40-50% of taxes paid by fully recognized companies. Tighter enforcement is in the works, which could have a big impact, Carvalho said.
“More enforcement will take companies out as they’re required to pay taxes,” he explained. “They won’t be able to afford everything.”
“There’s no problem with finding growth,” plastics executive Jose Ricardo Roriz said at Brasilplast 2011, held 9-13 May in São Paulo. “That’s expected to continue during the next year. The problem is competitiveness, because our cost to produce is high.”
Moving forward, an abundance of small companies will be a key issue for the Brazilian industry to face. “We have close to 12,000 processors, but 90% of them have less than 100 employees,” Roriz added. “We haven’t seen consolidation yet, and a lot of these companies need to improve their overall business.”
Roriz has a valuable vantage point as president of both Abiplast — Brazil’s main plastics trade association — and Vitopel, which ranks as one of Brazil’s largest makers of biaxially oriented PP film, with annual sales of more than $400m (€272.9m). Vitopel is based in Argentina, but operates two of its three film plants in Brazil.
Roriz’s expectation of future growth was evident by the crowds at Brasilplast, which drew roughly 65,000 attendees and more than 1,300 exhibitors. At the event, Abiplast provided updated statistics that showed the number of processors operating in Brazil shot up almost 30% in the 2005-09 period and now totals almost 11,500.
Brazilian plastics processors rang up sales of $18bn (€12.3bn) in 2010, but the market still had a $1.5bn (€1bn) trade deficit in finished plastic products. The number of employees working for Brazilian plastics processors also rocketed up almost 40% during 2005-09 and now is near 350,000.
This trend is in line with recent Brazilian economic growth that’s averaged 5-6% in recent years and is expected to clock in at 4.5% in 2011. Brazil — the world’s fifth-largest country with more than 190 million residents —– now boasts a gross domestic product of $2.1 trillion (€1.4 trillion). That number accounts for almost half of the GDP of the entire Latin American region, well ahead of Mexico at 25%.
The plastics growth trend has been boosted by growth in Brazil’s middle class, which totaled 102 million in 2010 — more than 60% larger than that group was in 2005. This growing middle class is spending more on many plastic items, including durable goods. And there’s still room for growth, as Brazil’s per-capita consumption of polyethylene, polypropylene and PVC in 2008 was less than 51 pounds — far below the US average of 167 pounds and the European average of 150 pounds.
Brazil — and Latin America in general — also is benefiting from a solid political climate, according to Rina Quijada, owner of IntelliChem, a Houston-based consulting firm with a focus on Latin America. “Most of the region is politically stable, unlike in prior years,” she said.
Resin consumption
Growth also has led to greater resin consumption. Brazilian PE demand topped 5.5 billion pounds last year, with PP demand exceeding 3.3 billion pounds and polystyrene demand coming close to 900 million pounds. PE accounted for almost 40% of the nation’s overall resin demand, with PP having a 25% share, according to Abiplast. Brazil’s total resin consumption grew more than% in 2005-10, and consumption of PE alone is expected to average almost 7% growth between 2010 and 2015.
For plastic end markets in Brazil, food led the way in 2010 at almost 26%, with construction and non-food packaging each at just under 15%. Among processing methods, extrusion generated 57% of all processing activity, with injection molding a distant second at 19%.
Geographically, Brazilian plastics processing is heavily balanced toward the southeastern portion of the country, which includes São Paulo. Some 85% of Brazil’s processors are located there. The region also accounts for 80% of the country’s resin consumption, Abiplast said.
But the Brazilian plastics sector is not without its challenges. One market watcher estimated that as many as 5,000 of the nation’s plastics processing firms — more than 40% — don’t produce high-quality end products. But since the market is still growing so quickly, it’s hard to control the flood of companies entering the market. And meaningful consolidation appears to be several years away.
“There are some good processors [in Brazil], but there’s a lot of work to do,” said Otavio Carvalho, director of the Maxiquim consulting firm in Porto Alegre. “It would be easy to increase overall production by 10%. They don’t realize how productive they could be with new machinery or even with the machinery they already have.”
Roriz agreed that productivity is an issue facing the Brazilian market. “We’re trying to increase productivity to compete with imports,” he said. “We can’t afford to lose focus.”
High resin prices also are a challenge for Brazil’s plastic processors such as Winning Pack, a 14-employee blow moulder in São Paulo. Commercial director Marco Souza cited Braskem’s domination of Brazil’s PE and PP markets as a reason Brazil has prices that are higher than those of imported resin.
In Braskem’s defense, consultant Carvalho said that the firm was content to proceed with a strong competitor in Quattor Petroquimica, but Quattor’s financial problems led it to be acquired by São Paulo-based Braskem last year. Overall, Braskem’s actions with Quattor and in consolidating the Brazilian resin market seem to be working out so far, he added.
“What Braskem has done [with Quattor] had to happen for the good of the industry,” Carvalho said. “All of the companies that went into Braskem were small and non-integrated, so that was a problem. Now they’re going to have dedicated plants for each grade.”
Winning Pack makes a variety of bottles for the chemical, agricultural and food markets. Sousa added that finding financing for growth isn’t difficult in the current Brazilian market, thanks mainly to BNDES, the country’s national development bank.
Tax crackdown
One factor that may increase Brazil’s rate of processor consolidation, according to Carvalho, is a crackdown on taxes which may cause numerous processors to lose their “informal” status. Currently, “informals” pay only 40-50% of taxes paid by fully recognized companies. Tighter enforcement is in the works, which could have a big impact, Carvalho said.
“More enforcement will take companies out as they’re required to pay taxes,” he explained. “They won’t be able to afford everything.”
Brazil adds to gas reserves with new onshore find
RIO DE JANEIRO, June 28 (UPI) -- Brazil seems poised to add significant new quantities of natural gas to its expanding reserves of crude oil and gas on land and at great depths of its Atlantic Ocean coast and seabed.
News of the latest discovery of natural gas coincided with industry reports the government of President Dilma Rousseff would likely call an auction later this year to draw new investment into new exploration projects in the Sergipe Basin in the northeast of the country.
The International Energy Agency last month declared natural gas the leading fuel of the future and predicted the global natural gas industry could be entering a "golden age" if all conditions for its responsible exploitation were met by the operators.
Brazil has been on a winning streak, with oil and gas discovered up to 200 miles offshore, and the bonanza has transformed the country's development planning and also led to increased military spending to protect the newly found wealth.
Spanish oil and gas group Repsol YPF, meanwhile, said its Brazilian joint venture with China's Sinopec Group had also made a new discovery of good quality oil in ultra-deep waters off the Brazilian coast.
Repsol said in a statement the Gavea exploration well could be the most significant find made in the pre-salt area of the Campos Basin, already famous for large finds.
It said the consortium is analyzing the results of the well.
The state-controlled oil company Petrobras said its experts found the natural gas deposits in an onshore field close to an area where exploration licenses are due for auction later this year.
Officials said up to 174 exploration blocks could be put to auction. It was not immediately clear if the new gas discovery would influence Brazil's decision on the makeup and scale of the planned auctions.
Petrobras also did not say when it would declare the gas find commercially feasible.
The discovery at the Ilha Pequena block in the Sergipe Basin adds to a growing inventory of hydrocarbon finds at a time when Brazil says it wants to concentrate more on renewable energy.
Some of its renewable energy plans, however, have met with opposition from environmentalists. Brazil's plans for the giant Belo Monte Amazon dam complex met with international disapproval because of fears it would devastate ecology of a vast pristine region. The government says it needs the hydroelectric project to meet growing energy demands.
Brazil aims to more than double oil production by 2020 as offshore sub-salt oil wells begin coming on stream. It also has plans to expand its infrastructure for development of gas reserves.
News of the latest discovery of natural gas coincided with industry reports the government of President Dilma Rousseff would likely call an auction later this year to draw new investment into new exploration projects in the Sergipe Basin in the northeast of the country.
