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Heli bp strategy for a logistic company in brazil


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HeliLogisitc BP Strategy in Brazil

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Heli bp strategy for a logistic company in brazil

  1. 1. Helicopter and Logistic in Offshore Pre-salt Layers <br />HeliLogistic Company Strategy in Brazil<br />
  2. 2. HeliLogistic Strategy in Brazil<br /><ul><li>General Assumptions
  3. 3. Petrobras General Information
  4. 4. Investments – General, Local Content
  5. 5. Opportunities Upstream and Downstream
  6. 6. Petrobras Strategies in E&P
  7. 7. Main Oil and Gas Production Projects
  8. 8. Pre-salt Challenge and Oil & Gas New Frontier
  9. 9. Important Issues to Operate in Brazil
  10. 10. Beginning HeliLogistic Operations in Brazil</li></ul> 3<br /> 4<br /> 7<br />9<br /> 13<br />16<br />18<br />31<br />33<br />
  11. 11. General Assumptions<br />This is a preview for an initial strategic plan for HeliLogistic action focused on oil & gas industry and also intended to provide information on the Brazilian market and opportunities in Oil & Gas industry.<br /><ul><li>To analyze Oil & Gas industry in Brazil, some information are provided to guide possible business assessments, next steps and actions that Helilogistic should take to develop business in Brazil.
  12. 12. Petrobrasis revising its 2020 Strategic Plan and 2010-2014 Investment Plan turning it to a new 2011-2015 Investment Plan considering the the subsalt (Petrobras nominated as pre-salt) discoveries and development, which turns out to be a new challenge that will raise opportunities for the oil & gas industry and for foreign direct investments in Brazil.
  13. 13. Important to say that creativity and some risk management could make a difference for the success in the next years to develop oil & gas business in Brazil.</li></ul>3<br />
  14. 14. Petrobras General Information<br />PETROBRAS HighlightsNet Operating RevenuesUS$118.3 billion)-------------------------------------------------------NET INCOMEUS$18.9 billion-------------------------------------------------------Adjusted EBITDAUS$31.3 billion-------------------------------------------------------Capital ExpenditureUS$29.5 billion-------------------------------------------------------EXPLORATION 70 rigs (43 offshore) -------------------------------------------------------RESERVES (SEC CRITERION) 15billion barrels of oil and gas equivalent (boe SPE) -------------------------------------------------------PRODUCTIVE WELLS 13,000-------------------------------------------------------PRODUCTION PLATFORMS112 (77 fixed; 35 floating) <br />Data referring – 2008<br />-------------------------------------------------------DAILY PRODUCTION 2,400 thousand barrels per day (boe) of oil and gasincluded 420 thousand boe of natural gas-------------------------------------------------------REFINERIES16 -------------------------------------------------------YIELD FROM REFINERIES1,962 million barrels a day -------------------------------------------------------PIPELINES23,142 Km -------------------------------------------------------TANKER FLEET154 (55 belonging to Petrobras) -------------------------------------------------------GAS STATIONS6,000 -------------------------------------------------------FERTILIZERS3 Plants: 235,000 tons of ammonium, 100,000 tons of urea <br />4<br />Source: Petrobras webpage<br />
  15. 15. Market Value – 06 June 2008 (US$ Billion)<br />Eni<br />Total<br />Chevron<br />Shell<br />BP<br />Petrobras<br />Repsol<br />Conoco Philips<br />Exxon Mobil<br />Chevron<br />Shell<br />Total<br />Petrobras<br />Eni<br />BP<br />Exxon Mobil<br />Repsol<br />Conoco Philips<br />Source:Bloomberg<br />5<br />
  16. 16. Publicly Traded Peer Comparison<br />Proven Reserves (SEC – billion boe) – Dec. 2007<br />Oil & Gas Production (million boe) - 2007<br />4º<br />7º<br />Reserve Life (years) – Dec. 2007<br />Refining Capacity (thousand bpd) - 2007<br />2º<br />6º<br />Source: Evaluate Energy and Company Reports(*) Eni – Refining Throughputs instead of Refining Capacity<br />6<br />
