Maritime Sector in Brazil

Innovation Norway Rio office

NCE Maritime 04.02 2013

Content
Market description
Shipyards an overview

Industry numbers Opportunities potential Norwegian suppliers

Happenings 2013

Market Overview
Brazilian Shipyards order book has 367 orders for Shipbuilding and Offshore construction. The maritime market is experiencing a new booming. After the 70s, this industry is again on the spot attracting a lot of investments. 9 new shipyards under implementation in different regions of the country. Brazil is currently the 4th biggest drilling unit builder and the 2nd in production platform construction. 28 new drilling units hired by Sete Brasil on behalf of Petrobras. Potential Norwegian Expert Contracts: more than USD 7bn.
Source: SINAVAL, ABENAV.

Brazilian Shipbuilding Industry Fact Sheet

In the 70s was the 2nd largest in the world 14 yards w/ steel processing capacity >30,000tons/year 6.9bn DWT order book 9 new shipyards under implementation in different regions of the country

62,000 workers directly employed. In 2017 the estimate is to reach 100,000 workers. 20 offshore oil platforms under construction
33 offshore deepwater drilling rigs

Steel processing total capacity of 562thd tons/year

16,8bn BRL of FMM disbursements since 2001

Source: Sinaval

Orderbook
Production Platforms: 14 will be built in Brazil and 6 will have the hulls converted in international shipyards

Type
Production platforms Drilling rigs

Quantity
20 28

Container ships
Bulk carriers Offshore support vessels (OSVs)

7
6 70

Brazilian orderbook accounts for 8% of the total activity worldwide

Investments of 8.7bn BRL will increase the steel processing capacity to 950,000 T/year
Source: SINAVAL

Products ship
Tankers Bunkers

29
26 11

Gas tankers
River barges River pushers

15
111 26

Harbor tugs
Total

18
367

Shipyards in Brazil

Shipyards in Brazil

The shipping industry is concentrated in the extension from Rio de Janeiro to Rio Grande do Sul states.

Source: Sinaval

New Shipyards and Production Capacity

New shipyards Estaleiro Enseada do Paraguau Estaleiro Jurong Aracruz Estaleiros do Brasil Estaleiro CMO Estaleiro OSX Estaleiro Oceana Estaleiro STX Promar Estaleiro Rio Tiet Estaleiro Wilson, Sons Rio Grande State BA ES RS PE RJ SC PE SP RS Steel Processing 1000T/year 36 48 30 40 180 20 20 5 13 Area 1000km 1600 820 1500 400 2500 310 400 250 120 Dry dock 1 1 1 0 1 1 1 0 0 Carrier Quay 0 0 0 0 4 0 0 1 1 1 1 1 1 1 1 1 1 1

Total
Source: SINAVAL and shipyards

392

7900

Some industry numbers

Petrobras Construction Needs

Source: Petrobras

Production Units Construction, Destinations, Opportunities

Source: Petrobras

Drilling Units Construction, Destinations, Opportunities

Source: Petrobras

Tank Ships (PROMEF Program), Shipyards, Opportunities

Source: Petrobras

PROMEF Transpetro Fleet Renewal Program

Shipyards Atlntico Sul Atlntico Sul Atlntico Sul Types of Ships 10 Suezmax 4 Suezmax DP 5 Aframax 2 2 2012 1 2013 2 2014 3 2015 2 2016 2 3 1 1 2017 2018 2019 2020

Atlntico Sul
Mau Mau STX Promar

3 Aframax DP
12 products 4 Panamax 8 gas tankers 2 1 3 2 2 1 3 3 3 3

TBD
Total:
Source: Sinaval

3 bunkers
49 ships 3 3 8 8 8 5 2

1
5

2
6

Opportunities Potential Norwegian Equipment

15

Overview : Setebrasil (www.setebr.com)

Setebrasil is a Brazilian company owned by Petrobras, Brazilian Pension Funds, Brazilian large banks, etc. Sete is to build 28 drilling units in Brazilian shipyards. Minimum local content requirement: range from 55% to 65% more than USB 25 bn.