The International Energy Agency last month declared natural gas the leading fuel of the future and predicted the global natural gas industry could be entering a "golden age" if all conditions for its responsible exploitation were met by the operators.
Brazil has been on a winning streak, with oil and gas discovered up to 200 miles offshore, and the bonanza has transformed the country's development planning and also led to increased military spending to protect the newly found wealth.
Spanish oil and gas group Repsol YPF, meanwhile, said its Brazilian joint venture with China's Sinopec Group had also made a new discovery of good quality oil in ultra-deep waters off the Brazilian coast.
Repsol said in a statement the Gavea exploration well could be the most significant find made in the pre-salt area of the Campos Basin, already famous for large finds.
It said the consortium is analyzing the results of the well.
The state-controlled oil company Petrobras said its experts found the natural gas deposits in an onshore field close to an area where exploration licenses are due for auction later this year.
Officials said up to 174 exploration blocks could be put to auction. It was not immediately clear if the new gas discovery would influence Brazil's decision on the makeup and scale of the planned auctions.
Petrobras also did not say when it would declare the gas find commercially feasible.
The discovery at the Ilha Pequena block in the Sergipe Basin adds to a growing inventory of hydrocarbon finds at a time when Brazil says it wants to concentrate more on renewable energy.
Some of its renewable energy plans, however, have met with opposition from environmentalists. Brazil's plans for the giant Belo Monte Amazon dam complex met with international disapproval because of fears it would devastate ecology of a vast pristine region. The government says it needs the hydroelectric project to meet growing energy demands.
Brazil aims to more than double oil production by 2020 as offshore sub-salt oil wells begin coming on stream. It also has plans to expand its infrastructure for development of gas reserves.
Batista’s OSX Targets Petrobras Rig Orders After License Win
OSX Brasil SA (OSXB3), the oil services company controlled by Brazilian billionaire Eike Batista, is targeting billions of dollars in contracts from state-controlled Petroleo Brasileiro SA (PETR4) after winning a construction license.
The Rio de Janeiro-based company plans to submit bids to build some of the 21 rigs to be contracted this year by Sete Brasil, a joint venture between Petrobras and state-run pension funds, Chief Financial Officer Roberto Monteiro said yesterday in a telephone interview. OSX currently only has orders from OGX Petroleo & Gas Participacoes SA, also owned by Batista.
OSX received a license last week allowing it to build a shipyard in Rio de Janeiro state and will start clearing land in coming days, Monteiro said. Petrobras approved the construction of seven deep-water rigs in February for $4.64 billion, or $662 million each, as part of a program to add 28 rigs to its fleet.
“By getting the license now we are able to start construction in the next few days,” Monteiro said from Rio de Janeiro. “Now we are moving full steam ahead.”
OSX plans to finalize an $850 million project finance loan for its second offshore platform in one to two months, he said. OSX is seeking a better rate than the 4.25 percent over Libor that it paid for a similar 8 ½ year loan last year, he said.
Brazil’s oil and gas industry needs $400 billion in goods and services through 2020 for production and refining projects, according to the ONIP industry group.
$30 Billion
OSX expects to supply $30 billion worth of equipment to OGX, also based in Rio de Janeiro. OGX, which expects first production in October, plans 1.38 million barrels a day of output by 2019 and will receive its first platform from OGX in late August. OSX has about $4.8 billion in existing orders from OGX, Monteiro said.
OSX sees total demand for rigs and platforms in Brazil at about $200 billion over the next 15 years. Petrobras is doubling its deep-water fleet to tackle projects in the Atlantic Ocean, including the 6.5-billion-barrel Lula field, the largest discovery in the Americas in over three decades.
Brazilian laws require Petrobras, OGX and other oil companies to buy a majority of goods and services from Brazilian suppliers, benefitting local shipyards including OSX. Still, Brazil doesn’t have enough existing shipyards to supply equipment demand, according to Monteiro.
“It’s challenging to build a unit at international prices and meanwhile build a yard,” he said. “We have our own profitability standards that we would like to meet.”
The Rio de Janeiro-based company plans to submit bids to build some of the 21 rigs to be contracted this year by Sete Brasil, a joint venture between Petrobras and state-run pension funds, Chief Financial Officer Roberto Monteiro said yesterday in a telephone interview. OSX currently only has orders from OGX Petroleo & Gas Participacoes SA, also owned by Batista.
OSX received a license last week allowing it to build a shipyard in Rio de Janeiro state and will start clearing land in coming days, Monteiro said. Petrobras approved the construction of seven deep-water rigs in February for $4.64 billion, or $662 million each, as part of a program to add 28 rigs to its fleet.
“By getting the license now we are able to start construction in the next few days,” Monteiro said from Rio de Janeiro. “Now we are moving full steam ahead.”
OSX plans to finalize an $850 million project finance loan for its second offshore platform in one to two months, he said. OSX is seeking a better rate than the 4.25 percent over Libor that it paid for a similar 8 ½ year loan last year, he said.
Brazil’s oil and gas industry needs $400 billion in goods and services through 2020 for production and refining projects, according to the ONIP industry group.
$30 Billion
OSX expects to supply $30 billion worth of equipment to OGX, also based in Rio de Janeiro. OGX, which expects first production in October, plans 1.38 million barrels a day of output by 2019 and will receive its first platform from OGX in late August. OSX has about $4.8 billion in existing orders from OGX, Monteiro said.
OSX sees total demand for rigs and platforms in Brazil at about $200 billion over the next 15 years. Petrobras is doubling its deep-water fleet to tackle projects in the Atlantic Ocean, including the 6.5-billion-barrel Lula field, the largest discovery in the Americas in over three decades.
Brazilian laws require Petrobras, OGX and other oil companies to buy a majority of goods and services from Brazilian suppliers, benefitting local shipyards including OSX. Still, Brazil doesn’t have enough existing shipyards to supply equipment demand, according to Monteiro.
“It’s challenging to build a unit at international prices and meanwhile build a yard,” he said. “We have our own profitability standards that we would like to meet.”
Brazil takes on challenges of Pre-Salt
Pipelines International — June 2011
Brazil’s state-owned petroleum company Petrobras has awarded Saipem a contract to install two export pipelines in the country’s Pre-Salt region, located in the Atlantic Ocean.
Petrobras has awarded Saipem a contract for the installation of the Guara and Lula-Northeast gas export pipelines in the Santos Basin, approximately 260 km off the coasts of Rio de Janeiro and São Paulo, in water depths between 2,100 and 2,200 m.
The contract encompasses the transportation, installation and pre-commissioning of two export pipelines, as well as the engineering, procurement and construction of related subsea equipment.
The 54 km, 18 inch diameter first line will connect the Guara floating production storage and offloading (FPSO) vessel to a subsea gathering manifold in the Lula field. The FPSO is being constructed by Schahin/Modec consortium, will be able to produce 120,000 bbl/d of oil and 5 MMcm/d of gas, and is expected to go on-stream in late 2012.
The 22 km, 18 inch diameter second line will connect the Lula-Northeast FPSO to the same manifold in the Lula field.
The offshore activities for both the contracts will be performed mainly by the newly-built and highly specialised Saipem FDS 2 vessel, which will have the capacity to develop offshore fields by J-laying and lifting up to 1,000 t in dynamic position. Pipelaying on the project will be carried out in different periods between 2012 and 2013.
The Guara field is estimated to have between 1.1 and 2 Bbbl of recoverable oil.
The challenges of Pre-Salt petroleum production
The Pre-Salt region is located approximately 260 km off the coast of Brazil in the Atlantic Ocean. The region is named ‘Pre-Salt’ because the oil and gas resources are located in deep and ultra-deep waters, underneath an additional layer of salt that can be up to 2,000 m thick.
According to Petrobras, the biggest challenge in producing petroleum from these basins is the layer of salt, which, under high pressure and at high temperatures, behaves like a plastic, making it difficult to ensure the stability of the rock in the thick layer of salt.
Another challenge is transporting the oil and gas to shore once it has been produced.
