Local Content and Maritime Demands for Equipment and...

Local Content and Maritime Demands for

Equipment and Services in the Horizon 2018-2030:

Ronaldo M.L. Martins

Petrobras Procurement Department

Market Development, Manager

Undocking of P-66’s hull in Rio Grande Shipyard, the first hull for Pre-Salt fully built in Brazil

Brazil, 13th Aug 2014

Agenda

Brazilian Local Content Regulation and Requirements for Libra

PETROBRAS’ Local Content Policy

Offshore and Maritime Equipment Demand

Final Remarks




Agenda

Final Remarks

Brazilian Local Content Regulation Local Content Requirement

Obs 1 – Logistic Support

Obs 2 – Drilling + Completion

Obs 3 – Auxiliary System

Exploratory Phase

Subsystem Item Minimum Local

Content item (%)

Minimum LC–

Exploratory Phase (%)

Operational Support Logistic Support (Sea/Air/Base) (obs. 1) 50

37

Geology and Geophysics Seismic Acquisition 5

Interpretation and Processing 85

Drilling, Evaluation and Completion

Drilling Rig 29

Drilling + Completion (obs. 2) 45

Auxiliary System (obs. 3) 54

Extended Well Test (EWT) 15

Sub-items Exploration Phase (%)

Flight Support 50

Offshore/Maritime Support 50

Onshore/ Land Support 80


Drilling Bit 5

Wellhead 60

Production Column 24

Well Equipment 50

Casing 73


Field Instrumentation 40

Automation System 60

Flow Measurement System 60

Telecommunications System 40

Electrical System 70

Local Content Requirements for Libra Exploratory Phase

Local Content Requirements for Libra Production Development Phase

Development Phase (DP) - modules with first oil up to 2021

Subsystem Item Minimum Item Local

Content (MLC) (%)

MLC -Development

Phase modules (%)

Drilling,

Assessment

and

Completion

Drilling Rig 50

55

Logistic Support (Maritime/air/Base (obs 1) 50

Christmas Tree 70

Drilling + Completion (obs 2) 37

Auxiliary Systems (obs 3) 58

Production

Collection

System

Flowlines Flexibles 40

Rigids 80

Basic Engineering 90

Detailed Engineering 90

Management, Construction and Assembly 34

Flexible Production/Injection Lines (Flowlines, Risers) 56

Rigid Production/Injection Lines 50

Manifolds 70

Underwater Control System 20

Umbilicals 55

SPU

Hull



Management 90

Construction and Assembly 75

Comissioning 90

Equipment and Materials 40

Naval Systems 50

Materials 80

Plants (obs 5)



Management 90


Comissioning 90

Equipment and Materials (obs 5.1) 57

Materials 80

Modules Integration

and Instalation



Management 80


Naval Systems 10

Comissioning 75

Materials 75

Anchoring

Pre-Installation and Hook-up of Anchoring

Lines 40

Multiple Anchoring Systems 85

Obs 1 - Logistic Support

Subsystem DP up to 2021

Maritime Support 50

Air Support 50

Base Support 80

Obs 2 - Drilling + Completion


Drill 5

Wellhead 60

Production Tube 32

Well equipment 50

Casing 73 Obs 3 - Auxiliary Systems




Fiscal Measurement

System 60

Telecommunication

System 40

Electric System 70

Obs 5.1 - Equipments and Materials

Equipment MLC (%)

Boiler

Forges 80

Tanks 83

Pressure Vessels 70


Static

Equipment

Filters 80

Cathodic Protection 90

Flare System 14

Valves (Up to 24") 58

Rotary

Equipment

Pumps 70

Rotary Equipment - Alternative Compressors 70

Rotary Equipment - Rotary Screw Air Compressors 70

Rotary Equipment - Diesel Engines (up to 6 HP) 65

Rotary Equipment - Gas Turbines 35

Rotary Equipment - Steam Turbines 80


Fiscal Measurement System 60

Telecommunication System 40

Electric System 70

Process Towers 75

Cooling Towers 85

Heat Exchangers 50




Agenda

Final Remarks

PETROBRAS' Local Content Policy

The projects and acquisitions for Petrobras must support the

challenges of Company’s Strategic Plan and therefore maximize local

content based on competitive and sustainable basis, accelerating the

development of markets where it operates, guided by ethics and

generating continued innovation.

