Good results for the Dutch soccer team which scored three times against Estonia on Friday (22nd), followed by another positive outcome for Apex.
The trade promotion agency attracted Dutch investors of the Oil&Gas sector to explain why Brazil is the place to be, after the presentation the group had dinner and watched the match. “The event has a nice concept, I like the way Brazilians take time to get to know each other, it is not just a short business event as usual”, Amanda Mackintosh, Marketing Manager at Bayards. Apex-Brasil works aligned with the investment plan of the government whose goal is to diminish the industrial gap, mainly in the technological sector.
“I like the networking, to get in touch, to see Apex promoting Brazil which is automatically related to great football”, said Sieneke Hopmans, International Sales Offshore Energy at Navingo. Brazil became the third larger world Foreign Direct Investment receptor, counting for 5% of the global FDI, in 2012.
Alexandre Petry explained that the next steps for the Brazilian energy sector is to negotiate three bidding rounds and two concessions, mainly regarded to the oil reserve known as Pre-Salt. The government requires to be partner of the operator, therefore the state-run oil company Petrobras will operate with a minimum of 30% participation in all foreigners’ projects, with impressive investments of US$ 325 billion up to 2020. The 11th bidding round will take place in May and its main focus is on the Brazilian Equatorial Margin and on mature onshore field exploration located in the Southeast, North and Northeast of Brazil. In the end of 2013, the 12th Round will focus on unconventional gas. Petrobras will be involved in all new block operators, investing in all waters.
The Agency emphasized that its main asset is the network within all levels of political institutions working together with the companies to find the best locations. According to the Promotion Manager of Holland Marine Equipments, Arne Heutink,“the contact with Apex is interesting, for they can help with the Brazilian legislation, which is not easy”. To start a company in Brazil a foreign investor has to hire a lawyer to be the representative, the company receives an ID known as CNPJ which gives the rights to get the same rules as all other Brazilian companies. Apex has no limitations such as company size, but the aim is technology implementation in Brazil. “We give to all the same attention”, says Petry.
Petry showed a map of the current Oil & Gas exploration production zones, clusters, ports, ship yards, pre-salt area and research centers across Brazil. “It is important to analyze the whole model to see what makes more sense. There is a concentration of 85% on Sao Paulo and Rio de Janeiro, putting pressure on demand for employment and on the prices of land, but new areas in the South and North are rising. Southeast of Brazil is more developed, but other areas give fiscal incentives”, reports Petry. There are mainly four clusters: North (Paraíba-Pernambuco basins); Espirito Santo Basins; Rio-Sao Paulo (Taubaté); and Pelotas (Rio Grande do Sul e Santa Catarina). There is no reason to doubt that an investment in Brazil could easily be extended to South-America, since there are many regional agreements, making it easier to export to countries that are one of the biggest Oil & Gas markets.
Local content policy
Alexandre Petry observes that investors are usually sceptical about the local content law that imposes the commitment to a certain level of national production. During his presentation, Petry showed technological challenge lists of items such as construction of ships, seismic exploration and evaluation, production development, construction of drilling units and construction of production units. Petrobras has identified a long list of equipments required up to 2017 which has potential for national development. Including but not limited to these equipments: offshore cranes, vacuum sewage system, life boats, valves, fitting and piping injection units, production units for demand analysis, pumps, compressors, vessels, platforms, rigs Hull, tubing, tanks, special alloys.
The Apex representative faced and answered critical questions from an audience that was not so convinced of the local content law, since it is so easy to play with numbers and measures, mainly in services sector. There are a lot of discussions between companies and politicians to lower the level, but the government goal to increase the industry sector has to remain. If quality is not good enough, a re-negotiation process can be started. It is a matter of finding balance.
The Holland Marine Equipments has an office in Rio de Janeiro which attends the need for offshore ships, but the Export Manager of HME, Sandra Mollema, explained that Korea and Singapore normally build cheaper ships for Brazil, but she was glad to see Brazil searching for contact with Dutch companies. The representative of IRO (Association of Dutch Suppliers in the Oil and Gas Industry), Ruud Liem, was familiar with all the guest’s company, since IRO has 425 members and “part of them plans investments in Brazil”.
The guests were interested in receiving the Apex’s presentation slides with the lists and maps of the Brazilian situation. “It was a very successful evening, Dutch companies are focused on offshore marine and have lots of experiences. If the foreigner investor follows the rules and be patient with the process, he will succeed”, concludes Petry.