  17. 17. Investments - General, Local Content<br />Services and Equipment companies have been increasing its market position and developed business opportunities on O&G.<br />Only E&P represents 53% of Petrobras investments<br />Investment Plan (2011-2015) has expected investments of US$280 Billion, yearly average of US$56 Billion, in a crucial moment when other majors are reducing or maintaining the investments.<br />Investment Breakdown (2010-2014) totalling US$ 224.1 Billion:<br />E&P US$ 118.8 Billion (53%)<br />Downstream (RTC) US$ 73.6 Bn(33%)<br />Petrochemicals US$ 5.1 Bn ( 2%)<br />Gas & Energy US$ 17.8 Bn ( 8%)<br />Corporate US$ 0 2.8 Bn (01%)<br />Retail System US$ 0 2.5 Bn (01%)<br />Biofuel US$ 3.5 Bn ( 2%)<br />65% of the investments is considered as Brazilian content in the total capital spending (95% investments in Brazil, 5% Abroad)<br />Source: Petrobras Business Plan 2010-2014<br />7<br />
  18. 18. 8<br />
  19. 19. SUMMARY OF MAIN EQUIPMENT QUANTITIES UP TO 2015 <br />Opportunities Upstream and Downstream<br />Opportunities for foreign and local companies<br />Business Areas Items Unit Total Amount (2008 to 2015<br /> Christmas Trees un 3,658<br /> Pumps un 4,673<br /> Wellheads un 3,658<br /> Towers un 150<br />UPSTREAM Heat Exchangers un 1,904<br /> Conduction Pipes t 375,529<br /> Flexible Pipes km 4,906<br /> Turbines un 128<br />Umbilicals km 2,577<br />Gas & Energy Conduction Pipes t 33,742<br /> Pumps un 2,377<br /> Boilers un 18<br /> Furnaces un 82<br /> Reformer Furnaces un 14<br />DOWNSTREAM Reactors un 159<br /> Towers un 331<br />Heat Exchanger un 1,742<br /> Conduction Pipes t 142,351<br /> Turbines un 107<br />Source: 2020 Petrobras Strategic & Business Plan (not considering pre-salt investments)<br />9<br />
  20. 20. CRITICAL EQUIPMENT<br />Critical Equipment and Services<br />Opportunities for foreign companies<br />E&P (not considering pre-salt investments)<br /><ul><li> Production pipelines alloy coatings (13 Cr, Super 13 Cr)
  21. 21. Turbo compressors (6-10 MW)
  22. 22. Polyester Mooring cables
  23. 23. Mooring systems
  24. 24. Drilling pipelines
  25. 25. Fiber glass pipelines
  26. 26. Electrical cables for CSP
  27. 27. Control systems for well control, oil & gas metering systems, drilling activities
  28. 28. Offshore drilling rigs
  29. 29. Gravel packing
  30. 30. Drilling bits
  31. 31. Steam generators (25-50 x 106 BTU/d)
  32. 32. Special submarine valves </li></ul>REFINING<br /><ul><li> HCC Reactors (250-300mm wall width, 200 Kgf/cm2)
  33. 33. Boiler works with special alloys (reactors, towers, pressure vessels)
  34. 34. Boilers (steam generators)
  35. 35. Heat exchangers working with H2S traces (ASTM A387 degree 11)
  36. 36. API pumps
  37. 37. Structural packing for refining process towers</li></ul>10<br />Source: 2020 Petrobras Strategic & Business Plan<br />10<br />
  38. 38. CRITICAL SERVICES – OPPORTUNITIES FOR FOREIGN SUPPLIERS<br />E&P<br />Opportunities for foreign companies<br /><ul><li> Drilling
  39. 39. Workover services
  40. 40. Flexible lines and umbilicals laying services
  41. 41. Support for diving
  42. 42. Support for ROV´s
  43. 43. Support to mooring activities
  44. 44. Special Vessels
  45. 45. Submarine interconnection services</li></ul>REFINING<br /><ul><li> Basic Design
  46. 46. Thermal Projects Design</li></ul>11<br />Source: 2020 Petrobras Strategic & Business Plan<br />11<br />
  47. 47. Opportunities for foreign and local companies<br />Conclusions on 2020 Petrobras Strategic & Business Plan<br /><ul><li>Opportunities...</li></ul> ... for Manufacturers, Distributors, Retailers in supply of equipment, chemicals, spare parts, etc.<br />... for Service providers in services supply of seismic, drilling, transport, etc.<br /> ... for EPC companies, Shipyards, Constructors for platforms, refineries, revamps, etc.<br /><ul><li>Revising of2010-2014 Investment Plan (new2011-2015) will consider the newsubsaltfrontier and to cope with the international crisis – increasingopportunitiesfor companiesthat could offer packages and project finance – as an example of infrastructure tie-in FDI´s.
