Plugin-brazilian Offshore Industry

8/8/2019 Plugin-brazilian Offshore Industry

1/23

JANUARY 2010


2/23

1. PRESALT

Expected to surpass Gawhar in Saudi Arabia very shortly.

Pre-salt in the Atlantic Ocean - part of a region that extends about 800 kmsalong the Brazilian Coast.

Waters as deep as 3,000 metres and as much as 7,000 metres below theseabed beneath a layer of salt.

112,000 square kilometres

in deep and ultra-deepwater reservoirs, of which41,000 square kilometres,have not yet been put upfor tender.


3/23

2. PETROBRAS INVESTMENTS AND SHOPPING LIST

Petrobras will invest US$174bnthrough 2013. A total of 23 developmentand production projects are forecast tobe up and running by this date.

By 2020, US$111bn will be invested inthe pre-salt reservoirs alone.

Petrobras is about to start thepurchasing program for 550 generators,550 derricks, 350 turbines, 700,000 tonsof structural steel for platform hulls, 550wet Christmas trees, 500 wellheads,80,000 pumps, 18,000 storage tanks,and 4000km of flexible lines.


4/23


Petrobras has more than 55,000 itemsin a preliminary shopping list, of whichdrilling packages and FPSO packages,sub-sea equipment and compressors are

considered to be the most critical. Thecompany will also renovate its oil tankerfleet with 26 ships already contractedand another 23 to be tendered.

28 rigs will be built in Brazil: 24 10,000-14,000 feet drillships, 4 semi-submersibles.

18 FPSOs (some Petrobras officials say40).


5/23


Almost 200 supply vessels.

Revamp of 43 existing platforms.

4 additional LNG vessels.

Six drillships in the internationalarea (despite the divestitureprogramme in 17 countries deniedby Petrobras).


6/23

3 NATIONAL CONTENT REQUIREMENT

These tenders will all containgradually increasing minimum localcontent requirements that can go ashigh as 95 percent in 2017.

This means that interestedcompanies should run and startlooking out for local partnerships,areas to establish new facilities,

operational basis, enrolment assupplier with Petrobras (CRCC), etc.

In the pre-salt area, the Braziliangovernment has already made itclear that the national content

requirements in E&P will escalate toaround 85 to 95 percent.


7/23

3 NATIONAL CONTENT REQUIREMENT

This means that whoever wishes to havea piece of the pre-salt pie will have toestablish significant local presence, inparticular equipment suppliers (topsides,

pipes, risers, umbilicals, drillingpackages, power packages for offshoreunits, etc.), who will likely need to buildproduction facilities in Brazil.

As a result of this, international majoroffshore contractors and suppliers areestablishing operational andmanufacturing facilities in Brazil, not tomention shipyards.

This is the only way these companieswill be able to have contracts withPetrobras or Petrobras contractors in thenear future.


8/23

4 CRCC REGISTRATION PETROBRAS VENDOR`S LIST

CRCC is a registration needed to havecompanies included in PETROBRASvendor list according to their productlines.

Based in the information contained inthe CRCC, PETROBRAS will invitecompanies to participate in tenders ordirect purchase negotiation of products

listed in the CRCC data base. With very few exceptions, In a fewmonths, absent CRCC registration,companies will be prevented from sellingor rendering services to PETROBRAS.


9/23


Companies are required to submitliterally more than a hundred documents,and in-depth detail of its facilities,manufacturing processes, personnel

working at each facility, technicalspecifications of equipment, variouscertificates according to each product,and in-depth information anddocumentation on each company legal

and financing standing.

by a multidisciplinary group includinglawyers, engineers and accountingpeople specialized in this kind of

registration, most of them retired, formerPetrobras engineers who worked at theCRCC division.

CRCC registration is a highlycomplex undertaking.


10/23


Due to our relationship with thepeople in charge of this processwith Petrobras, developed overyears of work in this area, WE ARE

NOW IN A POSITION TO GET CRCCWITHIN 90-120 DAYS FOLLOWINGFILING OF CRCC APPLICATIONform accompanied by at least basicdocumentation. Other firms wil

likely take one year and a half ortwo years.


11/23


THE FIRM acknowledges it has read and understands the Foreign CorruptPractices Act (the FCPA) (15 U.S.C. Section 78dd-1, et. seq.) as amended.THE FIRM represents warrants and covenants that it has not and will notviolate any provision of the FCPA, regardless of the applicability of the law as

a whole to THE FIRM. Specifically, THE FIRM represents, warrants andcovenants that it has not and will not, directly or indirectly, pay, promise oroffer to pay, or authorize the payment of, any money or give any promise oroffer to give, or authorize the giving of anything of value, to:


12/23


(a) an employee of PETROBRAS, orany officer, employee, agent orrepresentative of any government,including any department, agency, or

instrumentality thereof or any personacting in an official capacity thereforeor on behalf thereof;

(b) a candidate for political office, any

political party or any official of apolitical party; or

(c) to affect or influence any act ordecision of such government orinstrumentality, in order to assist THE

CLIENT in developing a businessopportunity and in particularregistering THE CIENT`S companieswith PETROBRASs CRCC.


