Brazil Subsea Industry Overview and Opportunities Subsea UK Webinar – 02 July 2020 Flavia Silva de Castro BDM Oil & Gas Brazil
Agenda – DIT – Who we are & How we can help UK companies in Brazil – Overview of the Oil&Gas sector – Oil&Gas and Subsea industries current scenario – Opportunities – Market Intelligence – Decommissioning – Offshore Wind – DIT Activities – Final Remarks 2
Who we are The Department for International Trade (DIT) helps UK businesses export and grow into global markets. We also help overseas companies locate and grow in the UK. We are present in over 100 countries throughout the world. Based in Rio, Brazil Based in UK DIT Brazil Energy Team Natasha Daniella & Carneiro Greg O&G Renewables 3
What we do – Help businesses sell overseas – contact a Trade Adviser in your area – Assist with Export Finance – Foster business and partnership opportunities – Improve market access – Provide Government-to-Government collaboration How we can help you in Brazil * • country and sector advice • local market research • assistance during a market visit • identification of possible business partners • preparation for exhibitions and events • access to activities such as market visit opportunities/Trade Missions, meet-the-buyer events and networking receptions. *Depending on the level of assistance required it may consist on a chargeable service 4
Brazil – Country overview ➢ GDP: USD 1,868,626.09 (World Bank 2019) Recife ➢ Population: 212,038,807 (2020) ➢ Energy consumption: +2,3% in 2020 ➢ Largest Oil & Gas Producer in Latin America ➢ Oil & Gas sector = 11% GDP Brasília ➢ Electricity from Renewables: 82% ➢ Largest Power market in Latin America - Belo Horizonte installed capacity of 164 GW. São Paulo ➢ Regional leader in wind power, directly supplying 75 million ppl Rio de Janeiro HM Gov / DIT 5
Fundamentals of the Oil & Gas in Brazil Source: ANP 6
Oil & Gas Business Environment – End of sole operator status for Petrobras in Pre-Salt areas – Petrobras divestments, especially in Mature Fields, are attracting new players (Trident Energy, Perenco, etc) – Less bureaucratic and protectionist local content regulation – Petrobras Procurement – new process from June 2018 www.petronect.com.br – Opportunities with other IOCs and NOCs 7
Source: ANP 8
Current Scenario – Petrobras – • Revised portfolio expected for September 2020. Before crisis, expected investment in the region of US$75 billion between 2020-2024, with US$ 64 billion in pre-salt and ultra deepwater projects in post-salt. • Focus on deep and ultra-deep water • Looking for operation efficiency and to increase the recovey factor – Shell – • Capex reduction not to affect projects in Brazil • Consolidated protfolio in Brazil with projects on diferente phases • 23 operated assets / 15 in participation • JV with Mitsubishi and Pátria for Marlim Azul thermal power plant in Macaé – Equinor – • Keeping the timetable of projects in Brazil, especially in the Bacalhau field and phase 2 of Peregrino development • First oil expected for mid 2024, with 11 wells connected to a large FPSO • Peregrino phase 2 expected for the last quarter of 2020 with 3 fixed platforms 9
Current Scenario - Subsea – Offshore projects remain important – Renegotiation of contracts with big suppliers – IOCs keeping major projects, pre-salt, revising less strategic ones, looking with caution – Mero, Buzios, Bacalhau, Gato do Mato – likely not to be affected – Independent oil companies – revisiting strategies – Lapa seems to be in revision by Total – Subsea package for Mero 3 ongoing, proposals due this week – EPCI for Mero 2 had proposals delivered but no definition 10
O&G Production Ranking by Operator Petrobras – 3,548,169 boe/d 1. Shell Brasil – 58,058 boe/d 2. Total E&P do Brasil – 34,287 boe/d 3. Enauta Energia – 31,039 boe/d 4. PetroRio Jaguar – 20,688 boe/d 5. Equinor Brasil – 12,600 boe/d 6. Source: ANP April 2020 11
FPSOs in Brazil 12
FPSOs in Brazil (projects may be under revision) – Brazil accounts with 1/3 of the global orders (US$98.9 billion - according to EMA) in the next 5 years (2020-24) – Petrobras biz plan foresees 13 new FPSOs in operation in this period: • P-70 – 2020 – Atapu field • Mero 1 (Guanabara) and Sépia (Carioca) – 2021 • Marlim 1 (Anita Garibandi), Buzios 5 (Almirante Barroso) and Lula Oeste – 2022 • Parque das Baleias, Mero 2 (Sepetiba) and Marlim 2 (Ana Neri) – 2023 • Buzios 6, Mero 3, Sergipe-Alagoas (SEAP) and Itapu – 2024 – Enauta – Atlanta field – 2022 – Equinor – Carcará/Bacalhau field – 2023/24 – Shell – Gato do Mato – 2024 MODEC, SBM, YINSON 13
