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Global Oil & Gas Market Update Roadshow!
Brazil Oil and Gas on the way up – What canNORWEP do to support partners
Adhemar Freire, Brazil Country [email protected]
Scandic Kristiansand Bystranda | 6 September 2017
Agenda
1. Country overview2. E&P overview3. Policies in place and impact on business4. Coming bid rounds5. Opportunities6. How NORWEP can support our partners7. Final Remarks
www.norwep.com
Country Overview
Country outlook - challenges
• Deep prolongued economic recession• Challenging fiscal imbalance• Political turmoil• Corruption scandal “lava jato” (car wash operation)• High unemployment rate• Complex legal and regulatory framework• Complex tax regime• Logistics challenges• Low oil price• Geopolitical risks
Country outlook - opportunities Lower inflation and interest rate (SELIC) Pre-salt fields production Petrobras turnaround Petrobras divestment plan Adjustments in legislation 9 bidding rounds scheduled (2017/2018/2019) Permanent offer of exploration areas Local content adjusted Program Gas para crescer “Gas to grow”
E&P Overview
Country E&P overview• Oi Production : 2.5 Mbpd• Gas Production: 101 Mm3/d• Reserves: Oil 12.7 Bbbl / Gas 378 Bm3
• Economic groups in E&P activities: 95• Foreign Companies: 48• Sedimentary Basins: 29• Exploratory Blocks: 311• Fields: 443• Wells: ~30.000• Offshore Production Platforms: 143
Country E&P overview – Oil Production
Country overview – Pre-salt
Source: ANP
Drastic Reduction in Activity
5 years without licensing bidding rounds
Policies in place and impact on business
National Policies in PlaceUpstream• E&P National Policy • Onshore E&P Policy (Reate) – revitalization program • Transfer of Rights Renegotiation• Local Content Policy • Tax Regime Renewal (Repetro)• 2017‐2019 Bidding Rounds • Unitization Agreements• Petrobras’ Right of First Refusal (Pre‐salt Operatorship)
Midstream• “Gas para Crescer” program (Gas to grow) o
Framework improvements with impact on business
Local Content review
New policy for the 14th bidding round and following
For previous round - negotiations on going (Public hearing)
Coming bid rounds
Bidding rounds already scheduled
2018 2019
Concession Bidding Rounds
Production Sharing Bidding Rounds
14th: 27 September
15th: May
16th: Q3
2nd and 3rd: 27 October
4th: May
5th: Q3
2017
14th Bidding Round (Concession)
• Scheduled for Sept, 27 ‐ 2017• 32 Oil Companies registered and approved to bid• 287 Exploratory Blocks• 11 Sedimentary Basins
5 Offshore6 Onshore
• Lower local content percentage• Opportunities for new comers as operators (Exxon, e.g.)
Production Sharing Contract bidding round - Pre-salt
• Carcará – estimated in place volumes: 2,2 Bbbl (exploration phase)• Gato do Mato (exploration phase)• Sapinhoá (in production: 25.000 bbld• Tartaruga Verde (under development; first oil in 2017)
Areas to be unitized
New areas• Alto de Cabo Frio Oeste• Alto de Cabo Frio Central• Pau Brasil – unrisked in place volumes: 4.1 Bbbl• Peroba – unrisked in place volumes: 5.3 Bbbl
Opportunities
Several impediments to foreign investments lifted – Offshore market to grow by 3% p.a.
Source: Rystad Energy research and analysis
1
Offshore market in Brazil 2012-2021USD billion
0
5
10
15
20
25
30
35
40
45
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
OperationsWellSubseaEPC and Topside EquipmentReservoir and Seismic
Number of wells expected to double towards 2021 driven by exploration activity
2
0
30
60
90
120
150
180
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Exploration
Wet
Dry
Offshore wells in Brazil 2012-2021Number of wells
Green and mature fields opportunities
Several opportunities in the OPEX
Source: Petrobras
Petrobras Business Plan – 19 new Production Units
Source: Petrobras Strategic Business and Management Plan 2017‐2021
Mb/
d
Producers Other Operators2017
O&G Companies Operating in Brazil
How NORWEP can support our partners
Deliveries
Assist companies to explore opportunities with Petrobras – Strategic andPlanning
On going Seminar on Decommissioning and Late Maintenance ofOffshore assets in operation – Nov 6th
On going Network meeting with Statoil Supply Chain area – End ofOctober
FPSO for Sepia and Libra – we are working to promote partnerscapabilities to the chartering company to be contracted – in Houstonand Singapore
Assist companies with market assessment Under evaluation for 1H 2018 – Seminar on Digital Solutions
Final Remarks
Conclusions Companies must value the short term perspective but also the medium
and long term Local content rules must be analyzed on each specific situation and local
services and after sales must be considered in the Business Plan It has been developed a framework in order to create a better business
environment, with more transparency and predictability Risk management is still something to care, however you may get inspired
by foreign companies which have succeed in the Brazilian market Confidence in excess may be a mistake, but pessimism will not bring you
to the business Brazil is the biggest offshore market in the years to come
norwep.com
Adhemar Freire, Brazil Country [email protected] | 6 Sept 2017