13/23


(ii) No part of any remuneration paid by THE CLIENT or any of the entitiesbelonging to the economic group of THE CLIENT will be used directly orindirectly to make any payment to any PETROBRAS employee, or someone

directly or indirectly related to a PETROBRAS employee, or to any person orentity, or to provide any payment, gratuity, emolument, or other benefit to anofficial of any government or any political party.

(iii) THE FIRM represents warrants and covenants that it will comply fully with

all applicable laws, rules and regulations of Brazil, the United States of Americaand Norway.


14/23

5 PETROBRAS CAPITALIZATION

In order to achieve such audaciousplans, Petrobras will rely on largecapitalisation from shareholders,especially the controlling stakeholder,

the Brazilian Government. Petrobraswill further count on cheap andabundant financing from governmentdevelopment bank BNDES, and otherstate-owned banks.


15/23

6. CHANGE IN THE STRUCTURE OF PETROBRAS CONTRACTS

In order to reduce prices of equipment,and at the same time allow for the gradualescalation of local content requirement inits projects, the company is breaking up

large EPC, service and supply contractsinto smaller packages, emphasisinggreater detail and standardisation oforders, starting with an ambitiousprogram of eight FPSO's to be locally

built, in a dry-dock chartered byPetrobras itself in the southern part ofBrazil, in a city called Rio Grande. Inorder to reduce prices, Petrobras is alsoplanning to revise its standard contracts

in order to reduce risk to the supplier.


16/23

6. CHANGE IN THE STRUCTURE OF PETROBRAS CONTRACTS

Invitations going to Brazilian contractors,who on their turn will procure technologicalpartners, operators, financials partners,project companies, etc.

Most Brazilian contractors unfamiliar with thepetroleum offshore industry and stillilliterate.

Desperate need for association with

international companies.By becoming established in Brazil, foreigncompanies may avoid the situation above andbe directly invited to participate in tenderscompeting with other Brazilian contractors.

New ports and shipyards are already under construction. It is already clear thatevery major shipyard in the world will have a significant presence in Brazil (inassociation with local major contractors) in the next couple of years.


17/23

7. PRIVATE OPERATORS

Private companies are coming up with hugeinvestments as well. Devon, Shell, Chevron

and StatoilHydro will collectively investUS$25bn through 2013.


18/23

8. GAS PIPELINES AND LNG

In addition to this, a new lawopened up concessions for gaspipelines. Among the projectsalready authorised for tender is

the 948km Middle North GasPipeline, budgeted at US$1.6bn.

In the gas sector, US$3bn will be

spent on developinginfrastructure for LNG. The targetis to build a liquefaction plant tocome into operation in 2013 witha capacity to liquefy 10 million

cubic metres per day.


19/23


Petrobras also intends to build a terminalfor docking LNG tankers in order to beable to export LNG. Two LNG terminalsexist today (Pecm and Guanabara), and a

third one will likely be built in Rio Grandein the short-term, with a capacity for 14million cubic metres per day.

A fourth one is also been studied. Alsounder study is the expansion of the LNG

terminal in the Guanabara Bay, fromcurrent 14 million cubic metres per day to20 million. With all the projects, Petrtobrasestimates capacity of 166 million cubicmetres per day of natural gas in 2017.

4 additional LNG vessels.


20/23

9 ANP OIL LICENCES BID ROUNDS ON HOLD

ANP has not since 2007 held tender for new offshore exploration areas.

The industry is pressing government to conduct tenders of outside-pre-saltareas urgently, for it cannot be in such a standstill for so long.


21/23


The government froze all tenders until thenew regulatory framework for pre-salt isintroduced.

This includes production sharing

agreements for new areas andmaintaining the concession regime for theareas already tendered, some as long agoas 2000. The model is very much like theRussian model, only that the PSC is

mandatory for the new areas, and notdiscretionary. One can thus expect newtender for promising areas outside thepre-salt areas.

Tenders for the pre-salt areas may take awhile to come up, since a government-proposed specific regulatory frameworkfor the pre-salt cluster has just beenpassed on to Congress in the form of four

different bills.


22/23

10. CONCLUSION

(i) Brazil boasts a booming economy barelyshackled by the world financial meltdown;

(ii) Brazil is an investment-grade country;

(iii) Brazil blossoms among the BRIC's;(iv) Brazil is clearly poised to become the hugenext safe hub for the world's smart money;

(v) Norway is a preferential partner for Brazil in

the oil and gas sector and in the petroleumoffshore industry.


23/23

Av. Rio Branco 89, 28th floorManhattan Tower+ 55.21.3554.7860

Heller Redo Barroso

[email protected].: + 55.21.8103.4004

www.hrblaw.com.br

Date post:	10-Apr-2018
Category:	Documents
Upload:	alima-tazabekova
View:	214 times
Download:	0 times

Plugin-brazilian Offshore Industry

Documents