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The National Organization of the Petroleum Industry (ONIP) Presentation to the UK Delegation Rio de Janeiro March 11th, 2013

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The National Organization of the Petroleum Industry

(ONIP)

Presentation to the UK Delegation

Rio de Janeiro March 11th, 2013

PETROBRAS – Monopoly system

Constitutional Amendment – End of monopoly

National Petroleum Agency (ANP) –

regulator 10 bidding rounds

Petroleum Law

Institutional Framework

ONIP – support to local development

. . . . . . . . . 1953 1995 1997 1998 1999 2008

Mission

3

TO CONTRIBUTE TO THE INCREASE OF THE

COMPETITIVENESS AND SUSTAINABILITY OF THE

NATIONAL INDUSTRY, TO MAXIMIZE THE LOCAL

CONTENT, EMPLOYMENT GENERATION AND INCOME IN

THE OIL AND GAS SECTOR.

ONIP Associates/Members

ONIP - Organização Nacional da Indústria do Petróleo

SISTEMA NACIONAL DA INDÚSTRIA

INDUSTRY

FEDERAL GOVERNMENT

OPERATORS

STATE GOVERNMENT

1

ONIP Activities (1)

5

LOCAL CONTENT MANAGEMENT SYSTEM

• Local Content Measurement of Projects

• Plataforms (P51; P52; P53; P54; P-55; P56; P-57; P-

59; P-60; P-58; P-62;P-61; P-63; P66-73cascos;

PRA1; PMXL1)

• Refining / Terminals: Caraguatatuba, Cacimbas,

UTGSulRecap, Replan, Repar, Rpbc, Regap, Reduc,

Revap, Rlam e Renest

• Local Content Management System -

INSTITUTIONAL

• Regional Offices

• Breakfast with Energy

• PROMINP

• Regulatory Framework

• Interface with ANP

• Associates Support

• CB-50 / ABNT – Executive Secretariat

Brazilian Standards (ISO TC67)

KNOWLEDGMENT

• Competitiveness Agenda

• REPETRO taxation system

SUPPLY CHAIN DEVELOPMENT PROGRAM

ONIP Activities (2)

6

• Suppliers Registration and

Qualification

• ONIP Supplier Registry System

• CadFor

• Navipeças Registry System

• Business Rounds (“one-to-one”)

• Specific Seminars

• Thematic Road Maps

• Innovation

• Mature Technologies

• Technology Transfer

• R&D&I

• Platec – Technological Platforms

• Prototype Labs

• International Competitiveness

Increase

• Prointer O&G (Sebrae)

• Navipeças

• FPSO

• Drilling Rigs

• Onshore

O&G Investments

Scenarios 1.

Investments - Infrastructure and O&G

2011-2014

8 Fonte: BNDES. Visão do Desenvolvimento nº 100 abril2011

Total: US$ 550 billion

Oil Sector: 38%

Oil and Gas

Electricity

Telecommunications

Sanitation

Mining and Quarrying

Highways

Eletronics

Petrochemicals

Steel

Automotive

Railroads

Harbors

Paper and Cellulose

9

Petrobras Investment over time * US$ billion

* Total in Brazil

Source: Petrobras.(2011)

3.7 3.8 4.4 5.4 6.7 9.2

12.2

19.9

25.7

32

40.7

33.3

45

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Estimated

10

Brazil - General Overview

• Total projected investments (2012 - 2016) – US$

285 billion

• E&P Investments in Brazil (2012-2016) – US$ 165

billion

• 314 Exploratory Areas (144 onshore ; 170 offshore)

• 78 fields in Production Development Phase (44

onshore ; 34 offshore)

11

Total O&G Investments in Brazil 2012-2016

US$ 285 billion

Petrobras US$ 225 billion

Others US$ 60 billion

79%

21%

Petrobras

Others

Source: Petrobras and IBP.

12

E&P Investments in Brazil 2012-2016

Source: Petrobras and IBP.

US$ 165 billion

Petrobras US$ 132 billion

Others US$ 33 billion

80%

20%

Petrobras

Others

13

Investments in Brazil: Pre-Salt 2012-2016

US$ 89 billion

Petrobras US$ 68 billion

Others US$ 19 billion

79%

21%

Petrobras

Others

Production and Consumption of crude oil (10 major countries - 2011)

14 Source: EIA US Energy Information Administration

World 88.255,82

1 United States 18.949,43 21,5%

2 China 9.810,00 11,1%

3 Japan 4.464,06 5,1%

4 India 3.360,00 3,8%

5 Russia 3.110,00 3,5%

6 Brazil 2.650,00 3,0%

7 Saudi Arabia 2.620,00 3,0%

8 Germany 2.400,14 2,7%

9 Canada 2.289,31 2,6%

10 South Korea 2.230,17 2,5%

Petroleum Consumption

(Thousand Barrels Per Day)

World 87.192,33

1 Saudi Arabia 11.153,02 12,8%

2 Russia 10.228,52 11,7%

3 United States 10.131,55 11,6%

4 China 4.335,69 5,0%

5 Iran 4.234,12 4,9%

6 Canada 3.599,97 4,1%

7 United Arab Emirates 3.087,85 3,5%

8 Mexico 2.959,87 3,4%

9 Brazil 2.686,78 3,1%

10 Kuwait 2.681,89 3,1%

Oil Supply

(Thousand Barrels Per Day)

Operational Legacy 2.

