Firjan Petroleum Year I • 001 • October 2017
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FIRJAN PETROLEUM YEAR I • 001 • OCTOBER 2017 1 OIL AND GAS MARKET AND REGULATION page 6 INTERVIEW MARKET INNOVATION MARKET BUSINESS BRAZIL DIVERSIFICATION INDUSTRY DOWNSTREAM: OPPORTUNITIES PRE-SALT TO BOOST RESOURCES POTENTIAL FOR IN MATURE PERSPECTIVES NATURAL GAS FOR R,D & I GROWTH FIELDS page 3 page 4 page 10 page 11 page 12 FIRJAN PETROLEUM ARTICLE NEW HORIZONS FOR THE OIL MARKET The world is changing at an impressive rate. Brazil, the participation of national industry while not braking in particular, is developing initiatives and actions in the country’s development. order to improve the business environment. The oil market represents over 30% of Rio de Janeiro We have advanced in the economic field with the state’s GDP. Therefore, it is only natural that the state approval of a cap on government spending and a of Rio take the lead in resuming this segment’s growth. labor law reform. But more is required to improve the country’s competitiveness, approving the social We live a moment of resumption, of rebuilding. security and tax reforms as well. With this, we can And also of developing new business models and sustainably resume economic growth and provide partnerships, of using our productive creativity at its conditions for greater development of our industry. maximum. All for the recovery of an industry which has its heart in Rio. In the oil and gas market the outlook is positive. 2 The barrel price displays an increasingly healthy and We must transform into reality what is still potential – promising recovery. one of the highest, when referring to pre-salt. We must take advantage of Rio’s industrial history, its diversity News from the fiscal front, with the desired and complexity, to develop fruitful partnerships extension of Repetro – special customs regime and participate in the distinct existing production and the perspective of the issue of a Provisional environments – onshore, shallow, deep and ultra-deep Measure, will allow an extension of benefits for waters. suppliers. The expected bidding rounds, which are due this year, are bound to produce successful We have the technical competence and installed results. capacity which deserve to be taken advantage of. Continuing to advance on the development of a But, as in Brazil, additional measures of great business environment is our motivator. It is under such importance are necessary. an assumption that the Sistema FIRJAN will continue to act, together with all market agents, contributing One of them is the regulation of the waiver for local to overcome challenges and reaching the desired content. This requires full attention not to prevent recovery of the oil market. Eduardo Eugenio Gouvêa Vieira President of Sistema FIRJAN FIRJAN PETROLEUM INTERVIEW BRAZIL PRE-SALT PERSPECTIVES Pre-salt, one of the most important discoveries in the Brazilian oil and gas market, remains attractive. The importance of this polygon area was analyzed by the president of Pré-Sal Petróleo S.A. (PPSA), Ibsen Flores Lima. To him, the scenario is positive for continued investments. What is the importance of pre-salt for Brazilian pre-salt exploration and production. The company production? presides the Operational Committee, aside from 3 The pre-salt polygon is among the most important oil monitoring and auditing the execution, operational and natural gas discoveries in recent years. With it, we expenses and capital expenditures of the exploration, significantly increase production in Brazil, envisioning evaluation, production development and actual the possibility of resuming the Brazilian economy’s production. Expenses for recovery cost in oil must growth. It is responsible today for 48.2% of production be approved by the company, which also carries in the country. In the Santos Basin the volume produced out technical and economic analysis of plans and per well of around 21,000 barrels per day, is far above programs to be executed by the consortium. It must the industry average. Nine out of ten wells with largest be emphasized that we act in constant collaboration production in the country are located in that area. To get to take the best decisions, considering that one of an idea of its potential, the daily production in pre-salt our greatest legal obligations is the maximization of grew from 41,000 bpd in 2010 to 1.29 million bpd in July the project’s economic results. This is also the final 2017, according to ANP. Furthermore, it presents a natural objective of all members of the consortium. In other competitive advantage due to the high productivity of words, we all move in the same direction. its wells, as a result of the high quality of its carbonate reservoirs, extensive and bulky productive zones with low What are the expected timelines and demands for exploratory risk. This results in lower investment per unit the industrial sector? of recovered volume. The scenario is very positive and there are good perspectives regarding Brazilian pre-salt. We have What is the role of PPSA