Tuesday, 29 May 2018
Large oil companies are buying in Brazil equipment for projects of weight abroad and in relevant quantities. Among the clients are the Norwegian Equinor (which was called Statoil until last week), the American ExxonMobil and the Italian Eni, just to name a few.
Exports come after companies faced a difficult period, when falling oil prices pushed oil companies to postpone projects. The scenario was worse in Brazil, with the Petrobras crisis provoked by Lava-Jato that led the sector to an almost shutdown. Now, even the exchange rate, with the devaluation of the real, is helping to make the Brazilian equipment more competitive, as Idarilho Nascimento, commercial director of Tenaris observed. But a counterpoint must be made. Nascimento cites as a disadvantage the labor, energy and tax costs.
Equinor has purchased Brazilian equipment for large projects in the North Sea. Netzsch Brasil has provided centrifugal pumps for the gigantic project of Johan Sverdrup; WEG sold electric motors to the Troll 2 and 3 fields, and Aker Solution produced underwater equipment for the Johan Castberg and Troll fields on the Norwegian continental shelf.
From Tenaris to Equinor bought connectors facilities for drilling wells. “This means that projects in Norway are creating jobs in Brazil and this will continue. Based on the local content rule in Brazil, we are buying from Brazilian companies, but there are also many interfaces with Brazilian suppliers for our business outside Brazil,” said the president of Equinor in Brazil, Anders Opedal, citing projects in Canada and Tanzania and Norway.
ExxonMobil acquired in Brazil some equipment for the development of the first phase of the giant project Liza, in Guyana, of which it is operator. It is estimated that the block has 3.2 billion barrels of recoverable oil equivalent including four other prospects in the block. The US company is the operator and holds a 45% stake, with Hess Guyana Exploration (30%) and China’s CNOOC Nexen Petroleum Guyana (25%) as partners.
The company has contracted 17 Christmas trees and five manifolds that will be built by TechnipFMC in Brazil. They will be installed in phase 1 of the production development project. ExxonMobil said in a statement that it “continues to seek globally competitive suppliers for its projects.”
Aker’s contract with Equinor, of $ 100 million, is to supply an underwater control system for the Troll field. Aker’s president in Brazil, Maria Peralta, explains that the order increased the factory’s occupation in Paraná, but the unit still works with idle capacity. “The entry of the contract into the North Sea will allow a stabilization in the area of control systems, which is a specific department, we will increase production in a specific department in manufacturing, but we are still not working at maximum capacity,” explains Maria .
Aker, which is Norwegian, invested R $ 260 million in Brazil to build a factory and a technology center in São José dos Pinhais, Paraná. The executive explains that the plant is planned to produce up to six wet Christmas trees monthly – which control the flow of oil and gas and are installed next to the well on the seabed – operating in three shifts. But according to her, it is still operating with only two shifts.
The country has always been competitive and has led the way in the production of goods and services for deepwater
In addition to the connectors sold to Equinor, Tenaris has secured a contract to supply gas pipelines that will export to Egypt for the gas found in the Zohr field operated by Eni Spa and where it made the biggest discovery in the Mediterranean Sea in many years . Zohr has estimated reserves of 30 trillion cubic feet (TCF) of gas, which will be taken ashore with pipes made from acid-resistant material produced at the company’s plant in Pindamonhangaba (SP). The plant investment was over $ 370 million in technological modernization. The first delivery of the 230-kilometer pipeline was made in April. Another 215 kilometers of piping began to be manufactured for delivery by the end of the year. The Tenaris contract is for the delivery of 900 kilometers of pipes, the most complex of which will be exported from Brazil and the rest of the units in Mexico and Italy.
Nascimento of Tenaris says that by the end of 2012 and early 2013 the company saw that the sector was in a sharper recession than in the rest of the world where the activity suffered from the fall in the price of oil. The decision was to focus on the international market, exporting pipes for projects in the North Sea or countries like Angola, Ghana, Azerbaijan, Bolivia, Argentina, Trinidad and Tobago, China, Colombia and Mexico. “The crisis has greatly reduced the oil and gas operation and the investments of operators around the world. Oil reached $ 35 and is now in the range of $ 80, which is making investments come back with companies resuming projects, “he says.
Tenaris’s profit in 2017 was $ 536.39 million, a rebound from the more modest 2016 earnings of $ 58.7 million, which reversed the loss recorded in 2015. Despite a 23% increase in revenue, the company kept operating at expenses practically stable.
The director of Tenaris highlights as a positive factor the opening of the Brazilian market to other companies operated in the pre-salt. This, he said, has made room for suppliers installed in Brazil to have other clients besides Petrobras, which was the sole pre-salt operator by law. “This brings more opportunities and changes in the scenario because part of the investments will now be executed by other players,” says Nascimento, who expects the resumption of orders for projects in Brazil between 2019 and 2020.
Another Brazilian company with a large portfolio of international clients, WEG sees the wave of exports. The company established in Santa Catarina in 1961, has factories in 12 countries and sales in five continents. WEG’s oil and gas manager, Elder Stringari, says Equinor’s requests were important and began four years ago in Brazil. In 2015, the Brazilian company provided equipment for the Peregrino field. “From there we started supplying to the North Sea, along with other clients that the company has acquired abroad. They helped WEG to go through this difficult period in the Brazilian market,” he says.
With revenues of R $ 9.5 billion in 2017, WEG provided engines capable of generating from 4 megawatts (MW) to 11 MW used for water injection in the wells or gas compression on the platforms. The engines were sold not only to Equinor projects in Norway, but also to Shell in the United Kingdom, Chevron in the United States, and state-owned companies such as Algerian Sonatrach, Petronas Malaysian and Saudi Aramco, among others.
In the United States, where WEG has a plant, the engines are used by companies that provide hydraulic fracturing services for the production of unconventional (shale) oil and gas. On exports, Stringari states that WEG is not a newcomer to the market. “The internationalization began a long time ago. The development of the oil and gas business went naturally along with internationalization,” he explains.
According to Márcio Félix Bezerra, the executive secretary of the Ministry of Mines and Energy, the oil companies are acquiring equipment in Brazil because the country has always been competitive and has been the leader in the production of goods and services for deep waters. “The exports show the competitiveness of the goods produced in the country, and the presence of other operators has opened the opportunity for supply to the whole world. Companies will know the quality of Brazilian suppliers and see that it is cheaper here,” says Bezerra. expects greater warming from 2020.