Petrobras ´ FPSO Schedule Projects may be under revision. Petrobras is expected to announce a new business plan soon. Year operation expected to start Source: Petrobras 14
Opportunities – Enhancing Recovery 15
Opportunities – Subsea (part 1) • Simulators for ROV operations in shallow water, using data as real as possible. • Supplier of data and numeric models for ROVs and crawlers • AUVs for shallow water • Sea chest in non-metalic material (composites for example) • Diverless spools for riser connections • Internal cutting tools (laser or high pressure water jet) for jacket legs, for decommissioning • Subsea monitoring systems - Sensors permanently installed for measurement applications 16
Opportunities – Subsea (part 2) • Underwater wireless data transmission • Subsea integrity management and systems, for flexible pipes for example, but limited to it. • Technology to allow the retrieval of flexible lines with reduced cost, decommissioning • Technology for the plugging of flexible risers, decommissioning • Technology for cutting flexible pipelines, decommissioning • Technology for the treatment of NORM, decommissioning • Technology for cutting rigid pipelines, decommissioning 17
Recent Contracts & Opportunities (Market Intelligence) • Petrobras planning 3D/4D streamer multizamute seismic in the Marlim, Albacora and Voador fields. 2,17 k km2 expected for August with Polarcus Serviços Geofísicos do Brasil. • Petrobras renewed contract with DOF/Norskan for 3 AHTS, 2 for two years and 1 for one year. The vessels are equipped with ROVs for 3,000 m water depth operations. • Petrobras signed contract with Solstad for the charter of 2 AHTS for two years, starting expected in September. ROVs for 3,000 water depth. • In March, NOV Flexibles signed contract with Petrobras to supply 137 km of flexible pipes, services and reels, for production and water injection. 4 year contract . • In March, the companies Farol and Finarge Apoio Marítimo won bid from Petrobras for 1 DSV (for subsea intervention, saturated dive/300m and ROV) and 1 AHTS-TS, respectively. • OneSubsea awarded PLEM and UTA for Marlim and Voador fields Revitalisation Project, from Petrobras. 18
Decommissioning Outlook Source: ANP 19
Decommissioning Outlook – New resolution published in April 2020 • Investment forecast 2020-2024 in the region of US$5.2 billion – 20 decommissioning programmes approved by ANP – Decom of Cação awarded to Consoria Piauí-Alabama. Source: ANP 20
Decommissioning - Challenges – Technology – Logistics and Infrastructure • Life extension • Vessels (PSVs, Heavy Lifts, etc) • Structural reliability • Waste management • Environmental monitoring • NORM detection and management • Cutting tools • Shipyards and ports • RD&I Source: ANP 21
Offshore Wind in Brazil – Roadmap identified potential across the whole country – > further studies are needed around economics; – 5 applications of environment licenses – > three of them from Iberdrola; – UK-BR working group to share regulation and industrial strategy; – Prosperity Fund Energy Programme; – First development are expected to start in 5-10 years. 22
̶ Clean Growth Petrobras • Ongoing R&D on Wind and Solar – long term • Efficient & Low Cost Refining – digital transformation and AI • Improve Logistics • Pre-Salt World-class Assets - Exploratory risk reduction - Development time reduction - Industrial automation: increased security & efficiency – Shell • Raizen - Biofuel plant in São Paulo with Cosan • Seeking authorization from BR Gov for 13 photovoltaic plants in Minas Gerais – Equinor • Solar plant in NE Brazil, 2018 23
Future DIT Activities – vEEC, Aberdeen – September – 2020 – Subsea Expo, Aberdeen – February 2021 – UK&BR Partners in Energy, Rio de Janeiro – March 2021 – Rio Oil & Gas 2020, Rio de Janeiro – October 2021 – Keep an eye on our webinars! 24
Final Remarks • Brazil considered the largest offshore market in terms of opportunity • The fundamentals are good and attracting investors • Diverse environments such as onshore, offshore, mature fields, decommissioning, downstream, • Petrobras ´ divestments allowing the diversification of players • Development of an open, competitive and dynamic market • Opportunities: ✓ Maximising recovery (EOR/IOR) ✓ Life extension of subsea equipment and offshore assets ✓ Innovative and cost saving solutions for SURF, Subsea equipment and EPCI ✓ Improve production in mature fields ✓ Decommissioning 25
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