Investments keep industrial units in the country that

constantly use a supply chain for decades ...

16

Fonte: Petrobras

GOIÁS

MINAS GERAIS

SÃO PAULO

ESPÍRITO SANTO

RIO DE JANEIRO

PARANÁ

SANTA CATARINA

SÃO PAULO

RIO DE JANEIRO

CURITIBA

VITÓRIA

FLORIANÓPOLIS 0 100 200

Km

LEGENDA

Poços Testados

Campos de HC

Blocos Exploratórios

Reservatórios Pré-Sal

Charneira

Limite Oeste do SAG Carbonático

Limite Leste do Sal

There will be no difference in developing the pre-salt

and other exploratory frontiers ...

Demand for goods and services in the Offshore sector

will be around $ 400 billion by 2020 Sufficient scale to develop robust supply chain of goods and services locally

18

0,5

2018

30,1

2,3 4,7

2012

22,3

1,7

6,0

2,7 1,0

2010

2,4

2020

33,8

5,0

25,1

1,5

7,5

1,0

2008

0,6

2014

30,3

1,9 5,0

0,5 0,5

2016

33,6

2,1 4,7

Nota: Includes rigs and production units already leased

Fonte: Agenda da Competitividade. ONIP (2010).

Seismic

Drill Rigs

Exploration

UEP Construction

Production Development

Oil Tankers and OSV Construction

CAPEX AND OPEX - E&P OFFSHORE (US$ bi 2009)

Consolidated

Investment

TOTAL EXPENDITURE (CAPEX AND OPEX)

CAPEX CUMULATED

3,8

5,3

6,0

4,2

6,8

4,7

9,5

8,7

14,5

5,3

10,1

10,9

5,7

9,4

7,6

6,0

10,2

9,8

25

30 86

71

155

129 191

231

255

312

324

400 OPEX: US$ 69 bi

Impact over Reserves

Proven Reserves

19 Source: ANP Annual Report 2011 and Petrobras.

Bilh

õe

s d

e b

bl

Tupi, Iara e Guará (Pré-Sal) ~ 13 bi

0

5,000

10,000

15,000

20,000

25,000

30,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

ONIP x Scenario 3.

21

• The pre-salt exploration increased the

demand for FPSO platforms;

• The FPSOs match most platforms used

in the Pre-Salt;

• ONIP studies have identified possible

1000 parts and equipments to be

fabricated in Brazil only in FPSOs;

• MultiFor Program available since

June/2012.

Opportunities

Goods and Services

ONIP MULTIFOR

Program Objectives

22

INCREASE OF THE LOCAL CONTENT

INTENSIFICATION OF LOCAL VALUE ADDED

CONSTRUCTION OF CONCRETE PROJECTS X SUPPLY CHAIN

BOTTLENECK

SUPPLY SOLUTION

ONIP MULTIFOR

Supply Chain Development

23

Competitive Intelligence

Business Solution Center

Project Management

DEMANDS

Approved before the ONIP Deliberative Council on 19/04/2012

ONIP Activities

24

LOCAL CONTENT MANAGEMENT SYSTEM (2011 -2012)

• MORE THAN 5000 ITEMS

INSTITUTIONAL

• Breakfast with Energy ( 1999-2012) : 24

• CB-50 / ABNT – Executive Secretariat

Brazilian Standards (ISO TC67) :

• 2011-2012 : 34 norms

KNOWLEDGMENT

• Competitiveness Agenda :

http://novosite.onip.org.br/wp-

content/uploads/2011/07/English-version-final.pdf

SUPPLY CHAIN DEVELOPMENT PROGRAM

ONIP Activities

25

• Suppliers Registration and Qualification

• ONIP Supplier Registry System

28

315

591 721

943 1157

1381 1561

1812 1979

2176 2421 2325

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

SUPPLY CHAIN DEVELOPMENT PROGRAM

ONIP Activities

26

• Suppliers Registration and Qualification

• CadFor - CADFOR – REGISTRY SYSTEM FOR OPERATORS IN BRAZIL

THE OBJECTIVE IS TO INCREASE THEIR KNOWLEDGE ABOUT LOCAL SUPPLIERS IN SUPPORT OF THE

FULFILLMENT OF LOCAL CONTENT OBLIGATIONS.