Local content requirements increasing progressively for units under construction at the same shipyard.
Assets: drillship and semi-subs, 6th generation drilling units, operating in water depths of 3.000 meters, and Dynamic Position (DP-3).

Setebrasil has partnered with reputable operators who will have minority ownership of their respective units.
16

Drilling Units Main Characteristics

Water depth: 3,000 meters Drill Pipe: 10,000 meters
Dynamic Positioning System (DP): IMO Class 3 Derrick: allows simultaneous operations of pipe assembly and drilling Maximum work pressure: 15,000 psi Living Quarters: 180 people Self propelled, minimum speed 11 knots for Drillship and 7.5 for Semi-Sub

Potential Norwegian Equipment

Drilling Packages Marine Packages

Modules

Main Drilling Systems Drilling System Sub Suppliers

Thrusters Generators Dynamic Positioning

Living Quarter Drilling Module Hull Modules
18

Potential Norwegian Equipment

Design Vessel Classification Paint Rescue Boats/Lifeboat Dehumidifier Fire Alarm and Detection System Lights Consultancy Services Screw Air Compressor Switchboards Gyro Compass Integrated Control and Monitoring Systems Radar Transformer
19

Additional Equipment/Content

Potential Norwegian Equipment

Vaccum Toilet Systems Aluminium Structures, helideck Control Systems Davits Support Systems Lanterns Life Rafts Cranes and Winches Burner Booms Fire Fighting Systems Fendres Elevators Anti Fouling System/ICCP Doors and Hatches Furniture Wheelhouse Consoles
20

Additional Equipment/Content

Overview of the SETE yards

Potential Norwegian Equipment

Sete financing will mainly be provided by BNDES (Brazilian Development Bank).

GIEK/Eksportkreditt will play a very important role in the transaction. DNB and Banco Santander are financial advisors for Sete. Setebrasil is emphasizing the importance of contracts of Norwegian interest and production to be structured in a way to maximizes the financing for Sete from GIEK/Eksportkreditt Workshops to present Norwegian suppliers to the shipyards that won the contracts will be conducted in the beginning of March (week 10 to be confirmed)
22

Events 2013

Happenings 2013
SETE Brazil workshop March 4. 8. (TBC)
(FINEP O&G industry matchmaking March 14. 15.)

OSV Conference Brazil May 23. 24. Navalshore (with NME) August 13. 15.
OTC Brazil October 29. 31.

Keep in mind
SETE project:
Singaporean owned yards (Brasfels, Jurong) contracts are

generally handled from Singapore Norwegian content requirements from GIEK/Eksportkreditt vs. Local content requirements

Local content:
New ANP proposal expected soon Hearing round closes February 14. No major changes expected

Appendix: Shipyards in Brazil, description

O&G Production Curve (kbpd)

Honrio Bicalho Shipyard

Workforce peak: 4000 workers (May/13);
P-58 P-63

4200

P-58 (LC 63%)

Whales Park Construction of 3 modules and integration; P-63 (LC 65%) Papa-Terra; Construction of 7 modules and integration;
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2503 2022

Source: Petrobras

Source: Petrobras

Rio Grande 1 Shipyard (ERG1)

Workforce peak (ERS1 and 2): 7750 workers (Jul/15); P-55 (LC 65%) - Roncador Mod. 3 Construction of the 7 modules, deckbox and integration; P-66 Replicant 1 (LC 70%) - Lula High;

O&G Production Curve (kbpd)

P-73 4200 P-66, P-67, P-68, P-69 P-55 P-70 2503 P-71

2022

Construction of the Hull; P-67 Replicant 2 (LC 70%) - Lula Central; Construction of the Hull; P-68 Replicant 3 (LC 70%) - Lula South; Construction of the Hull; P-69 Replicant 4 (LC 70%) - Lula North; Construction of the Casco; P-70 Replicant 5 (LC 70%) - Lula Extreme South; Construction of the Hull; P-71 Replicant 6 (LC 70%) - Iara Horst; Construction of the Hull; P-72 Replicant 7 (LC 70%) - Iara NW; Construction of the Hull; P-73 Replicant 8 (LC 70%) - Carcar; Construction of the Hull;