  48. 48. Opportunities will be focused on critical goods and services no available in a competitive basis in local market
  49. 49. Foreign suppliers must be aware of the specific laws framework and local content requirements – here are another opportunity as incentives could be arranged once the intention to manufacture in Brazil is assured.
  50. 50. Partnerships with local supplier operating in the same business area should be considered</li></ul>12<br />Source: 2020 Petrobras Strategic & Business Plan<br />12<br />
  51. 51. Petrobras Strategies in E&P<br />Technological edge and differentiate services to be offered will allow HeliLogistic to be part of Petrobras E&P Strategy. Collaboration with R&D is key<br /><ul><li>Increase production and reserves
  52. 52. Strenghtehn expertise in deep</li></ul> and ultra-deep waters;<br /><ul><li>Perform on-shore and in shallow water fields focusing </li></ul> on profitable opportunities;<br /><ul><li>Implement practices and new technologies in areas</li></ul> with high exploitation degree in order to optimize <br /> recovery factor;<br /><ul><li>Develop exploratory efforts in new </li></ul> frontiers in order to assure a <br /> sustainable reserve/production ratio.<br /><ul><li>Perform with operational excellence </li></ul> and social and environmental responsibility<br />13<br />
  53. 53. New frontier: Pre-salt<br />Big challenge & investments <br />Initial <br />Pre-salt new frontier in Santos Basin<br />Source: 2020 Petrobras Strategic Plan - Rio Oil & Gas Conference, October, 2008<br />14<br />
  54. 54. Offshore and onshore market: New O&G companies arriving in Brazil, new business opportunities <br />Source: ANP “The role of ANP in an ever more competitive market”, Brazil Source: Source: ANP - Energy and Power International Conference, Houston<br />15<br />
  55. 55. Main Oil & Gas Production Projects<br />Thousand bpd<br />Tupi not included in the production<br />Cidade Niteroi FPSO<br />100,000bpd<br />Tupi<br />EWT<br />30,000bpd<br />Marlin Sul Mod3 – P-56<br />100,000bpd<br />Espadarte<br />Mod3<br />100,000bpd<br />Tupi<br />Pilot<br />100,000bpd<br />Marlin Sul Mod2<br />P-51<br />180,000bpd<br />Piranema FPSO<br />30,000bpd <br />Frade<br />100,000bpd<br />Cidade Vitoria FPSO<br />Golfinho Mod 2<br />100,000bpd<br />Marlin Leste<br />P-53<br />180,000bpd<br />Jubarte<br />P-57<br />180,000bpd<br />Roncador Mod4 P-54<br />100,000bpd<br />Cachalote<br />Baleia Branca<br />FPSO Capixaba<br />100,000bpd<br />Roncador<br />P-52<br />180,000bpd <br />Parque das Conchas<br />100,000bpd<br />Roncador<br />P-54 FPSO<br />180,000bpd<br />Source: 2020 Petrobras Strategic Plan - Rio Oil & Gas Conference, October, 2008<br />16<br />
  56. 56. Main Gas Production Projects in Brazil <br />Tupi not included in the production<br />Million m3/day<br />Peroá Phase 2<br />Pirapitanga<br />Mexilhão<br />Urucu <br />Manati<br />Canapu<br />FPSO <br />Cidade Santos (Uruguá/ Tambaú)<br />Rio de Janeiro<br />Espadarte <br />Mod II<br />FPSO<br />São Mateus<br />Camarupim)<br />Espadarte<br />Module 3<br />Marlim Sul<br />Module 3 - P-56<br />Frade<br />Roncador<br />P-52<br />Roncador<br />Module 4 P-62<br />FPSO Espírito Santo (Conchas)<br />Tupi<br />Pilot<br />Lagosta<br />Jubarte<br />P-57<br />FPSO<br />Cidade Niterói<br />Jabuti<br />Cachalote<br />and Baleia Franca<br />FPSO Capixaba<br />Marlim Sul<br />Module 2<br />P-51<br />Roncador<br />P-54<br />2007<br />Associated Gas<br />Non Associated Gas<br />Associated gas<br />Marlim Leste<br />P-53<br />Non associated gas<br />17<br />Source: 2020 Petrobras Strategic Plan - Rio Oil & Gas Conference, October, 2008<br />
  57. 57. Pre-salt Challenge and Oil & Gas New Frontiers<br />800km<br />New Discoveries and fields in operation<br />Oil fields<br />Gas Fields<br />Source: TN Petroleo Magazine, Nov2008<br />18<br />
  58. 58. ThePre-salt: March 2006: Afterdrilling for oneyearandthreemonthsatanexcessivecostof US$240 million (usual costs in Campos Basin is in theorderof US$18 million), Petrobras foundgas traces in Parati fieldat 7,600 m deep. Thisdiscoverygavemotivation for anotherdrilling in the RJS-628A welllatelycalled Tupi field (BM-S-11), located in Santos Basin, 300km fromthecoast.<br />In August 2006 Petrobras confirmed proved reserves of 3 billion barrels in Tupi field. Considering Tupi area Petrobras estimates 8 billion boe and another drillings in sequence rise the estimation up to 100 billion boe.<br />Blocks discovered so far: Parati (BM-S-10), Tupi and Iara (BM-S-11), Bem-te-vi (BM-S-8), Carioca and Guara (BM-S-9), Caramba (BM-S-21), Jupiter (BM-S-24) and two discoveries in the Campos Basin located in Baleias Park (Caxareu and Pirambu).<br />This discoveries will change the face of oil & gas business in Brazil as the Federal Government is preparing to intervene with new controls for the subsalt and to create another Government company to handle the new subsalt reserves.<br />19<br />