Petrobras is investing in research for the development of pipeline infrastructure, which will enable more cost-effective production of Pre-Salt petroleum resources.
Petrobras has contracted a Japanese consortium to develop a flexible pipe design for offshore oil production in ultra-deep waters in the Pre-Salt cluster. The technical feasibility study is scheduled for completion in December 2014.
Brazil’s state-owned petroleum company Petrobras has awarded Saipem a contract to install two export pipelines in the country’s Pre-Salt region, located in the Atlantic Ocean.
Petrobras has awarded Saipem a contract for the installation of the Guara and Lula-Northeast gas export pipelines in the Santos Basin, approximately 260 km off the coasts of Rio de Janeiro and São Paulo, in water depths between 2,100 and 2,200 m.
The contract encompasses the transportation, installation and pre-commissioning of two export pipelines, as well as the engineering, procurement and construction of related subsea equipment.
The 54 km, 18 inch diameter first line will connect the Guara floating production storage and offloading (FPSO) vessel to a subsea gathering manifold in the Lula field. The FPSO is being constructed by Schahin/Modec consortium, will be able to produce 120,000 bbl/d of oil and 5 MMcm/d of gas, and is expected to go on-stream in late 2012.
The 22 km, 18 inch diameter second line will connect the Lula-Northeast FPSO to the same manifold in the Lula field.
The offshore activities for both the contracts will be performed mainly by the newly-built and highly specialised Saipem FDS 2 vessel, which will have the capacity to develop offshore fields by J-laying and lifting up to 1,000 t in dynamic position. Pipelaying on the project will be carried out in different periods between 2012 and 2013.
The Guara field is estimated to have between 1.1 and 2 Bbbl of recoverable oil.
The challenges of Pre-Salt petroleum production
The Pre-Salt region is located approximately 260 km off the coast of Brazil in the Atlantic Ocean. The region is named ‘Pre-Salt’ because the oil and gas resources are located in deep and ultra-deep waters, underneath an additional layer of salt that can be up to 2,000 m thick.
According to Petrobras, the biggest challenge in producing petroleum from these basins is the layer of salt, which, under high pressure and at high temperatures, behaves like a plastic, making it difficult to ensure the stability of the rock in the thick layer of salt.
Another challenge is transporting the oil and gas to shore once it has been produced.
Petrobras is investing in research for the development of pipeline infrastructure, which will enable more cost-effective production of Pre-Salt petroleum resources.
Petrobras has contracted a Japanese consortium to develop a flexible pipe design for offshore oil production in ultra-deep waters in the Pre-Salt cluster. The technical feasibility study is scheduled for completion in December 2014.
Aker & Other Projects In Brazil
Aker has won two contracts, together worth £13m, from CQG Oil and Gas Contractors and CCI Oil and Gas Contractors, for the supply of Pusnes offloading systems to two FPSOs in Brazil.The offloading systems will be installed on the two FPSOs P-58 and P-62, which are being converted and built for Petrobras
Oxford Catalysts Group’s microchannel reactor technology is now set to be deployed in a 50 barrels/day BTL plant planned for Brazil. The plant, a JV between Portuguese company SGC Energia and an un-named partner. is expected to begin operating early in 2012. (
Metso is to supply all main technology for the 1,500ktpa greenfield pulp mill of Suzano Papel e Celulose SA, to be built in the state of Maranhão, Brazil. Start-up is due H1/13. Metso said a typical value of an order of this size and scope is Euro800-900m, covering all suppliers. Metso’s scope of supply covers wood handling, cooking plant and fibreline, pulp drying and baling, evaporation, power boiler, recovery boiler, causticizing and lime kiln, including an integrated automation system for all process areas.
Metso and Petrobras have signed a contract for the supply of spare parts and maintenance services for Metso’s valves, actuators and positioners for 11 refineries in Brazil. The contract, which includes intelligent tools for preventive and predictive maintenance planning, follows a two-year Metso pilot at a Petrobras refinery in São Paulo.
Oxford Catalysts Group’s microchannel reactor technology is now set to be deployed in a 50 barrels/day BTL plant planned for Brazil. The plant, a JV between Portuguese company SGC Energia and an un-named partner. is expected to begin operating early in 2012. (
Metso is to supply all main technology for the 1,500ktpa greenfield pulp mill of Suzano Papel e Celulose SA, to be built in the state of Maranhão, Brazil. Start-up is due H1/13. Metso said a typical value of an order of this size and scope is Euro800-900m, covering all suppliers. Metso’s scope of supply covers wood handling, cooking plant and fibreline, pulp drying and baling, evaporation, power boiler, recovery boiler, causticizing and lime kiln, including an integrated automation system for all process areas.
Metso and Petrobras have signed a contract for the supply of spare parts and maintenance services for Metso’s valves, actuators and positioners for 11 refineries in Brazil. The contract, which includes intelligent tools for preventive and predictive maintenance planning, follows a two-year Metso pilot at a Petrobras refinery in São Paulo.
Keppel Secures Shipbuilding Contracts from Brazilian Operators
Keppel Singmarine Brasil (KSM Brasil), Keppel Offshore & Marine Ltd (Keppel O&M)'s new 7.6-ha shipbuilding facility in the state of Santa Catarina, has secured two newbuild contracts worth about S$140 million from fleet operators in Brazil.
The first contract entails building a series of six 45-tonne bollard pull twin-screw Azimuth Stern Drive (ASD) harbour tugboats, for REBRAS - Rebocadores do Brasil S.A. (SMIT Rebras).
In the second contract, the yard will construct a large-sized 4500dwt Platform Supply Vessel (PSV) based on its proprietary MTD 9045P-DE design for Keppel O&M's Brazilian ship-owning arm, Guanabara Navegacao.This is the first vessel constructed under the business model to build Offshore Support Vessels in anticipation of demand in Brazil, and such vessels will be offered for bare-boat charter or sale upon completion.
KSM Brasil specialises in constructing Offshore Support Vessels such as Anchor Handling Tug Supply (AHTS) vessels, PSVs, Oil Recovery Support Vessels and harbour/terminal tugboats.
The new facility in Brazil is also able to fabricate offshore steel structures and support major projects undertaken by Keppel's BrasFELS yard in Angra dos Reis.
Mr. Hoe Eng Hock, Executive Director of KSM Brasil shared, "Petrobras will need over 100 Brazilian-built offshore support vessels by 2020, to facilitate the exploration and development of the Santos Basin's deep water pre-salt fields. We see a growing market for purpose-built support vessels that can operate safely and efficiently offshore Brazil.
"Keppel Singmarine has been building harbour tugs for the global fleet of Smit in Singapore and China Nantong for the past 20 years. With the award of six harbour tugs contract, the relationship and partnership between Smit and Keppel has deepened and expanded to the new frontier in Brazil."
KSM Brasil's scope for the six tugboats includes detailed design and engineering work and the purchase of all equipment. The first tugboat will be delivered in 4Q2012, followed by the remaining five at three-month intervals. These Robert Allan-designed tugboats will be deployed by SMIT Rebras to work at key ports across Brazil.
Meanwhile, GNL's 4500 dwt PSV is slated for completion in 2013. The PSV is custom-designed by Keppel's Marine Technology Development unit to meet the stringent requirements of Petrobras. The unique arrangement of the PSV's internal tanks and systems enable it to transport a wide combination of oil-based and water-based bulk cargoes for offshore exploration and production.
This ABS Classed PSV spans 94.2m long and 19.8m wide. It features a large deadweight capacity in excess of 4,500 tonne and a deck space of 1000sqm which can accommodate 26 crew members. Equipped with a diesel-electric propulsion system and dynamic positioning (DP) 2 capability, this PSV is well suited to operate in different offshore conditions.
The above contracts are not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the current financial year.
The first contract entails building a series of six 45-tonne bollard pull twin-screw Azimuth Stern Drive (ASD) harbour tugboats, for REBRAS - Rebocadores do Brasil S.A. (SMIT Rebras).