December 22nd, 2011


PETROBRAS’ Local Content Policy Drivers

Ensure adherence to capital discipline, assuring the competitiveness of

procurement and reducing financial and logistical risks in implementation and

operation of projects.

Capital

Discipline

Execute procurement in a coordinated manner for the items of common use. Integration of

Supply

Uniform criteria for measuring and requiring local content in Petrobras

acquisitions.

Local Content

Standardization in

Petrobras

Encourage the development of local markets in a sustainable manner. Local Suppliers

Prioritize supplies with local engineering development. National

Engineering

Encourage the development of the local market to overcome technology gaps. Technology

Gaps

DR

IVE

RS

PETROBRAS’ Local Content Policy Local Content Requirements

Minimum Local Content requirement for financing concession (BNDES)

Local content requirements

established in oil field concession contracts

There is no Local Content requirement

Oil Company declares target and proves rate achieved

Petrobras Local Content Policy determines that all business areas must achieve

minimum local content on its activities (capital and operational expenditure)

Upstream Refining Gas & Power

Local content requirements set by Petrobras according to the list of goods and services demanded by capital projects and local industry capacity to provide them

ANP with O&G Operators Petrobras with Suppliers

Co

ntr

atu

al O

blig

atio

n




Agenda

Final Remarks

Example of potential equipment

for national development

Source: BMP 2014-18; Petrobras

36 Chemical Injection Units

36 Offshore Cranes

12 Vacuum Sewage System

24 Offloading System

48 Life Boats + Davit

84,000 Manual Operated Valves

24,000 ton of Piping

19,200 ton of Fittings

Production Units Fleet increase by 2030

ND: Not defined * Charted Production Unit ** Integrated in Brazil with imported Hull or Modules

Abroad/Brazil ** Brazil To be contracted

Construction Site

Operation Startup Timeline of Petrobras Production Units

Equipment demand for

12 Production Units of

Libra to be delivered

between 2020 and 2030

2014 2015 2016 2017 2018 2019 2020 //

2030

Production Units Concept for the Libra standard FPSO

The concept for the Libra standard FPSO is still under

evaluation, but most likely it will not deviate significantly

from a typical Pre-salt FPSO shown below.

Demand for the 12 Production Units of Libra to be delivered between 2020 and 2030

Production Units - Libra Main demands for equipment – Topside

Source: Petrobras

Package/Skid Demand (Units)

Vapor Recovery Unit 24

Gas Dehydration Unit 12

Vacuum Deaerator Unit 12

Chemical Injection Unit 36

H2S Removal Unit 12

Nitrogen Generator Unit 12

Sulphate Removal Unit 12

Electrostatic Treaters Package 12

Produced Water Treatment 12

Flare Gas Recovery Compression Unit 12

Flare 12

Fresh Water Maker 12

Shell&Tubes Heat Exchange Package 12

Plate Heat Exchangers Package 12

Pressure Vessels / Separators Packages 12

Centrifugal Pumps Package 12

Sea Water Lift Pumps Package 12


Water Injection Pumps Package 12

Well Service Pump Package 12

Reciprocating Pumps Package 12

Positive Displacement Pumps Package 12

Filters Package 12

Pig Launchers & Receivers Package 12

Mechanical Handling Equipment Package 12

Icss – Integrated Control & Safety System 12

Hydraulic Power Unit - Hpu 12

Fiscal Metering Skid 12

Electrical And Automation Module 12

Hvac System 12

Exportation Gas Compression Unit 12

CO2 Compression Unit 12

Main Gas Compressor 12

Injection Gas Compression Unit 12

Main Turbogenerator Unit 12

Production Units - Libra Main demands for equipment – Loose Equipment

Source: Petrobras

1120 of 288 compressors are activated by turbine

Equipment Demand (units)