  59. 59. Amongthechallenges Petrobras andBrazilianGovernmentwill face to turnpre-saltdiscoveriesa reality wecan cite:<br /><ul><li>This is a newgeologicalparadigmwithgiganticfieldsandlarge volume ofaccumulations
  60. 60. Thelevelofinvestments is proporcional to theamountofoilresources, thusgivinglevelof US$ 600 billion for a volume of 50 billionbarrelsat a costof a barrelbelowthe marginal costofexpansionoftheindustry
  61. 61. Technologicalinnovationswillbethekeyvariable to determine investmentsrequired (drillingtechnology, production systems, monetizing natural gas)
  62. 62. Potentialevolutionofproduction to 5.5 millionbpd (3.8 from Petrobras and 1.7 fromcompanieshavingparticipation in thepre-saltcluster)</li></ul>Keyissues for investments in pre-salt<br /><ul><li> Petrobras investmentcapacity (important role andopportunity for internationalcompanies)
  63. 63. Sector regulationqualityandinstitutionalarrangementcredibility
  64. 64. Fiscal system atractiveness</li></ul>20<br />
  65. 65. Tupi Pilot Production and Development TimelineThe new investment plan (2009-2013) will turn official investment horizons for the subsalt<br />Investments horizon for pre-salt<br />1st Long duration test Tupi<br />1stTupi pilot oil<br />New technologies application<br />2007<br />2009<br />2010<br />2012<br />2017<br />2020<br />2011<br />Opportunities<br />Source: Petrobras, Nov2008<br />21<br />
  66. 66. 22<br />
  67. 67. 23<br />
  68. 68. 24<br />
  69. 69. 25<br />
  70. 70. 30 RIGS CONTRACTED PLUS 28 TO BE LEASED UP TO 2018, MAKING A TOTAL OF 58 DRILLING RIGS: 23 being delivered between 2009 and 2011; 9 will be chartered via international bidding, being delivered in 2012; 28 will be built in Brazil, being delivered between 2013 and 2018<br />FIRST 2 FPSO´s TO BE CHARTERED (2013-2014) and ADDITIONAL 8 FPSOS (2015-2016)<br />26<br />
  71. 71. Petrobrasiniciates second phase in Santos Basin<br />By closing the first cycle in the Santos Basin, which included the production fields in the post-salt, deployment and operation of the infrastructure in the pre-salt and the start of commissioning of gas, Petrobras will invest now in the areas of offshore support to coordinate the logistics between the mainland and platforms. According to general manager of the Unit Operations of Exploration and Production in the Santos Basin, José LuizMarcusso will be two new logistic bases - one in Itaguaí (RJ) and another in the Santos Air Base, located in the city of Guaruja (SP ) on the shores of the port of Santos. This new stage will attract suppliers of Petrobras for the future around the logistics base. So far, multinationals such as Halliburton retained a core group of executives focused on customer relationships in offices that opened in BS, especially in the wake of discoveries in the subsalt. "Some already exploring areas near the airbase, but most waits for the completion of the study being conducted by Petrobras," says Marcusso. Currently, sending supplies by sea to 17 rigs and production systems at seven of the Santos Basin occurs from the city of Macaé (RJ) and Itajai (SC). Air transport, designed to carry people and small parts are made from Jacarepagua (RJ), Mariners (SC) and Itanagar (SP). But the start of commercial production of oil and gas in the pre-salt initiates a new phase of impressive numbers, which would require boosting the performance of all areas. "It will be a very big jump over the decade. In 2020, even without considering the onerous assignment, the current strategic plan has operated points total production of 1.8 million barrels per day Saints, or the portion of Petrobras in the range of 1.100 million, "says Marcusso. In some blocks, the company operates with partners. By the end of the year operated production in the Santos Basin will be 130 thousand barrels per day, that volume will increase gradually, and should reach 1 million barrels per day in 2017. In terms of comparison, the Campos Basin, a major producer, today provides between 1.6 million and 1.7 million barrels a day. <br />27<br />
  72. 72. 28<br />