In the second contract, the yard will construct a large-sized 4500dwt Platform Supply Vessel (PSV) based on its proprietary MTD 9045P-DE design for Keppel O&M's Brazilian ship-owning arm, Guanabara Navegacao.This is the first vessel constructed under the business model to build Offshore Support Vessels in anticipation of demand in Brazil, and such vessels will be offered for bare-boat charter or sale upon completion.
KSM Brasil specialises in constructing Offshore Support Vessels such as Anchor Handling Tug Supply (AHTS) vessels, PSVs, Oil Recovery Support Vessels and harbour/terminal tugboats.
The new facility in Brazil is also able to fabricate offshore steel structures and support major projects undertaken by Keppel's BrasFELS yard in Angra dos Reis.
Mr. Hoe Eng Hock, Executive Director of KSM Brasil shared, "Petrobras will need over 100 Brazilian-built offshore support vessels by 2020, to facilitate the exploration and development of the Santos Basin's deep water pre-salt fields. We see a growing market for purpose-built support vessels that can operate safely and efficiently offshore Brazil.
"Keppel Singmarine has been building harbour tugs for the global fleet of Smit in Singapore and China Nantong for the past 20 years. With the award of six harbour tugs contract, the relationship and partnership between Smit and Keppel has deepened and expanded to the new frontier in Brazil."
KSM Brasil's scope for the six tugboats includes detailed design and engineering work and the purchase of all equipment. The first tugboat will be delivered in 4Q2012, followed by the remaining five at three-month intervals. These Robert Allan-designed tugboats will be deployed by SMIT Rebras to work at key ports across Brazil.
Meanwhile, GNL's 4500 dwt PSV is slated for completion in 2013. The PSV is custom-designed by Keppel's Marine Technology Development unit to meet the stringent requirements of Petrobras. The unique arrangement of the PSV's internal tanks and systems enable it to transport a wide combination of oil-based and water-based bulk cargoes for offshore exploration and production.
This ABS Classed PSV spans 94.2m long and 19.8m wide. It features a large deadweight capacity in excess of 4,500 tonne and a deck space of 1000sqm which can accommodate 26 crew members. Equipped with a diesel-electric propulsion system and dynamic positioning (DP) 2 capability, this PSV is well suited to operate in different offshore conditions.
The above contracts are not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the current financial year.
2011-06-14
Brazil’s economic ties with Africa continue to flourish
Former President Lula da Silva is often attributed with developing the increased economic relationship between Brazil and Africa – forming what is now known as the ‘south-south’ cooperation after visiting 27 of the 53 countries in 2003. It was this extensive trip that initiated the creation and expansion of a number of Brazilian consulates as well as other ties that were viewed as important.
According to the Financial Times, Brazilian commerce levels have reached US$25 billion in 2010 and there are now 500 Brazilian companies in operation in the continent (compared to 13 in 1995), many of whom see the region as not only an important export/investment destination but also as ways to use knowledge and expertise in fields such as hydro electricity, energy production and construction.
From a commercial perspective, the country is finding itself in increased competition with other nations with a strong desire to invest and boost trade links – particularly from China (that has double the level of commerce across the continent compared to Brazil); India; North America and Europe (although the latter two have slowed down their pace as a result of the global economic crisis).
Brazil’s leaders have been keen to gear up their activity to not fall behind with support of the government such as the BNDES $1.75 billion credit line for infrastructural construction firms (used by both Odebrecht and Camargo Corrêa).
The Bank of Brazil, Bradesco and the Espírito Santo bank have also stated their cooperative intention to actively search for opportunities, particularly in Mozambique, Angola and Cape Verde.
In February 2011, Lula revisited the continent to attend the World Social Forum in Senegal – largely in his post-presidency role to boost diplomatic relations –and heavily criticised the current model of international finance management, stating: “We must change the pages of the models from the outside”.
He said: “Brazil has no intention of dictating practices to anyone and always wants to learn with dignity from the wisdom of our brother countries.” Indeed, the Brazilian government has been commended on the co-development of programmes tied to the ministry of Social Development such as the auxiliary initiatives to the Bolsa Família (Family Grant) and the Zero Fome (Zero Hunger).
Such projects serve to resolve some of the core issues facing the African continent including food supply, HIV cure / prevention and other social / environmental issues.
A significant proportion of such investment has been witnessed in Portuguese speaking nations: Guinea Bissau, Mozambique and Angola.
But according to the United Nations, there are 300 Brazilian initiatives spread across 37 African nations (in 2002 there were 21 projects in 7 countries). One notable example is a project driven by the Oswaldo Cruz Foundation (Fiocruz) for the production of HIV treatment in Mozambique.
Embrapa organization is involved in the development of core infrastructural endeavours focused on improving capacitation, technical skills and agricultural security in Mali, Benin, Chad and Burkina Faso.
According José Geraldo Di Stefano, an engineer from the organization, “with a strong Africa, Brazil also stays strong because we can fight against the World Trade Organisation with regards to the subsidies being given to rich countries for the production of cotton.”
Di Stefano further states that the programme’s complementary intention is to develop the provision of food production essentially in rural areas where crop supplies are low.
Embrapa is also bringing its wide knowledge of rice production to Senegal which is expected to be used as a model throughout the continent as well as a partnership with the Japanese government entitled ProSavana that will work on developing the vast grasslands in Mozambique.
Brazil’s Senai organisation has also become increasingly involved throughout the continent – including a $20 million employment training programme, a police training school and educational establishments in Guinea Bissau which will be used as models in other African countries.
For the future, the Dilma Rousseff government looks firmly set to continue the momentum created in recent years.
Brazil’s ministry of External Relations has also created a programme which gives the Brazilian Cooperation Agency more autonomy whilst removing some of the former restrictions on its effective functionality.
In April 2011, the four BRICs (Brazil, Russia, India and China) in addition to South Africa announced the creation of a working group that will ease trade relations and create a cross lending system for mutual investment agreements to be made in local currencies.
However, amongst all the excitement, many questions remain with regards to the practically of expansion.
If Brazil chooses to focus on profitability – there is a risk that it will be viewed as egotistical.
If cooperation is the route to be taken, Brazil has to make an assessment whether its development interests will be fulfilled. It is difficult to say what will happen but it is certain that these decisions will have to be made.
Issues have also arisen with regards to transparency of funds being transferred between countries with the recent investigation being initiated into the disappearance of $300,000 which was passed through the Brazilian embassy in Harare, Zimbabwe.
According to the Financial Times, Brazilian commerce levels have reached US$25 billion in 2010 and there are now 500 Brazilian companies in operation in the continent (compared to 13 in 1995), many of whom see the region as not only an important export/investment destination but also as ways to use knowledge and expertise in fields such as hydro electricity, energy production and construction.
From a commercial perspective, the country is finding itself in increased competition with other nations with a strong desire to invest and boost trade links – particularly from China (that has double the level of commerce across the continent compared to Brazil); India; North America and Europe (although the latter two have slowed down their pace as a result of the global economic crisis).
Brazil’s leaders have been keen to gear up their activity to not fall behind with support of the government such as the BNDES $1.75 billion credit line for infrastructural construction firms (used by both Odebrecht and Camargo Corrêa).
The Bank of Brazil, Bradesco and the Espírito Santo bank have also stated their cooperative intention to actively search for opportunities, particularly in Mozambique, Angola and Cape Verde.
In February 2011, Lula revisited the continent to attend the World Social Forum in Senegal – largely in his post-presidency role to boost diplomatic relations –and heavily criticised the current model of international finance management, stating: “We must change the pages of the models from the outside”.
He said: “Brazil has no intention of dictating practices to anyone and always wants to learn with dignity from the wisdom of our brother countries.” Indeed, the Brazilian government has been commended on the co-development of programmes tied to the ministry of Social Development such as the auxiliary initiatives to the Bolsa Família (Family Grant) and the Zero Fome (Zero Hunger).
Such projects serve to resolve some of the core issues facing the African continent including food supply, HIV cure / prevention and other social / environmental issues.