Compressor 312

Pressure Vessel (Scrubber/Separator/K.O.Drum) 744

Tank 324

Control Panel (Distribution Panel) 996

Pumps 1,248

Hydrocyclones / Gas Flotation 84

Filter 264

Shell&Tubes Heat Exchanger 564

Plate Heat Exchanger 216

Mechanical Handling Equipment 1,272

Oil Dehydrator / Pre-Oil Dehydrator 24

Oil Dehydrator Degasser / Pre-Oil Dehydrator Degasser 24

Pig Launchers & Receivers 288

Control, Shutdown, Choke, Pressure Safety, Deluge Valves 9,600

Manual Valves (Un) 84,000

Piping (Ton) 24,000

Fitting (Ton) 19,200

Cable (Electrical/Instrumentation/Telecom) (Km) 6,000

Instrumentation (Transmitter/Gauge/Indicator) (Un) 24,000


Production Units - Libra Main equipment demand – Hull


Offshore Crane Api-2C (50T) 36

Aluminium Helideck 12

Lifeboat & Davit 48

Rescue Boat & Davit 48

Foam Firefighting System 12

CO2 Firefighting System 12

Inert Gas System 12

Sewage Treatment & Vacuum Unit 12

Auxiliary & Emergency Diesel Generator 24

Diesel Fire Water Pump 24

Ballast Pumps 48

Cooling Water Pumps 24

Fresh Water Generator 24

Portable Water Generator 24


Fire Detection System 12

Environmental & Positioning System 12

Navigation Aid System 12

Offloading System 24

Mooring System 48

Pull-In / Pull-Out System 12

Submerged Cargo Pumps 168

Submerged Deballast Pumps 72

Control Valves System (Un) 2.400

Helicopter Refueling System 12

Diesel Purifier 12

VAC System 12

Accommodation Package 12

Automation & Electric Package 12


Source: Petrobras

Example of potential equipment


171 Chemical Injection Units

171 Offshore Cranes

57 Vacuum Sewage System

114 Offloading System

228 Life Boats + Davit

399,000 Manual Operated Valves

114,000 ton of Piping

91,200 ton of Fittings

Equipment demand not

yet addressed for 57

Production Units to be

delivered by 2030

Production Units Fleet increase by 2030

Production Units considered for the equipment demand analysis

Operation Startup Timeline for Petrobras Production Units

Source: BMP 2014-18; Petrobras ND: Not defined * Charted Production Unit ** Integrated in Brazil with imported Hull or Modules

Abroad/Brazil ** Brazil To be contracted

Construction Site

2014 2015 2016 2017 2018 2019 2020 //

2030

+41 additional units

2021-2030

11 - Libra field

30 - Overlay of transfer

of rights and other

BIDs

Demand for the 57 Production Units to be delivered between 2018 and 2030

Production Units Main demands for equipment – Topside

Source: BMP 2014-18; Sinaval


Vapor Recovery Unit 114

Gas Dehydration Unit 57

Vacuum Deaerator Unit 57

Chemical Injection Unit 171

H2S Removal Unit 57

Nitrogen Generator Unit 57

Sulphate Removal Unit 57

Electrostatic Treaters Package 57

Produced Water Treatment 57

Flare Gas Recovery Compression Unit 57

Flare 57

Fresh Water Maker 57

Shell&Tubes Heat Exchange Package 57

Plate Heat Exchangers Package 57

Pressure Vessels / Separators Packages 57

Centrifugal Pumps Package 57

Sea Water Lift Pumps Package 57


Water Injection Pumps Package 57

Well Service Pump Package 57

Reciprocating Pumps Package 57

Positive Displacement Pumps Package 57

Filters Package 57

Pig Launchers & Receivers Package 57

Mechanical Handling Equipment Package 57

ICSS – Integrated Control & Safety System 57

Hydraulic Power Unit - HPU 57

Fiscal Metering Skid 57

Electrical And Automation Module 57

Hvac System 57

Exportation Gas Compression Unit 57

CO2 Compression Unit 57

Main Gas Compressor 57

Injection Gas Compression Unit 57

Main Turbogenerator Unit 57

Production Units Main demands for equipment – Loose Equipment



1120 of 890 compressors are activated by turbine (Libra)

Equipment Demand (Units)