  73. 73. Important Issues to Operate in Brazil<br /><ul><li>Position in Brazilian market</li></ul>It is quite important to pinpoint HeliLogisticposition in the market and analyze all opportunities that could arise: from new contracts to business opportunities like joint ventures, M&A or other creative FDI’s ties. How HeliLogisticwill stand on the competition (cooperation between companies, exchange of contracts, subcontracts, etc.)<br /><ul><li>Opportunities and strategies that will speed up the operations</li></ul>Strains or critical paths on Petrobras actions are opening opportunities for newcomers to supply services or technological collaboration for specific projects. Plansal– Investment Plan for pre-salt development with the first bids for at least 10 FPSO’s will create new opportunities for operations and logistic.<br />29<br />
  74. 74. Important issues to Operate in Brazil<br /><ul><li>Improve relationship with Petrobras, oil & gas segment and construction industry in Brazil</li></ul>Research and Development Center (Petrobras CENPES) have several programs under development extending technological edges and frontiers, as an example the studies to create intermediary logistic platforms. HeliLogistic should take a look on cooperation opportunities. Being in origin of new projects it is a good strategy and benefit the future contracts and specifications (bids with similar spec’s)<br /><ul><li>Dealing with stakeholders to be better positioned in Petrobras new investments and projects</li></ul>Governmental agencies, Federal and States governments, Chambers of Commerce, Industrial and Aeronautical Associations are key to keep HeliLogistic profile presented and to be known as new presence in the market.<br />30<br />
  75. 75. Beginning HeliLogistic Operations in Brazil<br />Considering the market conditions and the correct timing, the official presence of HeliLogistic in Brazil should follow some guidelines:<br />Integrating HeliLogistic<br />How the organization will be structured, understanding IT, business and communicating systems and necessities, financial, budget and general HeliLogistic procedures.<br />Hiring and integrating team work, defining milestones, daily business activities and routines.<br />31<br />
  76. 76. Beginning HeliLogisticoperations in Brazil<br />Establishing business (1 year)<br />Establish the business plan and dimension the budget for the operation in Brazil, build the initial team (expertise and profile according to company procedures), general resources, planning for bid’s proposals and actions, general strategy.<br />Corporation market conditions in Brazil (Benchmark and Market share).<br />General operation and risk management, size up the business, strengthness and weakness.<br />Take advantage of opportunities in other countries that could be practiced in Brazilian operations.<br />Revise defined milestones, personnel analysis for the team according to provided status and general corporation procedures.<br />32<br />
  77. 77. Beginning HeliLogisticoperations in Brazil<br />Attending the established business and strategic program.<br />Team work organization and interaction with corporation staff in order to organize and to be introduced to current business.<br />Manage troubleshooting and urgent matters on business.<br />Improve relationship with the market and rapport to transmit the better understanding of business singularies in Brazil, Petrobras structure and energy sector.<br />Study Possible joint ventures and due diligence for acquisitions within Brazilian Market.<br />Strategic presence on Chambers of Commerce (USA, UK, Canada, France), Industry Associations, Trade Fairs and Conferences.<br />33<br />
  78. 78. Beginning HeliLogisticoperations in Brazil<br />As HeliLogistic turns official the appointment of a Country Manager in Brazil, one important duty will be to detach the presence of HeliLogistic in Brazil.<br /> Visits to Brasilia, Rio de Janeiro and Sao Paulo to make an official announcement that HeliLogistic will be investing in Brazil in projects beginning with oil & gas segment is key.<br />Taking all the legal procedures to incorporate and import the new helicopters to Brazil already prepared for offshore operations.<br />34<br />
  79. 79. Acknowledgments<br />The market and data information are from selected presentations and author network information's<br />Comments are based on general ideas from the author<br />Information sources:<br />Petrobras<br />Petrobras 2020 Strategic Plan<br />Petrobras Investment Plan 2010-2014<br />ANP – National Petroleum Agency<br />Ministry of Mining and Energy Thank you!<br />35<br />