A significant proportion of such investment has been witnessed in Portuguese speaking nations: Guinea Bissau, Mozambique and Angola.
But according to the United Nations, there are 300 Brazilian initiatives spread across 37 African nations (in 2002 there were 21 projects in 7 countries). One notable example is a project driven by the Oswaldo Cruz Foundation (Fiocruz) for the production of HIV treatment in Mozambique.
Embrapa organization is involved in the development of core infrastructural endeavours focused on improving capacitation, technical skills and agricultural security in Mali, Benin, Chad and Burkina Faso.
According José Geraldo Di Stefano, an engineer from the organization, “with a strong Africa, Brazil also stays strong because we can fight against the World Trade Organisation with regards to the subsidies being given to rich countries for the production of cotton.”
Di Stefano further states that the programme’s complementary intention is to develop the provision of food production essentially in rural areas where crop supplies are low.
Embrapa is also bringing its wide knowledge of rice production to Senegal which is expected to be used as a model throughout the continent as well as a partnership with the Japanese government entitled ProSavana that will work on developing the vast grasslands in Mozambique.
Brazil’s Senai organisation has also become increasingly involved throughout the continent – including a $20 million employment training programme, a police training school and educational establishments in Guinea Bissau which will be used as models in other African countries.
For the future, the Dilma Rousseff government looks firmly set to continue the momentum created in recent years.
Brazil’s ministry of External Relations has also created a programme which gives the Brazilian Cooperation Agency more autonomy whilst removing some of the former restrictions on its effective functionality.
In April 2011, the four BRICs (Brazil, Russia, India and China) in addition to South Africa announced the creation of a working group that will ease trade relations and create a cross lending system for mutual investment agreements to be made in local currencies.
However, amongst all the excitement, many questions remain with regards to the practically of expansion.
If Brazil chooses to focus on profitability – there is a risk that it will be viewed as egotistical.
If cooperation is the route to be taken, Brazil has to make an assessment whether its development interests will be fulfilled. It is difficult to say what will happen but it is certain that these decisions will have to be made.
Issues have also arisen with regards to transparency of funds being transferred between countries with the recent investigation being initiated into the disappearance of $300,000 which was passed through the Brazilian embassy in Harare, Zimbabwe.
Brasil Offshore 2011 starts tomorrow
It starts tomorrow (14) in Macaé, Brazil Offshore, the third largest world fair of the offshore industry. The event will run until Friday (17), which are expected to more than 50,000 visitors to the fair, which attracts 670 exhibitors.
The event is organized and promoted by Reed Exhibitions Alcantara Machado, by the city of Macae, the Brazilian Institute of Oil, Gas and Biofuels (IBP) and the Society of Petroleum Engineers (SPE).
Besides the booths, also happens to Business Roundtable, organized by and for ONIP SEBRAE, and sponsored by the Caixa Economica Federal (CEF), which will provide its products and services for the event and will feature the participation of 19 anchor companies - large companies Brazilian oil sector, which will participate in approximately 390 meetings with 78 vendors.
They are: Aker Solutions, Chevron, El Paso, Global Iesa Oil and Gas, Petrobras - Campos Basin, Q & B Petroleum, Repsol, Saipem, SBM Offshore, Shell, OGS - Oil & Gas, Superpesa Technip. Transocean, Usiminas, UTC, V & M and Wellstream. Besides them, Petrobras and Petronect offer the possibility to register on their registration.
According to the superintendent of ONIP, Bruno Musso, "the round is a great opportunity for small and medium-size and focus is precisely this interaction with the small and medium enterprises, whose products are not directly demanded by large enterprises, but integrating the supply chain industry. "
More information and complete program: www.brasiloffshore.com
The event is organized and promoted by Reed Exhibitions Alcantara Machado, by the city of Macae, the Brazilian Institute of Oil, Gas and Biofuels (IBP) and the Society of Petroleum Engineers (SPE).
Besides the booths, also happens to Business Roundtable, organized by and for ONIP SEBRAE, and sponsored by the Caixa Economica Federal (CEF), which will provide its products and services for the event and will feature the participation of 19 anchor companies - large companies Brazilian oil sector, which will participate in approximately 390 meetings with 78 vendors.
They are: Aker Solutions, Chevron, El Paso, Global Iesa Oil and Gas, Petrobras - Campos Basin, Q & B Petroleum, Repsol, Saipem, SBM Offshore, Shell, OGS - Oil & Gas, Superpesa Technip. Transocean, Usiminas, UTC, V & M and Wellstream. Besides them, Petrobras and Petronect offer the possibility to register on their registration.
According to the superintendent of ONIP, Bruno Musso, "the round is a great opportunity for small and medium-size and focus is precisely this interaction with the small and medium enterprises, whose products are not directly demanded by large enterprises, but integrating the supply chain industry. "
More information and complete program: www.brasiloffshore.com
2011-06-04
Latin America: The Quest for Talent
PROMOTING TALENT Brazilian mining giant Vale do Rio Doce has increasingly promoted people in their mid-30s to direct large projects. (Photo: Vale)
BETTER FUTURE Countries like Brazil, represented by this group of young people from Porto Alegre, are seeing a reverse brain drain. (Photo: EugenioHansen/OFS)
In an increasingly competitive global environment, major firms know that talent recruitment and cultivation is an urgent challenge. Latin America is no exception. For example, Brazilian multinational firm Vale do Rio Doce has increasingly promoted people in their mid-30s to direct large projects, and it is ramping up its in-house training so those employees can qualify for the higher positions sooner. Thus, it is spending around $100 million with its global training programs in 2011, around 30 percent to 50 percent more than last year.
Recognizably, talent recruitment is necessary for all large firms, but for multilatinas it is indispensable, since they are competing not just in their home markets, where they may still benefit from tariff and non-tariff barriers and a host of incentives reserved for local firms, including concessional financing, but in the global marketplace. The maturation of Latin American firms, whether focused largely on internal markets, foreign markets, or both, has been significant. These firms’ abilities to secure financing and access state-of-the-art technology and supply chain management systems have increased significantly. It is the “people” factor that remains the most challenging. Just look at mergers and acquisitions (M&A), nearly $190 billion in Latin America in 2010, more than double the amount of the previous year. Over 70 percent of M&As fail to meet their objectives, or fail outright. The exclusion of HR from the process right from the beginning is a principal cause of failure. However, as noted by Daniel Nadborny, head of Mercer’s M&A practice for Latin America, significant efforts are being made to change this. His colleague Paule Desaulniers, senior partner in their Mexico office, emphasizes that share values invariably decline when the acquirer purchases a company; therefore, human resources—talent—are critically important to removing uncertainty, boosting productivity and increasing overall performance to recuperate stock value.
The good news is that, companies are finally recognizing the importance that their HR departments can play in talent selection and recruitment and engaging senior HR managers more closely with line managers in the process—all linked to the firm’s strategies and directions. Consequently, the prime challenges for HR managers are to attract talent by making compelling promises centered on the company’s brand, opportunity, and purpose, and to retain talent by keeping promises, ensuring a merit-centered reward system, and accelerating professional development.
This difficult task of recruiting talented individuals in Latin America has been exacerbated by a massive brain-drain in some Latin American countries. When it comes to brain-drain, Venezuela is the champion. According to a recent study by the Latin American Economic System, Venezuela’s outflow of highly skilled workers over 25 years of age rose 216 percent from 1990 to 2007. As a result, it is estimated that 9,000 Venezuelan scientists now live in the US, while only 6,000 live in Venezuela. Venezuela, however, is not alone in this exodus of talent, other Bolivarian countries such as Bolivia and Ecuador are following the same footsteps. For example, one in three Bolivians under 30 have plans to emigrate.