SUPPLY CHAIN DEVELOPMENT PROGRAM

ONIP Activities

27

• Suppliers Registration and Qualification

• CadFor

187 246

331

515 573 581

2008 2009 2010 2011 2012 Jan/13

SUPPLY CHAIN DEVELOPMENT PROGRAM

ONIP Activities

28

• Suppliers Registration and Qualification

• Navipeças Registry System

125

327

500

2010 2011 2012

SUPPLY CHAIN DEVELOPMENT PROGRAM

ONIP Activities (2)

29

• Business Rounds

BUSINESS ROUNDS 2011-2012

Place/ Fair Estimation of business in R$: Protection Offshore 2012 R$ 87 million

Rio Oil & Gas 2012 R$ 152 million

Navipeças Rio Grande do Sul R$ 62 million

Navipeças Bahia 2012 R$ 61 million

Santos Offshore 2012 R$ 86 million

Brasil Offshore R$ 170 million

Pernambuco Petroleum Business R$ 992 million

Vitória Oil and Gas R$323 million

Navipeças - Rio de Janeiro R$ 51 million

Total : 1.984 million

SUPPLY CHAIN DEVELOPMENT PROGRAM

ONIP Activities

30

• R&D&I

• Platec – Technological Platforms

• Prototype Labs

• International Competitiveness Increase

• Prointer O&G (Sebrae)

31

SUPPLY CHAIN DEVELOPMENT PROGRAM

ONIP Activities

• R&D&I

• Platec

The Technology Platform Program for the Oil and Gas Industry

was structured to meet the demands for technological

innovation of the oil, gas, and shipbuilding industry. The program

seeks to identify domestic suppliers with potential for

nationalization of goods and services currently imported.

PLATEC - NAVAL EQUIPMENTS

Results

• Identified Equipment: 1876

• Analyzed in 6 workshops: 622

• Identified Projects : 63

• Pontential Projects : 48

• Participants: 381 companies

32

33

PLATEC - NAVAL EQUIPMENTS

• WST 1 - Electronic Navigation Systems and Government - FIERGS

• WST 2 - Propulsion and Power Generation - FIESC

• WST 3 - Superstructure, Accommodations, Accessories Hull and Deck - FIEMG

• WST 4 - Pumps, Valves, Pipes, and Communication Equipment Anchoring and

Mooring - ABIMAQ / SP

• WST 5 - Automation, Control, Utilities, Security and Salvage - REEF

• WST 6 - Safety of Navigation / Operations and Environment - FIRJAN

• WST 7 - Topside Instrumentation and Automation - CIESP - Campinas

PLATEC - NAVAL EQUIPMENTS

Results - Workshops

34

PLATEC - NAVAL EQUIPMENTS

Results - examples

1. LUBE OIL PURIFIERS

• Company Centrifugar - Rio de Janeiro

• Nor-Shipping 2011 fair(Norway)

• Edital FINEP - Pre-Salt

• Development Project with COPPE UFRJ and RBNA RJ

2. FUEL OIL PURIFIERS

• Company Centrifugar - Rio de Janeiro

• Nor-Shipping 2011 fair(Norway)

• Edital FINEP – Pre-Salt

• Development Project with COPPE UFRJ and RBNA RJ

In progress . . .

Goods and Services for:

• FPSO

• Offshore rigs

• Supply Boats and Ship Repair

36

In progress . . .

Goods and Services for:

37

• Subsea infrastructure and

maritime

• Onshore Exploration and

Production

Workshop Platec FPSO

Results

• Theme: Topside Instrumentation and Automation

• AnaIysed items: 78

• Participants: 70

• Identified Projects : 30

• Magnetic flowmeters: ABB, SIEMENS, SMAR, RBNA, IPT

• Software control setting type "PID":DEVICE, CONCERT, CHEMTECH,

MECTRON, RBNA, IPT

• Vibration Monitoring System: ALTUS, DEVICE, CONCERT, RBNA, IPT

• Pontential Projects : 13

38

Workshop PLATEC -Supply Boats

Results

• Theme: Topside Instrumentation and Automation

• Participants: 86

• Identified Projects : 19

• Main gearbox - Main engine

• Main Lube Oil Pump - Main engine

• Rudder angle indicators and transmitters units

• Pontential Projects : 17 39

SUPPLY CHAIN DEVELOPMENT PROGRAM - Prointer O&G (Sebrae)

ONIP Activities

40

Prointer 2011

• OTC / Houston / USA

• ONS / Norway

• Offshore Europe / Aberdeen /

Scotland

• Europort /Rotterdam /Netherland

Prointer 2012

• OTC / Houston / USA

• Spain and Italy

• ONS / Stavanger / Norway

Conclusion 4.

42

Conclusion

ONIP HAS BEEN CONTRIBUTING SIGNIFICANTLY FOR

THE BRAZILIAN INDUSTRY REGARDING O&G VALUE

CHAIN SINCE 1999. THIS CONTRIBUTION HAS BEEN

SUPPORTED BY ROBUST RESULTS, EITHER STRATEGIC,

OR PRACTICAL.

- Do your market research;

- Local content is an important issue, so consider partnerships as a

way to access the Brazilian market;