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Petrobras reinforces opportunities in Brazil for foreign suppliers

26th November 2013

Exploration plays will generate considerable demand for foreign expertise by 2020 despite local content rules, says Petrobras representative

Petrobras reinforces opportunities in Brazil for foreign suppliers
Paulo Alonso, advisor to Petrobras' president on local content

The pre-salt challenges present new technological issues when compared to those that were overcome in the past while exploring the post-salt fields. Hence the opportunity arises to establish supply partnerships, including those that incorporate innovation into the supply chain. In this scenario, there is huge scope for foreign investors, said Paulo Alonso, advisor to Petrobras’ president on local content at OTC Brasil.


While asking for foreign suppliers and designers in the oil and gas production chain in Brazil, Paulo Alonso cited an example. "In 2003, when the current policy was first implemented, exploration and production reached between 49-53 per cent for local content during its operations. Today, we have reached between 55 per cent and 65 per cent, in some cases 73 per cent, with a tendency to increase this share. I suggest that the multinational industry focuses on opportunities contained within, including the increase in demand that the pre-salt will generate by 2020."


According to Paulo Alonso, the local content policy benefits the country by diversifying the local economy, increasing the attractiveness to investors, sustainable economic growth, job creation and increased revenue from taxes. For oil companies, the gains come from reducing operating costs, proximity to suppliers and operators, reducing the dependence on foreign labor, increasing the capacity for suppliers to innovate, reducing logistics cost and the availability of local technical assistance.


Paulo Alonso stressed that attracting foreign investment fits into the Petrobras management policy. He is convinced that the current government policy to stimulate manufacturing items in Brazil for the oil industry is clearly already having an effect. "Within five years, we will have a world-class industrial park, not only able to meet the domestic needs, but also able to take on oil and gas projects anywhere in the world, with competitive and sustainable prices," he said.


The executive cited the christmas tree (equipment installed at the wellhead) as an item that proved that this guidance to attract investment to Brazil is successful. The last certificate issued for this piece of equipment reached 73 per cent national production, he said.


About the process to define the percentage local content in the Libra area, Paulo Alonso explained that the amount was established by the government working closely with Petrobras and institutions representing manufacturers. "We met in Brasília to provide the information that the government needed to establish local content in Libra", Alonso said. "The numbers presented by the government were really supported by Petrobras, operating companies and other institutions that represent the industry in Brazil", he added.

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