Compressor 8901

Pressure Vessel (Scrubber/Separator/K.O.Drum) 3.534

Tank 1539

Control Panel (Distribution Panel) 4.731

Pumps 5.928

Hydrocyclones / Gas Flotation 399

Filter 1254

Shell &Tube Heat Exchanger 2.679

Plate Heat Exchanger 1026

Mechanical Handling Equipment 6.042

Oil Dehydrator / Pre-Oil Dehydrator 114

Oil Dehydrator Degasser / Pre-Oil Dehydrator Degasser 114

Pig Launchers & Receivers 1368

Control, Shutdown, Choke, Pressure Safety, Deluge Valves 45.600

Manual Valves (Un) 399.000

Piping (Ton) 114.000

Fitting (Ton) 91.200

Cable (Electrical/Instrumentation/Telecom) (Km) 28.500

Instrumentation (Transmitter/Gauge/Indicator) (Un) 114.000

Production Units Main equipment demand – Hull




Offshore Crane Api-2C (50T) 171

Aluminium Helideck 57

Lifeboat & Davit 228

Rescue Boat & Davit 228

Foam Firefighting System 57

CO2 Firefighting System 57

Inert Gas System 57

Sewage Treatment & Vacuum Unit 57

Auxiliary & Emergency Diesel Generator 114

Diesel Fire Water Pump 114

Ballast Pumps 228

Cooling Water Pumps 114

Fresh Water Generator 114

Potable Water Generator 114


Fire Detection System 57

Environmental & Positioning System 57

Navigation Aid System 57

Offloading System 114

Mooring System 228

Pull-In / Pull-Out System 57

Submerged Cargo Pumps 798

Submerged Deballast Pumps 342

Control Valves System (Un) 11.400

Helicopter Refueling System 57

Diesel Purifier 57

Vacuum System 57

Accommodation Package 57

Automation & Electric Package 57

Example of equipment with potential


21 Derrick Structure

21 Traveling equipment

21 Choke and Kill Manifold

21 sets of Risers

21 BOP (partial)

21 sets Electrical System

126 Main Diesel Generators (partial)

21 Emergency generators

63 Deck Cranes

126 Azimuthal Thrusters

2,037 Pumps

630 HVAC System

21 Accommodation

Drilling Rigs Fleet increase by 2020

Equipment demand not yet

addressed for the 21 drilling

rigs to be delivered by 2020

Source: Petrobras; Sinaval

Drilling rigs considered for the equipment demand analysis

Petrobras Drilling Rigs Startup Timeline

+6

+4

+6

+3

+8

+1

2014 2015 2016 2017 2018 2019 2020

Abroad/Brazil **

Construction Site

2

3

1

Aerial view Rio Grande shipyard ERG1 – RS (dec/13).

(1) Portico with 600 tons capacity (2) Portico with 600 tons capacity ; (3) Patio slabs of Ecovix; (4) FPSO Replicante P-66 blocs of hull

4

Rio Grande Shipyard (ERG 1) - RS • 8 Hull Constructions (“Replicantes” )

Local Content: 70%

2

Rio Grande Shipyard ERG1 – RS (April/14)

(1) P-66 final hull construction activities at quay – the first hull for Pre-Salt fully built in Brazil – 70% Local content;

(2) P-67 hull construction on dry dock: integration of mega blocks built in China;

(3) P-67 and P-69 mega blocks built in Rio Grande

Rio Grande Shipyard (ERG 1) - RS

• 8 Hull Constructions (“Replicantes” )

Local Content: 70% 1

3

3

Rio Grande Shipyard (ERG 2) - RS

Works' Aerial View of Rio Grande 2 Shipyard (ERG2) – RS (06/08/13).

Construction work of the Estaleiro ERG 2 where it will be built 3 DRILLSHIPS (NS Cassino, NS Curumim and NSSalinas).

(1) Workshops

1

1

• 3 Drilling Vessels

Local Content: 55%, 60% and 60%

Inhaúma Shipyard - RJ

2

1

Overview of Inhaúma Shipyard, in Rio de Janeiro - RJ (05/07/13).

(1) P-74: Conversion of the ship VLCC's hull (hull structural reinforcement, expansion, renovation and adaptation of accommodation, equipment installation and anchoring system's adjustment

and utilities), (2) Dry dock recovered by Petrobras.

• 4 Hull Conversions (P-74,P-75,

P-76,P-77) Local content: 70%

http://www.khi.co.jp/english/index.html

Atlântico Sul Shipyard - PE

1

4

5

3

2

Aerial View of Atântico Sul Shipyard (Ipojuca-PE): Construction of the Zumbi dos Palmares ship in dry dock and integration of P-62 on the shipyard dock (27/06/13).

(1) P-62: Integration of the FPSO to the 15 modules, including 3 built in EAS, 7 in the UTC gantry and 5 in the Nuclep gantry

(2) Zumbi dos Palmares SHIP of Suezmax type (2nd Lot's Ship of PROMEF 1) in dry dock; (3)Panel manufacturing workshops and pre-assembly of block,

(4) Future area for construction of 6 Setebrasil's rigs ; (5) Future area of Estaleiro Promar, responsible for building the batch of 8 Promef Phase 2's gas tankers.


