Edition nº 30
Provision for investments
The target of producing 1 million barrels of pre-salt layer oil per day by 2017, along with new discoveries in the Campos Basin and investments by Petrobras of US$ 174 billion, places Brazil as an attractive market for Canadian companies interested in partnerships and in developing innovative solutions.
In April of this year, Petrobras concluded its first sale of pre-salt layer oil abroad, committing to delivering 1 million barrels from the Lula field – considered the country’s first super-giant field, located in the Santos Basin, in the State of São Paulo –, to Chilean state-owned company Empresa Nacional de Petróleo (ENAP). In that same month, the company initiated a long-duration test in the Brava field, in the pre-salt layer of the Campos Basin, with expectations of achieving a daily production totaling 6,000 barrels. For the industry, the two basins, initially earmarked due to the beginning of commercial operations and renewed investments, became synonymous of new opportunities for national and international companies. Of those, Canadian companies are among the best suited to offer solutions, share technologies and start long-term partnerships.
Experience in the industry originates in Canada’s tradition in oil and gas. In 2010, Newfoundland and Labrador, among the most productive regions in the country, increased the total of barrels by 3 million, an increase of 3.1% in relation to 2009. A part of this result was the realization of investments, undertaken in recent years, in the reservoirs of Hibernia and Terra Nova, responsible for about 80% of the crude oil extracted from the ground by operator companies.
“The great potential of the pre-salt layer discoveries off the coast of Brazil, along with the continuous development of traditional offshore areas, generates interesting opportunities for Canadian companies experienced in this kind of exploration and in the supply of products and services for big production chains”, says Véronik Levesque, coordinator for communications at Atlantic Canada Opportunities Agency (ACOA), the economic promotion entity of Atlantic Canada.
Among specialists, businessmen and official representatives, the perception is that the Brazilian market has a strong appeal for investors. Initiatives by Export Development Canada (EDC), such as the staging of trade missions and the availability of credit lines, insurance and other financial resources to foster exports, show this. “Petrobras alone realizes annual purchases in the amount of about US$ 100 million from some 50 Canadian companies. There is much interest in being a member of the group of partners of the state-owned company”, states Jean Cardyn, the entity’s vice-president in Brazil.
TECHNOLOGY TRANSFER – “Foreigners want to participate in our market, while not necessarily manufacturing or rendering services in Brazil. The search for information, in our case, increased by about 50% this year, in comparison with 2010. Most of this interest relates to direct exporting to Brazil”, explains Bruno Musso, superintendent of the Canadian Association of Petroleum Producers (CAPP), which provides support for business activities. For the executive, the transfer of technology and the increase in installed capacity are the main fruits of more bilateral exchange. “Whoever arrives unites with a Petrobras supplier, for example, gaining time and the industry gets to absorb technology. The advantages are reciprocal”, adds Musso.
At Petrobras, doors are always open to foreign collaboration. With innumerous projects on the table, the state-owned company is expected to invest US$ 174 billion by 2013, conciliate the development of national industry with participation of foreign groups in several of the pre-salt layer projects, viewed as a revolution: Marlim, Marlim Sul and Roncador (Campos Basin), the main drillings of the past, with recoverable volumes between 2.5 billion and 3 billion barrels, lose in importance in comparison with Lula and Cernambi (Santos Basin), with reserves estimated, respectively, at 6.5 billion and 1.8 billion barrels.
“The initial strategy for us was to prepare for the pre-salt layer oil, and now we are in the pilot project development phase, encompassing the Lula, Lula Nordeste, Guará, Guará Norte and Cernambi Sul projects, to gain economy of scale in the short-term. Until 2017, our objective is to produce about 1 million barrels per day in the pre-salt fields”, explains José Luiz Marcusso, general manager of the Exploration and Production Operations Unit in the Santos Basin.
To reach this target, the state-owned company will have to find who has specialized knowledge in building infrastructure (and the logistics involved), submarine engineering, temperature and pressure control, development of platforms with direct access to reservoirs, among many other demands. “Partnerships enhance national content, based on gains in international competitiveness and cost reductions”, explains Marcusso in detail.
In 2010, representatives of the Canadian government and ACOA visited Petrobras and accompanied company executives on trade missions to Canada. Many of the country’s platforms are located on land, unlike exploration at sea off the Atlantic coast. The potential for future synergies in this case is real. “Several Canadian companies focused on exports develop specialized products and services that integrate worldwide oil and gas supply chains. Since Brazil has ambitious growth plans, working together may be fundamental”, emphasizes Véronik.
SPECIAL SOLUTIONS – With the industry heated up, partnerships increase. For SkyWave, a global satellite communication equipment supplier and provider of connection services, headquartered in Ottawa (Ontario), such partnerships may be the path to opportunities. “In 2010, we attended the Rio Oil & Gas fair, looking for partners and knowledge. Brazil, which is one of our main markets, has an enormous oil and gas industry. We offer technology so that companies can monitor, control or track remote assets in real time, such as ships, generators and oil pipelines, which are little exploited. With the pre-salt oil, the outlook for new business is even more promising”, assesses Silvio Ostroscki, sales director for Latin America.
The way to operate in the country and the world, explains the executive, is by looking for partners capable of creating specific technologies for local demands. “That is why we look for solution providers for large groups, such as Petrobras, that can transform our knowledge into customized products for the needs of their clients”, complements Ostroscki. In view of the possibilities, even Canadian companies that are not yet in the country, watch Brazil with great interest and go about finding out how to get started.
“For many years, we perceived Brazil’s enormous potential for our country. The dimension and technical complexity of developing the pre-salt layer fields reinforce this scenario”, observes Anthony Hall, CEO of Welaptega, specialized in data obtainment technologies and submarine safety. The more interesting segments in this case are those of deep water construction and inspection, repair and maintenance of floating production installations in the Campos Basin. With meetings set up with Petrobras executives and some of its suppliers, Hall has no doubts about the fact that Brazil and Canada have much to explore to strengthen exchange programs in this area.
“To that end, however, it is essential to have access to information, especially as related to setting up subsidiary companies. For small and medium size companies, in-depth knowledge of legal requirements, of the banking system and about maintenance of companies is crucial in the initial phase of a business”, stresses Hall.
DISTRIBUTION OF RESOURCES
US$ 174 BILLION FOR OIL AND GAS(from 2009 to 2013)
EXPLORATION AND PRODUCTION - US$ 104.6 billion
SUPPLY - US$ 43.4 billion
GAS AND ENERGY - US$ 13 billion
PETROCHEMICAL - US$ 4.4 billion
DISTRIBUTION - US$ 3 billion
BIOFUELS - US$ 2.8 billion
CORPORATE - US$ 3.2 billion
The new discoveries in the Campos Basin, in Rio de Janeiro, increase foreign investment and partnership opportunities for Brazilians and Canadians. In the last two years, Petrobras found new reserves that, taken together, add up to 2 billion barrels. The outlook is that the findings will partially finance pre-salt layer oil exploration projects in the Santos Basin:
Wells in operation - 775
Producing wells - 591
Fix Platforms - 14
Total share of reserves - 10%
PRE-SALT LAYER OIL STRATEGY
Expand production capacity of highly competitive sectors;
Develop competition in sectors of medium competition;
Encourage new national entrants;
Encourage the association of national and international companies;
Encourage the installation of international companies in Brazil.