Fortunately, not all is doom and gloom in Latin America and some Latin American countries are experiencing “reverse” brain-drain. Countries such as Chile, Brazil, and Peru are implementing policies to entice talented and skilled individuals to come back to work in their home country. For example, Start-Up Chile is working closely with the government to reverse brain-drain by continuing to develop a globally-recognized technology center and by planning to create over 800,000 technology jobs by 2014. Consequently, Chile has seen an increased presence of both technology start-ups and active multinationals such as GE, Oracle, and Yahoo, which are recruiting and building the job market. Similarly, Brazil’s job market is booming as a result of a thriving economy and an appreciation of its local currency, which makes compensation much more attractive when converted to dollars or Euros. Thus, although companies operating in Brazil may have to pay more to recruit and hire new talent, the available pool of talented individuals willing to relocate to Brazil has increased greatly. Companies such as Vale do Rio Doce and Citigroup have stepped-up their recruiting process by recruiting from top MBA and other university programs in the US and around the world.
The quest for talent—its identification, attraction, recruitment, retention and promotion--is one of the most daunting challenges of our time. How firms manage the process will surely impact their bottom line—both now and in the future.
BETTER FUTURE Countries like Brazil, represented by this group of young people from Porto Alegre, are seeing a reverse brain drain. (Photo: EugenioHansen/OFS)
In an increasingly competitive global environment, major firms know that talent recruitment and cultivation is an urgent challenge. Latin America is no exception. For example, Brazilian multinational firm Vale do Rio Doce has increasingly promoted people in their mid-30s to direct large projects, and it is ramping up its in-house training so those employees can qualify for the higher positions sooner. Thus, it is spending around $100 million with its global training programs in 2011, around 30 percent to 50 percent more than last year.
Recognizably, talent recruitment is necessary for all large firms, but for multilatinas it is indispensable, since they are competing not just in their home markets, where they may still benefit from tariff and non-tariff barriers and a host of incentives reserved for local firms, including concessional financing, but in the global marketplace. The maturation of Latin American firms, whether focused largely on internal markets, foreign markets, or both, has been significant. These firms’ abilities to secure financing and access state-of-the-art technology and supply chain management systems have increased significantly. It is the “people” factor that remains the most challenging. Just look at mergers and acquisitions (M&A), nearly $190 billion in Latin America in 2010, more than double the amount of the previous year. Over 70 percent of M&As fail to meet their objectives, or fail outright. The exclusion of HR from the process right from the beginning is a principal cause of failure. However, as noted by Daniel Nadborny, head of Mercer’s M&A practice for Latin America, significant efforts are being made to change this. His colleague Paule Desaulniers, senior partner in their Mexico office, emphasizes that share values invariably decline when the acquirer purchases a company; therefore, human resources—talent—are critically important to removing uncertainty, boosting productivity and increasing overall performance to recuperate stock value.
The good news is that, companies are finally recognizing the importance that their HR departments can play in talent selection and recruitment and engaging senior HR managers more closely with line managers in the process—all linked to the firm’s strategies and directions. Consequently, the prime challenges for HR managers are to attract talent by making compelling promises centered on the company’s brand, opportunity, and purpose, and to retain talent by keeping promises, ensuring a merit-centered reward system, and accelerating professional development.
This difficult task of recruiting talented individuals in Latin America has been exacerbated by a massive brain-drain in some Latin American countries. When it comes to brain-drain, Venezuela is the champion. According to a recent study by the Latin American Economic System, Venezuela’s outflow of highly skilled workers over 25 years of age rose 216 percent from 1990 to 2007. As a result, it is estimated that 9,000 Venezuelan scientists now live in the US, while only 6,000 live in Venezuela. Venezuela, however, is not alone in this exodus of talent, other Bolivarian countries such as Bolivia and Ecuador are following the same footsteps. For example, one in three Bolivians under 30 have plans to emigrate.
Fortunately, not all is doom and gloom in Latin America and some Latin American countries are experiencing “reverse” brain-drain. Countries such as Chile, Brazil, and Peru are implementing policies to entice talented and skilled individuals to come back to work in their home country. For example, Start-Up Chile is working closely with the government to reverse brain-drain by continuing to develop a globally-recognized technology center and by planning to create over 800,000 technology jobs by 2014. Consequently, Chile has seen an increased presence of both technology start-ups and active multinationals such as GE, Oracle, and Yahoo, which are recruiting and building the job market. Similarly, Brazil’s job market is booming as a result of a thriving economy and an appreciation of its local currency, which makes compensation much more attractive when converted to dollars or Euros. Thus, although companies operating in Brazil may have to pay more to recruit and hire new talent, the available pool of talented individuals willing to relocate to Brazil has increased greatly. Companies such as Vale do Rio Doce and Citigroup have stepped-up their recruiting process by recruiting from top MBA and other university programs in the US and around the world.
The quest for talent—its identification, attraction, recruitment, retention and promotion--is one of the most daunting challenges of our time. How firms manage the process will surely impact their bottom line—both now and in the future.
Petrobras, Ecopetrol Boost 2011 Peruvian Oil Exploration
Petroleo Brasileiro SA (PETR4) and Colombia’s Ecopetrol SA (ECOPETL) are among energy companies aiming to increase Peru investments by a combined 50 percent to $1.54 billion this year, said the president of the state oil contracting agency.
Brazil’s state-controlled oil company known as Petrobras, Ecopetrol, Argentina’s Pluspetrol SA and Calgary-based Gran Tierra Energy Inc. (GTE) will drill a dozen exploration wells in the Amazon jungle and off Peru’s coast this year, twice the average annual figure, Perupetro’s Daniel Saba said June 1 in an interview in Lima. Peru elects a new president in two days.
“With more companies entering Peru, more wells are being drilled,” said Saba, who awarded 14 exploration contracts in October. “Oil companies are in it for the long term and none of them have said they’re leaving.”
The Andean country’s stocks, bonds and currency slumped today on investor fears that former army renegade Ollanta Humala, who pledged to rewrite oil and mining contracts and halt gas exports if elected, may win the June 5 vote. Humala was statistically tied with Keiko Fujimori in the latest poll. Fujimori has promised to try to attract foreign investment.
Peru, which tripled natural gas output to a record 1.03 billion cubic feet a day in April from a year earlier, has lined up $10 billion in energy projects through 2016 in a bid to double crude output and gas reserves, according to the Energy Ministry. Companies including Canada’s Talisman Energy Inc. (TLM) and Spain’s Repsol YPF SA (REP), which have signed a record 86 contracts to date, invested $987 million last year.
Gas Investment
The outcome of the elections won’t slow a $2 billion expansion of the Camisea gas fields, said Daniel Guerra, spokesman of Buenos Aires-based operator Pluspetrol. Pluspetrol plans to quadruple gas shipments to petrochemical and power plant projects by the end of 2012.
“We believe we’ll be able to work with whoever is elected,” Guerra said in a May 18 interview during a visit to the fields. “It’s in the next government’s interest to bring in more investment in the gas industry.”
Transportadora de Gas del Peru, a seven-company group whose partners include Pluspetrol, is scheduled to finish an $850 million expansion of its gas conduit next year, he said.
Other energy investments in Peru include Perenco SA’s $2 billion oil and pipeline projects, CF Industries Holdings Inc. (CF)’s $2 billion petrochemicals complex and Petroperu’s $1.3 billion Talara refinery expansion.
Crude oil for July delivery fell 18 cents to settle at $100.22 a barrel on the New York Mercantile Exchange. Futures have doubled over the past two years.
Brazil’s state-controlled oil company known as Petrobras, Ecopetrol, Argentina’s Pluspetrol SA and Calgary-based Gran Tierra Energy Inc. (GTE) will drill a dozen exploration wells in the Amazon jungle and off Peru’s coast this year, twice the average annual figure, Perupetro’s Daniel Saba said June 1 in an interview in Lima. Peru elects a new president in two days.
“With more companies entering Peru, more wells are being drilled,” said Saba, who awarded 14 exploration contracts in October. “Oil companies are in it for the long term and none of them have said they’re leaving.”