Local Content (LC): 55% - 65%

• 7 Suezmax: 72% LC

• 5 Aframax: 68% LC

• 4 Suezmax DP: 73% LC

• 3 Aframax DP: 73% LC

/ IHI

Enseada do Paraguaçu Shipyard- BA

Overview of future Estaleiro Enseada do Paraguaçu Area in Maragogipe - BA (april/2014).

The Enseada do Paraguaçu Shipyard has contract with Setebrasil to build the 6 DRILLSHIPS (Ondine, Pituba, Boipeba, Interlagos, Itapema, Comandatuba)

(1) Integration pier; (2) Cutting and sheet metal processing; (3) Drydock


Local content: 55% - 65%

1

2

3

http://www.khi.co.jp/english/index.html

BrasFels Shipyard - RJ

1

2

3

Overview of BrasFels Shipyard in Angra dos Reis - RJ (31/08/12).

(1) P-61 (CL:65%): HULL'S Construction of TOPSIDE's TLWP and integration (deckbox and built modules in Singapore).

(2) São Paulo City FPSO (CL: 65%): HULL's Conversion in China and integration of the 16 mod., Built in Brasfels (5 mod), Enaval (1 mod), Thailand (8 mod) and China (2 mod).

(3) Paraty City FPSO (CL: 65%): HULL's Conversion in Singapore and integration of 15 modules built in the Brasfels (5), Nuclep (4), Enaval (2), and Singapore (4).

• 5 Building Modules and Integration

(Mangaratiba, Itaguaí, P-66, P-69

and Caraguatatuba)

• 6 Drilling SS. Local content

55% - 65%

BrasFels Shipyard - RJ

Overview of BrasFels Shpyard in Angra dos Reis - RJ (08/31/12).

(1) Hull of P-61, (2) São Paulo City FPSO, (3) Paraty City FPSO;

Paraty City FPSO's Modules: (4) TS072 - Main Gas Compressor B; (5) TS062 - Oil Treatment A; (6) TS063 - Oil Treatment B; (7) TS071 - Main Gas Compressor A; (8) TS075 - Gas Treatment

B; (9) TS073 - Compressor CO2; (CL: It was contracted full package of modules with 65% local content).

1

2

3

4

5

6

7

8

9

• 5 Building Modules and Integration

(Mangaratiba, Itaguaí, P-66, P-69 and

Caraguatatuba)

• 6 Drilling Vessels. Local

content 55% - 65%

Brasa and Mauá Shipyards - RJ

Overview of Brasa and Maua Shpyards in Rio de Janeiro - RJ (april/2014).

(1) Brasa Shipyard with modules construction activities;

(2) Mauá Shipyard;

(3) FPSO Cidade de Ilha Bela being integrated on Mauá Shipyard – 65% Local content

1

2

3

• Mauá: 12 tanker vessels (4 Panamax

and 8 Products)

• Brasa: 3 Building Modules, Topside

and Integration (Cidade de Ilha

Bela, Cidade de Maricá and Cidade

de Saquarema




Agenda

Final Remarks

Final Remarks

Main challenges for the Brazilian Shipyards:

Planning and Management;

Productivity;

Integration of the Supply Chain;

Training and Personnel Skills;

Automation and Modern Construction Techniques;

Industrial Engineering.

Final Remarks - 1

Local Content Policy is a Government requirement and is a consolidated practice for

projects in Exploration and Production in Brazil;

The challenges to put the Pre Salt fields into operation are known but the Brazilian

Maritime Industry plays a key role considering the demands;

The average Local Content today for E&P Projects range between 55% and 65%.

There are plenty of opportunities for foreign companies wishing to establish in

Brazil; Petrobras Foreign Suppliers Attraction Program is moving fast;

The association between Brazilian and foreign manufacturers is a good approach as

to provide the solutions for technology bottlenecks and to get acquainted with

business environment in Brazil.

But, many foreign companies opened their Brazilian benches operating alone and

have been very successful.

Final Remarks - 2

OBRIGADO !

Ronaldo M.L. Martins, M.Sc.

Petrobras / Materiais

Desenvolvimento do Mercado

Local Content and Maritime Demands for Equipment and...

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