in the management of made important advances on the regulatory agenda sharing agreements? and we have a bidding calendar through 2019, with PPSA is responsible for the management of sharing another nine rounds to come, which shall invigorate agreements. Our knowledge and management capacity the market. All of this in an environment of respect to is what will guarantee best results to the Nation regarding contracts and an attractive fiscal regime. FIRJAN PETROLEUM MARKET DIVERSIFICATION TO BOOST NATURAL GAS IN BRAZIL New government initiatives and opening of the market 2017, the integrated network shall expand capacity to to private investors shall generate more dynamism approximately 59 million cubic meters per day in 2026. in the natural gas market in Brazil. A change which “We estimated a growth in national supply, but with a shall move the segment is the approval of a new legal decrease in gas imports from Bolivia”, he explained. 4 framework, stemming from suggestions received in the scope of the Gas To Grow program, of the Ministry of To Fátima Ferreira, Brazilian Chemical Industry Mines and Energy (MME). Proposals being analyzed in Association (Abiquim) director of Economics and + BUSINESS the National Congress include the bill 6407/13, written Statistics, the perspectives for the segment are positive, by federal congressman Antonio Carlos Mendes Thame but it is important that the regulatory framework under + INNOVATION (PV-SP), which aims to increase competition in this construction contemplates market rules so that a fall industry. in gas prices may occur. She points out that for the + COMPETITIVENESS chemical industry, which uses gas as a raw material, According to Giovani Vitória Machado, Brazilian Energy there are processes in which gas corresponds to WITH SISTEMA FIRJAN, Research Company (EPE) - superintendent for Natural 80% of production costs. “There have always been Gas and Biofuels, the creation of an integrated transport transport, production and distribution monopolies. THE OIL AND GAS MARKET system is one of the most significant changes in the But it is important for us to exit this scenario new regulatory framework. “The new law will create because in a monopoly there are no competitive CAN DO MORE. integrated transport, in an entry and exit model, which prices. Our expectation is to have a market for the greatly reduces cost and increases efficiency for gas commercialization of gas,” she declared. PRODUCTS AND SERVICES TO MAKE YOUR Count on our infrastructure transactions,” he said. COMPANY MORE COMPETITIVE. SENAI SENAI SESI • Education, technology and innovation Machado emphasizes that there are concrete ongoing IT IS IMPORTANT THAT THE TECHNOLOGY INSTITUTE FOR INNOVATION changes, such as the privatization of gas distributors • Health, safety and environment INSTITUTES INNOVATION CENTER FOR in states, which can lead to a multiplication of players. REGULATORY FRAMEWORK UNDER • Access to markets and much more IN GREEN OCCUPATIONAL The EPE superintendent highlights that, along with the CONSTRUCTION CONTEMPLATES CHEMISTRY HYGIENE increased number of investors, there shall also be a Learn more at: www.firjan.com.br/oilandgas MARKET RULES SO THAT A FALL IN Become associated to Sistema FIRJAN greater supply of natural gas over the next ten years. Book the SENAI Circuit and have guided tours and take advantage of benefits. With a supply of 43 million cubic meters per day in GAS PRICES MAY OCCUR of our institutes: [email protected] FIRJAN PETROLEUM INFORMING, FORMING, TRANSFORMING. Fátima warns that competition in gas prices is crucial “It is an action which places FIRJAN as the main to stimulate the national chemical industry. “Demand actor and important advocate defending the interests for chemical products increased. But all growth of industrial consumers of natural gas,” stated brought on by this demand is being supplied by the entrepreneur, who is also the president of Rio imports. When compared to the international market, de Janeiro Salt Refinery and Grinding Employer gas reaches Brazilian factories at a cost of US$ 12, Association (Sindisal). whereas in the USA the price to industry averages US$ 3 to US$ 4”, she illustrated. Caetano also considers the break in the monopoly as a hurdle to be overcome for the development of the NATURAL GAS WORKING COMMITTEE segment. “This will allow new players in the creation of The use of natural gas as a raw material is one of a dynamic, competitive, liquid and sustainable natural the themes discussed in the Natural Gas Working gas market.” Committee of FIRJAN Oil and Gas Business Council. The goal is to create an action plan for the segment Renata Cavalcanti, FIRJAN Oil and Gas Business based on suggestions presented by business Council specialist, explains that the working committee representatives. Luiz Césio Caetano, president of the focuses on the Gas To Grow agenda, which shall ease FIRJAN/CIRJ Regional Representation in Eastern Rio, the entry of new players, according to the productive defends that FIRJAN’s initiative presents an important sector’s request.