NOT AN OFFICIAL UNCTAD RECORD

Building up the Oil & Gas Cluster in Brazil: the role

of the Supply Chain of Goods and Services

ONIPNational Organization

of the Petroleum Industry

Oswaldo A. Pedrosa Jr.

www.onip.org.br

Governmental Agencies

Governmental Agencies

Oil &Gas CompaniesOil &Gas CompaniesSuppliers of Goods

and Services

Suppliers of Goods

and Services

Mission

Maximize the local content for the supply of goods and services in the Brazilian Oil & Gas Sector:

- based on competitive cooperation and

- assuring full and fair opportunities for the local suppliers.

Strategic Objectives

Create and maintain a favorable environment for new investments and operations in the Brazilian Oil & Gas Sector.

Strengthen and enhance the local industry capacity by encouraging new investments either by Brazilian and foreign companies.

Promote cost reduction in the Brazilian Oil & Gas Industry.

Contribute to increase the competitiveness of the Brazilian suppliers in all segments related to the petroleum industry.

Interaction of local suppliers with oil companies Forum for discussionsVendors ListPartnerships

OBJECTIVES x ACTIONS

Favorable environment for new investments and

operations

Strengthening and enhancement of local

industry capacity

Cost reduction in the Brazilian oil & gas

sector

Increase in competitiveness of Brazilian suppliers

• Fiscal Legislation REPETRO

• Financing Alternatives

• Technology Capability

OBJECTIVES x ACTIONS

Universities and Technical Institutions

Petroleum Industry

E&P

Refining

Transportation

Distribution

Governmental Agencies

Supply Chain of Goods and Services

Financial Institutions

The Oil and Gas Cluster

Environmental Protection

Health and safety assurance

Social and economic development

Technological innovation

Key objective: Promote Sustainable Development

The Oil and Gas Cluster

Main challenges to increase the competitiveness of the Cluster

Create a favorable environment for new investments and operations in the Petroleum Industry.

Strengthen and enhance the local industry capacity.

The Oil and Gas Cluster

The Oil & Gas Sector has to be competitive internationally

Attractive resources base upstream

Internal market opportunities downstream

Adequate fiscal regime

Stable and transparent rules

Reduce uncertainties better risk management

E&P Companies in Brazil

Petrobras` Investments Plan

Non-Petrobras Investments Forecast 2003 – 2007 = US$ 6,4 billion

COMPARATIVE ADVANTAGES FOR BUYING LOCALLY

Easy access of products and services

Use of local currency

Ease of after-sales services

Fast substitution of spare-parts

Use of local language

Simplified logistics

Reliability in delivery time

Technical Capability

Experience in engineering design and product development.

Human resources availability for operation, engineering and management.

Incentive programs for R&D.

Supply Chain of Goods and Services

Local Industry Capability

Well Established Local Industry

Experience in manufacturing products and serving the oil and gas sector

Supply Chain of Goods and Services

Offshore Yards

• Yards capable of performing the complete set of offshore construction, assembly, and load-out

• Yards supporting the existing maritime operations

Setal/Fels-Setal Angra dos Reis, Niterói, Macaé, RJ Mauá-Jurong Niterói, RJ

Ultratec Niterói e Macaé, RJInepar Macaé, RJOdebrecht Macaé, RJ e Pontal do Sul, PRTechint Macaé, RJEBE/MPE Macaé, RJABB Macaé, RJ e Camaçari, BA

Local Industry Capability

Local Industry Capability

• Engineering Design

• Construction and Assembly

• Equipment Manufacturing

• Instrumentation and Control

• Technical Services

Modules for Offshore Top Side

Facilities

INDUSTRIAL ENGINEERING AND ASSEMBLY

No. of Firms

Employed Personnel

Industrial Engineering 16 8000 a 8500

Heavy Civil Construction and

Assembly4

45.000 a 50.000

Civil / Industrial Construction

710.000 a 11.000

Manufacturing 411.000 a 12.000

Industrial Assembly 3950.000 a 55.000

EQUIPMENTS FOR OFFSHORE PRODUCTION UNITS

Wet Christimas Tree

BOP and Control Unit

Local Industry Capability

Processing Pumps

Water Injection Pumps

Control Valves

EQUIPMENTS FOR OFFSHORE PRODUCTION UNITS

Local Industry Capability

Building up Competitiveness

• Price

• Delivery Time

• Quality

• Technology

• Human Resources

• Fiscal Regime

• Financing Availability

Conclusion

The development of the Supply Chain of Goods and Services is essential for creating a competitive Oil & Gas Cluster in Brazil

Main Focus:

Eliminate taxation overburden

Reduce the cost of capital for the local suppliers

Promote technological innovation within the local industry

Intensify human resources programs for qualifying professionals required by the local industry