Responding To Market Needs In Brazil

Port AÇU development marks new phase for InterMoor.

The oil and gas sector in Brazil presents almost as many challenges as it does opportunities. InterMoor has been working in the country since 2007 and sees its decision to establish an operations base at the new Port of Açu as a significant step towards overcoming the logistical bottlenecks that are hampering subsea operations in the region.

Brazil has recently completed its 11th exploration licensing round in a process that has seen the government offer about 100 blocks to various operators. The award of new concessions is expected to lead to a significant upswing in exploration drilling over the next few years. This will be essential if, as planned, Brazil is to double its national oil production by 2020 from 2 to 4 MMbbl/d.

However, the planned surge in production is not matched by plans to expand the necessary support infrastructure for the oil and gas industry, as John Riggs, managing director, InterMoor do Brasil, points out. “A particular issue in Brazil is insufficient deepwater port capacity to meet the demands of increased offshore oil and gas production," he says. "For example, as the major offshore oil and gas operator in Brazil, Petrobras requires access to extensive port facilities. The company’s work in the Santos basin means that it has almost all the port facilities in Rio, which leaves only two small areas for the local market and service companies to share.

“Furthermore, as most of the port facilities in Brazil are under municipal or federal ownership, the bureaucracy associated with the development of new ports has been a major obstacle to previous plans to increase capacity. Several new port development projects have run into problems during planning and construction, which has increased the pressure on existing infrastructure. The serious shortage of deepwater port capacity is particularly acute for independent oil companies and contractors,” he concludes.

InterMoor’s understanding of the Brazilian market and the pressures on existing facilities made it imperative to find an innovative business solution to the likelihood of increasing logistics issues. Riggs says, “With support from Acteon, which recognised that restricted logistical capacity was a key issue in Brazil that was only going to get worse, InterMoor took a bold decision to invest in the Port of Açu development. Two years ago, we signed up to the development plan and agreed to develop an operations base in the port. This will give us a dedicated facility where we can import, store and install equipment for our complete range of clients. I believe that this facility will help to transform the Brazilian logistics market.”

Construction of the $2-billion port and industrial complex 300 km north of Rio de Janeiro involved the world’s largest dredging ship cutting through the beach and digging 13 km of docks out of dunes and marshland. The development of this private port facility will deliver significant benefits to the offshore sector and InterMoor will be one of its key occupants. Riggs says, “We have listened to the local market and responded to their needs by making this commitment to operate out of the new port facility.”

The port has been dredged to 10 m, which offers access for large construction vessels. In contrast, the port of Rio has a 6-m draught at high water, which means that many vessels cannot access the port or can only transit at high water. Access at Port Açu will be useful for service companies having projects with Petrobras that cannot find sufficient port facilities to deliver their services in the way they would choose. The Port Açu base will become a vital facility for InterMoor and any other Acteon companies who have a requirement to support Brazilian operations.

The oil and gas sector in Brazil is in a period of rapid growth which offers huge opportunities for service companies, and InterMoor has had its share of technical and commercial success stories in the country, including projects for Shell and the installation of the drilling and production conductors on the Papa Terra project for Petrobras (see S2S v12 03–13, page 4).

However, there are still significant challenges to be faced in establishing and maintaining profitable operations in the Brazilian market. Riggs explains, “For InterMoor, the key to continuing success has been flexibility in the services we offer and an unwavering focus on customer service. Before the new round was announced, many companies were running out of areas to explore and the concessions awarded in 2008 were starting to expire. This meant low drilling activity and limited demand for mooring operations. We compensated for the low levels of drilling and mooring in Brazil by focusing on installation and conductor installation work. Further diversification led to us currently undertaking about 98% of the positioning work for moored rig moves in Brazil.”

In the Brazilian subsea services market, most of the major players are locked into long-term contracts with Petrobras, which can make it difficult for them to offer support elsewhere. This situation has worked in InterMoor’s favour, says Riggs. “Without a tie-in on major Petrobras programmes, we are in a strong position to support companies, such as Shell and Chevron, that are gearing up for further exploration work under the 11th licensing round allocations with a range of survey, mooring and installation services. For InterMoor, the future in Brazil is looking bright.”

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