The Andean country’s stocks, bonds and currency slumped today on investor fears that former army renegade Ollanta Humala, who pledged to rewrite oil and mining contracts and halt gas exports if elected, may win the June 5 vote. Humala was statistically tied with Keiko Fujimori in the latest poll. Fujimori has promised to try to attract foreign investment.
Peru, which tripled natural gas output to a record 1.03 billion cubic feet a day in April from a year earlier, has lined up $10 billion in energy projects through 2016 in a bid to double crude output and gas reserves, according to the Energy Ministry. Companies including Canada’s Talisman Energy Inc. (TLM) and Spain’s Repsol YPF SA (REP), which have signed a record 86 contracts to date, invested $987 million last year.
Gas Investment
The outcome of the elections won’t slow a $2 billion expansion of the Camisea gas fields, said Daniel Guerra, spokesman of Buenos Aires-based operator Pluspetrol. Pluspetrol plans to quadruple gas shipments to petrochemical and power plant projects by the end of 2012.
“We believe we’ll be able to work with whoever is elected,” Guerra said in a May 18 interview during a visit to the fields. “It’s in the next government’s interest to bring in more investment in the gas industry.”
Transportadora de Gas del Peru, a seven-company group whose partners include Pluspetrol, is scheduled to finish an $850 million expansion of its gas conduit next year, he said.
Other energy investments in Peru include Perenco SA’s $2 billion oil and pipeline projects, CF Industries Holdings Inc. (CF)’s $2 billion petrochemicals complex and Petroperu’s $1.3 billion Talara refinery expansion.
Crude oil for July delivery fell 18 cents to settle at $100.22 a barrel on the New York Mercantile Exchange. Futures have doubled over the past two years.
Petrobras christens Marlim Sul P-56 production unit
HOUSTON, June 3 -- Petroleo Brasileiro SA (Petrobras) christened on June 3 the P-56 semisubmersible production unit at the BrasFELS Shipyard, in Angra dos Reis in Brazil.
The $1.5 billion unit will produce oil and associated gas from Marlim Sul Module 3 in the Campos basin, about 120 km off Brazil. Petrobras expects production from the field to start in August after P-56 undergoes testing and final adjustments.
Petrobras signed the construction agreement for the unit with Keppel FELS and Technip in October 2007
P-56 will be anchored in 1,670 m of water and be connected to 10 producing and 11 injection wells. The unit can accommodate 70 risers. The designed production capacity of the unit is 100 million bo/d and 6 million cu m/day of gas.
The hull of P-56 was built entirely in Brazil and the topsides have a 72.9% Brazilian content. P-51, with an identical design to P-56, was the first unit built entirely in Brazil.
P-56 weighs a total 54,685 tons and is 125 m long, 110 m wide, and 137 m high. The unit will accommodate 200 people.
P-56 has a modular construction that includes the deck box and hull modules. Keppel FELS assembled the four process and utilities modules at the BrasFELS shipyard.
The process modules include:
• Two power generation modules (100 Mw) built by Rolls Royce in association with UTC Engenharia at UTC's site in Niteroi, Brazil.
• Two compression modules built by Nouvo Pignone (GE) at the Porto Novo Rio site in Rio de Janeiro.
The deck box was also built at BrasFELS, where the modules were integrated. Mating of the topsides and hull occurred in October 2010.
A pipeline will transport produced oil from P-56 about 20 km to the P-38 floating production, storage, and offloading vessel and another line will take the gas 15 km to the P-51 semisubmersible production unit.
The $1.5 billion unit will produce oil and associated gas from Marlim Sul Module 3 in the Campos basin, about 120 km off Brazil. Petrobras expects production from the field to start in August after P-56 undergoes testing and final adjustments.
Petrobras signed the construction agreement for the unit with Keppel FELS and Technip in October 2007
P-56 will be anchored in 1,670 m of water and be connected to 10 producing and 11 injection wells. The unit can accommodate 70 risers. The designed production capacity of the unit is 100 million bo/d and 6 million cu m/day of gas.
The hull of P-56 was built entirely in Brazil and the topsides have a 72.9% Brazilian content. P-51, with an identical design to P-56, was the first unit built entirely in Brazil.
P-56 weighs a total 54,685 tons and is 125 m long, 110 m wide, and 137 m high. The unit will accommodate 200 people.
P-56 has a modular construction that includes the deck box and hull modules. Keppel FELS assembled the four process and utilities modules at the BrasFELS shipyard.
The process modules include:
• Two power generation modules (100 Mw) built by Rolls Royce in association with UTC Engenharia at UTC's site in Niteroi, Brazil.
• Two compression modules built by Nouvo Pignone (GE) at the Porto Novo Rio site in Rio de Janeiro.
The deck box was also built at BrasFELS, where the modules were integrated. Mating of the topsides and hull occurred in October 2010.
A pipeline will transport produced oil from P-56 about 20 km to the P-38 floating production, storage, and offloading vessel and another line will take the gas 15 km to the P-51 semisubmersible production unit.
2011-05-26
Brazil oil start-ups shine as Petrobras worries mount
Wed, May 25 2011
By Brian Ellsworth
RIO DE JANEIRO (Reuters) - Concerns of mounting political interference at Brazil's state-run oil company Petrobras are spurring interest in a crop of start-ups seeking to tap the South American nation's sizable reserves.
Worried that state meddling will push Petrobras toward less profitable activities, investors are eyeing alternatives such as OGX Petroleo (OGXP3.SA: Quote, Profile, Research, Stock Buzz), which has made extensive shallow water discoveries, or start-ups HRT Participacoes (HRTP3.SA: Quote, Profile, Research, Stock Buzz) and QGEP (QGEP3.SA: Quote, Profile, Research, Stock Buzz) that are largely in the exploration phase.
Though they are dwarfed by Brazil's state-controlled behemoth, many investors say OGX and its smaller peers are more focused on profitability than Petrobras, have strong corporate governance standards and have no plans to enter refining and logistics -- activities that drag down shareholder returns.
"Petrobras continues to be a company that is highly influenced by government decisions," said Danny Rappaport, who oversees about $111 million in assets for Sao Paulo-based asset management firm InvestPort and is underweight on Petrobras.
Petrobras' American Depositary Receipts (PBR.N: Quote, Profile, Research, Stock Buzz) are down 31 percent since the start of 2010 when investors became nervous about a massive $70 billion share offering that boosted the government's stake in the company.
Brazil boasts good conditions for start-up oil companies including a stable regulatory environment and vast territory where little oil and gas exploration has taken place.
Petrobras is largely tied up with huge ultra-deep water discoveries in a region known as the subsalt. This has opened up space for new companies to explore other areas such as the Solimoes Basin in the Amazon where HRT is drilling and the Parnaiba basin where OGX has made major gas discoveries.
"In a country with 29 sedimentary basins apt for petroleum exploration, there are opportunities for small, medium and large scale oil companies," said Milton Franke, HRT's planning director.
The list of Brazilian independents is set to grow, with initial public offerings planned for British-French firm Perenco and local firm PetroReconcavo. Portugal's Galp (GALP.LS: Quote, Profile, Research, Stock Buzz) has said it plans sell shares in its Brazil unit.
NEW PLAYERS
Shares of OGX, controlled by Brazilian billionaire Eike Batista, have nearly tripled since the start of 2009, when it made a string of discoveries. The company has 10.8 billion barrels of potential oil resources.
Rappaport said his fund has replaced Petrobras shares for OGX in some portfolios -- even though OGX is not expected to begin oil output until later this year.
HRT, which expects production to start in August, last year raised $1.5 billion in a stock listing, attracting investors with oil concessions in Brazil and Namibia. JPMorgan Chase & Co. expects HRT to invest $2.2 billion by 2013.
Investment banks including Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz), Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) and Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) began coverage of HRT shortly after the company listed its shares in Sao Paulo.
QGEP, a division of the Queiroz Galvao construction group, has 12 oil prospects and four discoveries in Brazil, mostly in the Campos Basin. The company raised $900 million in an IPO in February.
But interest in the smaller firms is unlikely to significantly erode trading of Petrobras.
