Brazilian Infrastructure Development

Transcription

1 Competiveness Agenda Ludmilla Corkey July 11, 2011

2 Agenda Brazilian Infrastructure Development Context Main drivers Public Policies REPETRO Local Content Industry Actions Global competitiveness

3 Classification: Internal

4 Context Pre-salt sets the tone New discoveries are propelling Brazil as a major global oil producer New regulatory framework Political Pressure to build drilling and production units locally Few infrastructure projects are as challenging as the development of potentially enormous gas fields

5 Context Situation of the countries with most reserves Reserve Distribution Others China Kazahkstan Brazil (1) Russia OECD members Stable democracy Absence of internal or external armed conflicts Solid regulatory framework History of foreign investment (1) Brazilian reserves include pre-salt estimates (80 billion barrels) Source: EUA, BP Statistical Review of World Energy June 2009, ANP, Plano de Negócios Petrobras , Análise Booz & Company

6 Main drivers Forecast demand for drilling units to remain steady peak in 2011 Demand for goods and services will be around USD 400 billion before 2020 Sufficient scale to develop a solid production chain for local goods and services Delivery of Drilling units Source: Plano de Negócios Petrobras (2009); PROMINP; Clippings; Análises Booz & Company

7 Main drivers Demand for FPSOs, semisubmersible units and fixed platforms will significantly increase in the next years. The construction of new production units can raise the demand for equipment produced in Brazil and EPC local activities Delivery of production units

8 Main drivers Demand for supply boats and oil tankers will be over 300 units by 2020 The construction of large vessels will require 1.1 million tons of steel and a significant volume of large equipment Investments on large vessels in 2012 around USD 645 million Investments on supply boats in around USD 985 million Delivery of supply boats and oil tankers

9 Public Policies Classification: Internal

10 Public Policies REPETRO REPETRO decree passed in 1999 Special customs regime for the export and import of goods for the oil and gas industry Created to meet the industry demands Segments benefited by the REPETRO Vessels related to research and production of oil reserves or destined to supply and storage Machinery, devices, equipment and tools destined to research and production Drilling and production platforms Structures for platform support

11 Public Policies Local Content Local Content requirements have been in the Concession Agreements since the first bid round Rounds 5 and 6 Local Content weight on bids is increased creating incentive for high LC bids From round 7 requirement becomes more detailed (items and sub items) LC bids to be within a minimum and a maximum

12 Industry Actions Classification: Internal

13 Industry Actions Competiveness Agenda ONIP Industry study done by Booz & Co Competiveness Agenda for the offshore oil & gas production chain in Brazil Supported by ABEMI, ABIMAQ, FIRJAN, IBP, ONIP and SEBRAE Created the Industry Policy team to follow up on proposed actions FIRJAN Supply market is under pressure to deliver on LC requirements. Room for improvement of an industrial policy to boost competitiveness in the local market Open for a joint approach towards government

14 Industry Actions Competiveness Agenda 1. Generate and spread knowledge and innovation throughout the chain 2. Increment production and enhance local production processes 3. Strengthen industrial activities in 3-5 industrial sectors 4. Stimulate centers of technological excellence 5. Simplify and increase transparency for Local Content policies 6. Strengthen the national business system and its international participation 7. Attract technology and investment for foreign companies 8. Guarantee tax, technical and commercial isonomy among local and foreign competitors 9. Establish internationally competitive guarantee and credit conditions 10. Access to raw materials and infrastructure in competitive conditions

15 Industry Actions Competiveness Agenda IBP Subcommittee Participants (Statoil, Shell, Chevron, BG, Petrobras, OGX, Repsol and Devon). Challenges to meet Local Content requirements on current and future projects Need to increase local supply High level of fines Increased costs for concessionaires Impact on schedules

16 Conclusion Competiveness Agenda: Unified approach (multiple stakeholders - one message) Aligned message to decision makers More advantageous no political conflicts increases likelihood of making progress with government entities.

17 Competiveness Agenda Ludmilla Corkey July 11, 2011