IMI: Brazil Oil and Gas Best Sales Prospects and Highlights

11/23/12
Petrobras project portfolio includes 980 projects that will require investments of USD$236.5
billion between 2012 to 2016. Of these projects, approximately 833 projects valued at
USD$208.7 billion have already been approved and are being implemented. The remaining 147
projects, valued at USD$28 billion are still being reviewed by Petrobras to confirm their viability.
In a recent presentation, made during an oil and gas industry association event, Petrobras
stressed the need to get lower bid prices and for the stricter fulfillment of delivery requirements
in order to meet the goals and objectives of their ambitious business plan.
Petrobras is reviewing all their projects in order to implement a cost reduction plan. A Petrobras
spokesperson stated that Petrobras supports local content (LC) and will increase its LC
requirements even in situations where they are not obliged to do so by contractual clauses.
However, Petrobras will continue to closely monitor price levels and delivery time issues
regarding their domestic suppliers. Petrobras LC Department will prepare reports listing LC
requirements on a project-by-project basis and will also report actual fulfilled LC requirements.
The spokesperson highlighted the fact that Petrobras holds the largest number of offshore oil
projects in the world and the sheer size of their ongoing and upcoming projects are attracting
many foreign equipment and service suppliers that are opening up or expanding their facilities in
Brazil. It's Petrobras goal to establish long-term business relationships with its suppliers as
long as they have competitive prices and meet their delivery commitments.
As an example, Petrobras showed the table below to illustrate cases of foreign companies
expanding their current facilities in Brazil or opening up new facilities to meet Petrobras and
other oil companies LC requirements:
Products/Equipment
Subsea pipes

Umbilicals

Companys expansion plans in Brazil

NKT Flexibles: new plant of flexible

lines in Brazil in 2013

Technip group: opening up a new plant

GE Wellstream: By 2013, their current

plant will be expanded by 60%.

Prysmian: plant explansion to produce

flexible lines

Butting: building a new plant to

manufacture pipes

Duco & Nexans: discussing new plants

in Brazil

Oceaneering (MSD): current plant

capacity is expected to double in 2013

MFX: 80% plant expansion by 2013

Aker: will grow their plant capacity

FMC: same as Aker, and will build a

new R&D center

GE: expansion of its Jandira plant and

construction of a new unit

Cameron: industrial expansion

Rolls Royce: building a new unit in

Santa Cruz (Rio) for turbo generators)

Dresser Rand: building a new unit in

Santa Brbara do Oeste (for turbo
compressors)

Offshore cranes

MEP Pellegrini: will build a plant in

Brazil in partnership with a local
company

Drill pipes

V&M do Brasil: Adapting current

facilities to produce drill pipes

Corrosion Resistant Alloys (CRA) Pipes

V&M do Brasil: is producing alloys

resistant to high corrosion

Large diameter tubings/pipes

Usiminas: is obtaining technical

qualification for its current facilities

Offshore steel structures

Metasa (Brazilian company):

announced investments to expand
current facilities to produce metallic
offshore structures for oil rigs

Automation

Emerson: industrial expansion to

assemble equipment in Brazil

Subsea equipment

Turbo machinery

Source: Petrobras July 2012 presentation at the ABIMAQ event

In conversations with trade contacts, CS Rio learned that several of these major (multinational)
original equipment manufacturers (OEMs) have, in turn, been trying to attract their supply chain
companies to establish facilities in Brazil. However, in many cases, due to the speed and
number of oil and gas projects in Brazil, a large percentage of certain components, auxiliary
equipment, parts, and peripherals will continue to be imported in order to meet delivery times
and technological requirements.
At the same time, the following broad list of equipment and services can be considered best
sales prospects for Petrobras, given the companys high demand:
Equipment and materials required for 2012-2017 (according to Petrobras, the list below
does not exhaust all the equipment and materials required for this timeframe):

Equipment/Materials

Unit

Total (2012-2017)

Pumps

Unit

4,386

Compressors

Unit

387

Cranes

Unit

93

Structure steel (ships hull)

Tons

453,850

Structure steel (FPSO hull)

Tons

1,092,000

Structure steel (rigs hull)

Tons

560,000

Flares

Unit

46

Power generators (13.8 kV)

Unit

299

Power generators (0.48 kV)

Unit

158

Tanks

Unit

684

Processing towers

Unit

295

Reactors

Unit

189

Wet Christmas trees

Unit

1,135

Offshore wellheads

Unit

1,307

Dry Christmas trees

Unit

2,047

Onshore wellheads

Unit

2,049

Manifolds

Unit

99

Umbilicals

Kilometer (km)

6,492

Tubing/pipes (onshore)

Tons

172,084

Tubing/pipes (offshore)

Tons

83,682

Flexible pipes

Km

5,977

Risers

Km

2,361

Turbines (gas)

Unit

151

Turbines (steam)

Unit

203

Special alloys for tubing

and casing

Tons

41,325

Turbo generators

Unit

138

Polyester mooring cables

Km

1,147

Fiberglass pipelines

Km

1,966

Electrical cables for CSP

(oil, ozone and heat resistant

Km

38,485

Steam generators

Unit

Hcc reactors

Unit

Special alloy boilers,

reactors, towers, and
pressure vessels

Unit

219

Heat exchangers

Unit

196

Reformer furnaces

Unit

elastomeric compounds)

Source: Petrobras presentation at the BRATEC Houston event, May 2012

In view of Brazilian oil and gas policy relating to local equipment and services content
requirements, CS Rio encourages U.S. suppliers to seek partnerships with local Brazilian
companies at their earliest convenience because as more and more international firms come to
Brazil later entrants will find lesser quality partners and likely face higher market entry costs.

The US Commercial Service offers a host of services to assist U.S. companies to export or go
international. If you are interested in learning how we can help your company, please find, on
the following link, and contact your nearest U.S. Export Assistance Center:
http://export.gov/usoffices/index.asp
Additional information on the Brazilian oil and gas sector, including upcoming trade shows in
Brazil and various informative power point presentations can be viewed at:
http://export.gov/brazil/industryhighlights/energy/eg_br_023986.asp