Combined trading of Petrobras' shares (PETR3.SA: Quote, Profile, Research, Stock Buzz)(PETR4.SA: Quote, Profile, Research, Stock Buzz) accounts for about 13 percent of average daily trading volumes in the Bovespa stock exchange. OGX makes up less than 5 percent of trading.
And the share prices of Brazilian independent oil companies are highly dependent on new discoveries, meaning they are likely to be more volatile than Petrobras shares.
OGX shares sank as much as 17 percent in a single day in April after a report showed that the company's reserves grew less than expected. One month later, its shares rose 8 percent in a single session after it announced commercial viability of two gas fields.
Government intervention has been a key factor in explaining the flagging performance of Petrobras shares.
Brazil's policy of keeping fuel prices fixed even as oil prices rise -- a key part of the government's fight against inflation -- will likely continue hampering margins.
"Before you just had one choice, now you've got companies that are alternatives investments for those that want to diversify the risk of Petrobras and stay in the same sector," said Lucas Brendler, an analyst with Geracao Futuro.
(Additional reporting and editing by Guillermo Parra-Bernal; Dave Zimmerman)
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By Brian Ellsworth
RIO DE JANEIRO (Reuters) - Concerns of mounting political interference at Brazil's state-run oil company Petrobras are spurring interest in a crop of start-ups seeking to tap the South American nation's sizable reserves.
Worried that state meddling will push Petrobras toward less profitable activities, investors are eyeing alternatives such as OGX Petroleo (OGXP3.SA: Quote, Profile, Research, Stock Buzz), which has made extensive shallow water discoveries, or start-ups HRT Participacoes (HRTP3.SA: Quote, Profile, Research, Stock Buzz) and QGEP (QGEP3.SA: Quote, Profile, Research, Stock Buzz) that are largely in the exploration phase.
Though they are dwarfed by Brazil's state-controlled behemoth, many investors say OGX and its smaller peers are more focused on profitability than Petrobras, have strong corporate governance standards and have no plans to enter refining and logistics -- activities that drag down shareholder returns.
"Petrobras continues to be a company that is highly influenced by government decisions," said Danny Rappaport, who oversees about $111 million in assets for Sao Paulo-based asset management firm InvestPort and is underweight on Petrobras.
Petrobras' American Depositary Receipts (PBR.N: Quote, Profile, Research, Stock Buzz) are down 31 percent since the start of 2010 when investors became nervous about a massive $70 billion share offering that boosted the government's stake in the company.
Brazil boasts good conditions for start-up oil companies including a stable regulatory environment and vast territory where little oil and gas exploration has taken place.
Petrobras is largely tied up with huge ultra-deep water discoveries in a region known as the subsalt. This has opened up space for new companies to explore other areas such as the Solimoes Basin in the Amazon where HRT is drilling and the Parnaiba basin where OGX has made major gas discoveries.
"In a country with 29 sedimentary basins apt for petroleum exploration, there are opportunities for small, medium and large scale oil companies," said Milton Franke, HRT's planning director.
The list of Brazilian independents is set to grow, with initial public offerings planned for British-French firm Perenco and local firm PetroReconcavo. Portugal's Galp (GALP.LS: Quote, Profile, Research, Stock Buzz) has said it plans sell shares in its Brazil unit.
NEW PLAYERS
Shares of OGX, controlled by Brazilian billionaire Eike Batista, have nearly tripled since the start of 2009, when it made a string of discoveries. The company has 10.8 billion barrels of potential oil resources.
Rappaport said his fund has replaced Petrobras shares for OGX in some portfolios -- even though OGX is not expected to begin oil output until later this year.
HRT, which expects production to start in August, last year raised $1.5 billion in a stock listing, attracting investors with oil concessions in Brazil and Namibia. JPMorgan Chase & Co. expects HRT to invest $2.2 billion by 2013.
Investment banks including Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz), Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) and Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) began coverage of HRT shortly after the company listed its shares in Sao Paulo.
QGEP, a division of the Queiroz Galvao construction group, has 12 oil prospects and four discoveries in Brazil, mostly in the Campos Basin. The company raised $900 million in an IPO in February.
But interest in the smaller firms is unlikely to significantly erode trading of Petrobras.
Combined trading of Petrobras' shares (PETR3.SA: Quote, Profile, Research, Stock Buzz)(PETR4.SA: Quote, Profile, Research, Stock Buzz) accounts for about 13 percent of average daily trading volumes in the Bovespa stock exchange. OGX makes up less than 5 percent of trading.
And the share prices of Brazilian independent oil companies are highly dependent on new discoveries, meaning they are likely to be more volatile than Petrobras shares.
OGX shares sank as much as 17 percent in a single day in April after a report showed that the company's reserves grew less than expected. One month later, its shares rose 8 percent in a single session after it announced commercial viability of two gas fields.
Government intervention has been a key factor in explaining the flagging performance of Petrobras shares.
Brazil's policy of keeping fuel prices fixed even as oil prices rise -- a key part of the government's fight against inflation -- will likely continue hampering margins.
"Before you just had one choice, now you've got companies that are alternatives investments for those that want to diversify the risk of Petrobras and stay in the same sector," said Lucas Brendler, an analyst with Geracao Futuro.
(Additional reporting and editing by Guillermo Parra-Bernal; Dave Zimmerman)
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ABB is strengthening its marine presence in Brazil
ABB, the leading power and automation technology group, is planning to strengthen its marine business presence in Brazil, in order to serve the growing market in Latin America more effectively.
Latin America has quickly become a key strategic area for ABB’s marine business. Future plans, which include the establishment of a new Azipod C factory, marine service center and specialized Azipod service center, will help ABB to serve Brazil’s fast-growing shipbuilding industry and to fulfill the requirement for local content.
“ABB’s innovative solutions and quality products have won us a leading position in high value added vessel segments, such as drillships, semi-submersible rigs, offshore supply vessels and shuttle tankers”, said Heikki Soljama, head of ABB’s Marine and Cranes Business Unit.“Our portfolio fits well into Brazil’s shipbuilding plans and development, and our investments show ABB’s commitment and confidence in the Brazilian market, and we believe this will gain us a preferred position to supply thrusters for 28 drilling units for Petrobras”.
Several locations have been evaluated for setting up the new Azipod factory, including Pernambuco, Santos, and Rio De Janeiro, although the final decision has yet to be taken. The planned factory will have the annual capacity of over 30 Azipod units. The actual construction schedule will enable timely thruster delivery to Petrobras drilling units from Brazil.
A service center is also planned to be opened by 2014 in Brazil. It will have dedicated and specialized Azipod service personnel, a dedicated workshop and tooling to assist in overhauls and refurbishment. The service center will also provide spare parts for the local market.
Latin America has quickly become a key strategic area for ABB’s marine business. Future plans, which include the establishment of a new Azipod C factory, marine service center and specialized Azipod service center, will help ABB to serve Brazil’s fast-growing shipbuilding industry and to fulfill the requirement for local content.
“ABB’s innovative solutions and quality products have won us a leading position in high value added vessel segments, such as drillships, semi-submersible rigs, offshore supply vessels and shuttle tankers”, said Heikki Soljama, head of ABB’s Marine and Cranes Business Unit.“Our portfolio fits well into Brazil’s shipbuilding plans and development, and our investments show ABB’s commitment and confidence in the Brazilian market, and we believe this will gain us a preferred position to supply thrusters for 28 drilling units for Petrobras”.
Several locations have been evaluated for setting up the new Azipod factory, including Pernambuco, Santos, and Rio De Janeiro, although the final decision has yet to be taken. The planned factory will have the annual capacity of over 30 Azipod units. The actual construction schedule will enable timely thruster delivery to Petrobras drilling units from Brazil.
A service center is also planned to be opened by 2014 in Brazil. It will have dedicated and specialized Azipod service personnel, a dedicated workshop and tooling to assist in overhauls and refurbishment. The service center will also provide spare parts for the local market.
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