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Petrobras

Source: Petrobras

Rio Grande 2 Shipyard (ERG2)

Workforce peak (ERS1 and 2): 7750 workers (Jul/15); 3 drilling rigs: Cassino (LC 55%) Lula North Curumim (LC 60%) Exploration Salinas (LC 60%) - Exploration

O&G Production Curve (kbpd)

Salinas 4200 Cassino

2503 2022

Curumim

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Petrobras

Source: Petrobras

O&G Production Curve (kbpd)

Brasfels Shipyard
Workforce peak: 7500 workers (Aug/12); 6 semi-submersible drilling rigs: Urca (LC 55%) Franco East Frade (LC 55%) Jpiter Bracuhy (LC 60%) Carcar Cidade So Paulo Cidade Paraty P-61 2022

P-66 P-69 Urca

Portogalo 4200

Mangaratiba 2503 Frade Botinas Cidade Mangaratiba Bracuhy

Portogalo (LC 60%) Iara Surround Mangaratiba (LC 65%) Florim Botinas (LC 55%) Florim
P-61 (LC 65%) Papa-Terra Construction of the hull and integration P-66 (LC 67%) Lula High Construction of 6 modules and integration P-69 (LC 67%) Lula North Construction of 6 modules and integration Cidade So Paulo (LC 65%) Sapinho Pilot Construction of 4 modules and integration Cidade Paraty (LC 65%) Lula NE Pilot Construction of 5 modules and integration Cidade Mangaratiba (LC 65%) Iracema South Construction of 4 modules and integration
Source: Petrobras

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Petrobras

O&G Production Curve (kbpd)

UTC Engenharia
Workforce peak: 3000 workers (Aug/12); P-55 P-55 (LC 65%) Roncador Mod. 3 modules construction: M-07 Booster Compression and Gas Dehydration M-08 Amines Unit 2503 2022 P-58 P-62

4200

P-58 (LC 63%) Whales Park modules construction: M-01 Gas Dehydration M-03 CO2 and H2S Removal M-05/06/07 Oil Processing M-10 Water Injection M-10A SRU Sulfate Removal P-62 (LC 63%) Roncador Mod. 4 modules construction: M-01 Gas Dehydration and Torch System M-03 CO2 and H2S Removal M-05/06/07 Oil Processing M-10 Water Injection M-10A SRU Sulfate Removal

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Petrobras

Source: Petrobras

O&G Production Curve (kbpd)

Brasa Shipyard
Workforce peak: 1900 workers (Mar/13); Ilhabela Cidade de Ilhabela (LC 65%) Sapinho North Construction of 10 modules and integration of the FPSO 2022 2503

4200

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Petrobras

Source: Petrobras

O&G Production Curve (kbpd)

Mau Shipyard
Workforce peak: 3300 workers (Jul/14); Celso Furtado (LC 74%) Product Vessels 48ktpb Srgio Buarque de Holanda (LC 73%) Product Vessel 48ktpb 2022 Rmulo Almeida (65%) Product Vessel 48ktpb Jos Alencar (LC 65%) Product Vessel 48ktpb 4 Vessels Panamax (LC 65%) 65 a 80ktpb
2011 2012

1 Panamax 2 Products CF JA

3 Products

4200

2503 3 Panamax SBH, RA

2013 2014 2015 2016

3 Products
2017 2018 2019 2020

3 Product Vessels (LC 65%) 48ktpb

5 Product Vessels (LC 65%) 32ktpb

Source: Petrobras

Source: Petrobras

Nuclep Construction Site

Workforce peak: 2600 workers (Jan/12); P-58 (LC 63%) Whales Park Construction of 5 modules M-02 (A/B/C) Gas compression M-09 Booster compressor M-12 Cargo handling P-62 (LC63%) Roncador Mod. 4 - Construction of 5 modules: M-02 (A/B/C) Gas compression M-09 Booster compressor M-12 Cargo handling Cidade Paraty (LC 65%) Lula NE Pilot Construction of 4 modules: Module of cargo handling Module of manifold Module of treatment of gas A Module of compression and gas injection

