Oil comeback attracts foreigners – Brazil

The oil and gas sector in Brazil has been attracting new players. Companies from countries such as the United States, Netherlands, Switzerland, Denmark, France and China are settling in the country and, mainly, partnering with national companies with a view to resuming the activity of the oil industry. This movement began to gain momentum last year and promises to grow in coming years, according to experts. Even Petrobras has already noticed this trend. According to the company, at least 37 new foreign companies have already qualified as suppliers, of which 11 are still in the process of qualification.

The interest is in the area of ​​services, responsible for the construction and assembly of equipment. The appetite is aimed at occupying the space formerly occupied by names such as Odebrecht, Queiroz Galvão, OAS and Engevix – some of the 18 companies that are prohibited from signing new contracts with Petrobras for involvement in irregularities revealed by Lava Jato investigations. EY Consultancy data indicate that 65% of the 51 oil and gas mergers and acquisitions operations in the country in the last three years have involved foreigners.

With the big companies out of the game, Petrobras itself started to chase after new suppliers. The result was a 15% increase in the registered companies base at the end of 2017, for a total of 7,300. Of this total, 900 are foreign. According to data from the company, there has also been progress in the number of small companies registered, which rose from 1,300 to 1,500 between 2016 and 2017.

According to Eberaldo de Almeida Neto, executive manager of Petrobras’ Supply of Goods and Services, the company began to seek greater interaction with the market, which, by its calculations, increased its competitiveness by 10% per year, reducing costs.

– With the interim lock, there was room for new opportunities. Some of the people who were unemployed began to occupy themselves. These foreign firms, which enter the service sector, bring knowledge and capital to invest, in addition to setting up a structure in Brazil. It is very common for these companies to join, or to acquire a national company, and set up a construction site, hiring Brazilians to do the services of construction and assembly – exemplified Eberaldo.

One such case involves the Brazilian Safecon, which assembles and supplies scaffolding, in addition to developing projects in the area of ​​engineering. With a unit in Duque de Caxias and about 70 employees, the company has just sealed a joint venture with the Dutch Scafom-rux, one of the largest scaffolding manufacturers in the world. According to Manoel Assumpção Junior, commercial director, the union between the two companies will increase competitiveness in the market:

-The joint venture with Scafom will raise our competition level in the market. The initial plan is to double the service capacity within two years. For Scafom, it is also a very important strategic step since, although it has a global presence, it was not active in Brazil. Our expectation is to intensify demand throughout the year with the activities of Petrobras.

According to Claudio Makarovsky, president of Abespetro, which brings together service companies, the recovery of the sector in Brazil, with the increase in the price of oil for the $ 70 per barrel, is attracting these companies from abroad.

– As Brazil has many rules and is a bureaucratic country, these foreigners are joining to have faster access to Petrobras, since registration is a complex process. This also helps to get funding faster here – said Makarovsky.

The greater demand of foreigners is also felt in the Industrial Park Bellavista in Macaé. According to Leonardo Dias, director of the space, there are now negotiations with five companies from abroad, being three European, one Asian and one American.

– The year 2018 started in a positive way. We have received surveys of some companies, including those that have not yet been active in the oil sector in Brazil, “said Dias, noting that nine foreign companies are now installed and three are in the pipeline.

PRICE RECOVERY

According to Viktor Andrade, partner in mergers and acquisitions at the Energy and Natural Resources Center of EY, with the reduction of Petrobras orders after Lava-Jato, some Brazilian companies have collapsed financially. Now there is a reorganization of the chain. Petrobras data endorse Andrade’s assessment. According to Petrobras, there were 1,100 foreign contractors in 2014, which dropped to 500 in 2016 and remained at the same level last year:

– Within the reorganization of the supplier sector, service companies in Brazil need the capital from abroad to rebuild.

According to Rodrigo Mattos, executive director of Alvarez & Marsal, Brazil is experiencing a positive movement in the oil and gas sector. According to him, the potential for pre-salt reserves, more attractive rules for exploration, new rules of local content and the improvement of international oil prices have made oil companies from abroad increase their investments in the country. With this, he said, they also end up bringing their suppliers:

– We have noticed a strong movement of associations and acquisitions of local companies by foreigners to accelerate their process of installation and hiring of labor. Many of these Brazilian companies are going through or undergoing restructuring because of the crisis generated by the reduction of Petrobras’ investments.

Petrobras simplifies rules to have more suppliers and reduce costs

In 2017, Petrobras was able to save R$ 750 million with the change in bidding process.

As a way to attract more companies to its supplier base and cut costs, Petrobras has sought to improve bureaucratic processes, to simplify standards and streamline procedures. According to Eberaldo de Almeida Neto, Petrobras’ executive manager of the Supply of Goods and Services, the company has been working to adapt itself to the industry standard. In 2017, the company achieved a reduction of R$ 750 million in expenses with this type of initiative. Adding renegotiations of contracts with suppliers, the economy reached R$ 3.5 billion last year.

– We are adopting new strategies. The idea is to make sense for Petrobras and the supplier. But everything is done very cautiously, within the technical standards. We are also reducing the time for the analysis of bids, and bureaucratizing the projects. Thus, from the conception of a bidding up to the signing of the contract, which took 540 days, we expect to reach 300 days until the middle of the year, “said Eberaldo.

An example of the initiative is the total number of consultations made by Petrobras with suppliers: there were more than 400 requests for information in 2017, a rise of 50% compared to 2016.

STRATEGIC PARTNERSHIPS

All phases of the bidding process will occur electronically. That is, there will be no more paper.

“The goal is for everything to be traceable. To see the process, you will need to log in to the system and everything will be registered. That will give more security, “said the executive.

According to Claudio Makarovsky, president of Abespetro, the change in Petrobras is positive. In the sector, he said, the state-owned company is known as “the largest bureaucracy breeder in the world.” He cited the case of a contract for chartering a platform, which fell from a total of one thousand to one hundred pages.

– The processes are being simplified. Petrobras is adapting itself to the market so that any company can take care of it. When creating a project with unique characteristics, the value of the contract becomes more expensive, because the supplier puts the exclusivity in the price. The move will help the company reduce costs, “Makarovsky said.

Experts also point out that reducing costs is essential for Petrobras to be able to put all the billion dollar projects in the pre-salt area on its feet. An example, analysts point out, involves the strategic alliances that the state company has been doing with several companies. In the case of the alliance with France’s Total, transactions of US $ 2.2 billion have already been signed, as well as the US $ 2.9 billion agreed with the Norwegian Statoil. ExxonMobil and CNPC are on the list of partners.

– The alliances that Petrobras have made are due to economic necessity, it does not have the box to do everything by itself. Petrobras has lost a lot of resources with cases of corruption and works that cost a lot more than they should, “said Viktor Andrade, a merger and acquisition partner at EY Energy Center.

According to the manager of Petroleum, Gas and Naval of the Firjan System, Karine Fragoso, six production systems must be contracted this year, which can generate investment of US$ 28 billion and 700 thousand jobs:

– After the Lava-Jato and the falling oil price, the scenario is improving, with a new dynamic. (Bruno Rosa and Ramona Ordoñez)

Source: O GLOBO – RJ

Author: BRUNO ROSA AND RAMONA ORDOÑEZ