O&G Production Curve (kbpd)

P-58 P-62 Ilhabela Mangaratiba 4200

Paraty

2503 2022

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Cidade Ilhabela (LC 65%) Sapinho Norte Construction of 4 modules: TS005 Injection of chemical products TS077 Flare vases TS078 CO2 Removal TS079 H2S Removal Cidade Mangaratiba (LC 65%) Iracema Sul Construction of 5 modules: Module of water and utilities injection Module of gas treatment Module of electrical equipment Module of high and low separation Module of flare vases

Source: Petrobras

O&G Production Curve (kbpd)

Atlntico Sul Shipyard

Workforce peak: 8000workers (Aug/16); 7 drillships; Arpoador (LC 55%) Lula Norte Copacabana (LC 55%) Franco NE Grumari (LC 60%) Carcar 1 2 Suezmax 2022

2 Suezmax P-62 3 Suezmax

3 Suezmax 1 Aframax Marambaia

4200
Ipanema 2 Aframax 2 Aframax Leme Leblon

2503
2 Suezmax, Grumari Arpoador Copacabana
2015 2016 2017

Ipanema (LC 60%) Jpiter Leblon (LC 65%) Franco Leste Leme (LC 65%) Franco Leste Marambaia (LC 65%) Entorno de Iara
P-55 (LC 65%) Roncador Mod. 3 Hull construction P-62 (LC 63%) Roncador Mod. 4 Conversion, construction of 3 modules and integration Joo Cndido (LC 70%) Suezmax 158ktpb Zumbi dos Palmares (LC 65%) Suezmax 158ktpb 8 Suezmax ships (LC 65%) 158ktpb

JC 1 Suezmax
2012 2013 2014

1 Suezmax 3 Aframax
2019 2020

2011

2018

5 Aframax ships (LC 65%) 80 to 120ktpb

4 Suezmax DP ships (LC 70%) 140 to 175ktpb 3 Aframax DP ships (LC 70%) 80 to 120ktpb
Source: Petrobras Source: Petrobras

Enseada do Paragua and So Roque Shipyards

Workforce peak: 4200workers (May/16); 2 auto-raising drilling rigs; P-59 (LC 70%) Pero P-60 (LC 70%) BM-C-27

O&G Production Curve (kbpd)

Comandatuba

4200
Pituba

P-59 P-60

Boipeba

2503
Interlagos Itapema

2022

Ondina

6 drillships: Ondina (LC 55%) Iara Horst Pituba (LC 55%) Iara NW Boipeba (LC 60%) Exploration Interlagos (LC 60%) Exploration Itapema (LC 65%) Iara NW Comandatuba (LC 65%) Exploration

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Petrobras

Source: Petrobras

O&G Production Curve (kbpd)

Jurong Aracruz Shipyard

Workforce peak: 6500workers (Apr/15); 6 drillships: Guarapari (LC 55%) Tupi NE Camburi (LC 55%) Guar South 2503 2022
P-68 Guarapari
2012 2013 2014 2015

P-71 Camburi Itaoca

4200

Itanas Siri

Sahy
2016 2017 2018 2019 2020

Itaoca (LC 60%) Iara NW Itanas (LC 60%) Exploration Siri (LC 65%) Exploration Sahy (LC 65%) Exploration
P-68 Replicant #3 (LC 67%) Lula South Construction of 6 modules and integration P-71 Replicant #6 (LC 67%) Iara Horst Construction of 6 modules and integration

2011

Source: Petrobras

Source: Petrobras

O&G Production Curve (kbpd)

OSX Shipyard
Workforce peak: 12000workers (Jul/16); P-67 Replicant #2 (LC 67%) Lula Central Construction of 6 modules and integration P-70 Replicant #5 (LC 67%) Lula Extreme South Construction of 6 modules and integration
P-67 2503 2022 P-70

4200

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Petrobras

Source: Petrobras