IEA CEO praises Brazil’s pre-salt feats
Challenges of the offshore industry were featured in the afternoon schedule of the first day of the fifth edition of OTC Brasil
Some of the key challenges for the offshore industry were addressed on the afternoon of the first day of OTC Brasil 2019, from energy transition to gas field development, growing demand for innovation for digital transformation and, especially, cost savings in deep waters. The general director of the International Energy Agency (IEA), Fatih Birol, has not missed the opportunity, however, to extol Brazil’s pre-salt achievements. It was the highlight of the conference’s first lecture luncheon, which focused on the transition to a less carbon-intensive energy model.
Birol commented that by the end of 2018 Brazil became an energy exporter, meaning the recovery of decades of import dependency. “We hear about the American shale all the time, but we don’t hear about Brazil being an energy exporter. It is a rare and historic achievement. Be fair and proud of your story because it’s such a success – it shows that policies can change and that the right policies and incentives for industry can change the landscape, making the country’s economy and energy industry much more sustainable,” stated.
According to the executive, global energy demand grew by 2.3% in 2018, which means the fastest pace of this decade. According to IEA data, natural gas alone accounts for about 50% of global demand growth. The result was driven by a robust global economy, climate factors as well as moderate energy prices. Still on a global scenario, Birol ruled out an imminent spike in oil demand.
“Although at a slow pace, oil consumption continues to rise, with petrochemicals, SUVs, aviation and trucks taking the lead. In this sense, Brazil emerges as a strategic source in global oil production, reaching the second position in the ranking of the countries that will most contribute to the growth of production between 2018 and 2030”, said Birol. “Brazil’s oil production is set to grow strongly, supported by changes in the regulatory framework that attract capital to develop its abundant resources. If the conditions are right, there is even more positive potential”, he added.
For Birol, Brazil’s energy demand is expected to rise by more than a third by 2040, requiring an average annual investment of $ 70 billion, primarily in the oil and gas and energy sectors. “Brazil’s energy mix will remain reasonably stable, but ongoing energy reforms are essential for the country to mobilize the resources needed to invest in the energy sector. The IEA is walking side by side with the Brazilian government, bringing experiences from the United States, the United Kingdom and several other countries, to enable the opening of the gas market, enabling this energy input to advance in the Brazilian mix”, explained the executive.
High expectation for the gas market
At the “Unlocking natural gas from offshore fields” plenary session, executives from the main international oil companies (IOCs) and Petrobras reinforced the great expectation for the gas market growth due to the Federal Government’s Novo Mercado do Gás (New Gas Market) program. However, all stressed the need to establish as soon as possible a regulatory framework for the segment.
Representatives of Equinor, Petrobras, Galp, BP, Equinor and Repsol pointed out that, as much as Brazil has the potential to grow in gas production and consumption, elements such as better infrastructure, reduced prices and demand guarantee are needed to increase competitiveness in the country. According to the executives, the arrival of new players in the gas segment is extremely positive for Brazil to grow in the sector.
Rio de Janeiro’s Secretary for Economic Development, Lucas Tristão, said the state is promoting several initiatives with the federal government to implement the New Gas Market program in Rio de Janeiro. According to him, the state is working based on pillars such as: stimulation of competition, removal of fiscal barriers and integration with the electricity sector.
“We believe that the state can receive investments of around R$ 50 billion in gas projects alone, generating 10,000 jobs. We want to make Rio de Janeiro the energy capital”, said Tristão.
Brazil needs to induce universities to solve industry problems
With representatives from the government, the academy, large companies and startups, the “Levy Funds as a game changer in the Brazilian Offshore Industry” panel, which dealt with the new rules for the application of funds from government research and development holdings, highlighted the need for companies, including suppliers, who will now be able to access such resources, should play a greater role in directing investments in innovation.
For consultant Thelmo Ghiorzi, the country needs to induce universities to solve corporate problems. According to him, the university-driven research investment model has been dead since the 1970s, but it is still used in Brazil. “Universities need to be more oriented to technological and engineering problems and less to pure science. This needs to be led by companies”, he said.
Kazuo Nishimoto, from the University of São Paulo, also presented the American and Japanese models of innovation, developed in the 1950s. According to him, the success of these countries was leveraged by the industrial system, the participation of governments and also the high educational level. In the Brazilian case, however, he defended the adoption of another model.
“Innovation is more than budget. We need to employ qualified people, encourage entrepreneurship, encourage spin offs and startups”, he said, stressing that projects must be based on clear-cut missions and the involvement of various chain agents.
The president of the Ouro Negro Technology Council, Arthur Braga, explained that PUC-Rio, from which the company was born, and other educational institutions have benefited from research and development resources in the oil and gas sector. The lack of a venture capital system established in Brazil, however, hinders many of these ventures.
Orlando Ribeiro, Petrobras’ chief technology officer, highlighted the company’s project with Sebrae to avoid the “death valley” of startups in the sector. He also talked about the importance of improving the fundraising structure of these companies, which can be done through funds.
Petrobras is the company that still holds the largest amount of government equity funds for investment in R&D. Ribeiro highlighted the new rules approved by the National Agency of Petroleum, Natural Gas and Biofuels (ANP), in August. The agency has expanded eligible expenses, which are also more balanced among project partners. In addition, it has opened more space for projects with universities that meet industry demands and target priority projects that aim to solve specific problems.
“We need to invest more and more at the highest levels, focusing on industry challenges and not only presenting the problem but also showing who will benefit from it”, he said.
Chinese presence
One of the highlights of the exhibition in this fifth edition of OTC Brasil is the Chinese presence. The number of booths in the country has more than tripled compared to the last edition, held in 2017. It also included the presence of newcomers such as Munger International Petroleum Equipment and VH-Marinetech Co.
“We participated in OTC Houston and found many companies interested in our products. We believe that Brazil is also a big market for us. Maybe we can walk together in the future”, said Hou Jiaojiao, senior marketing manager at VH-Marinetech Co.
A different challenge: Enauta explores heavy oil in shallow waters in Campos Basin
During the “Atlanta Project – Heavy Oil and Ultra-Deepwater in Brazil” technical session, representatives of Enauta gave detailed presentations on techniques and equipment used to meet the challenges of the Atlanta field and optimize results. Considered one of the most challenging environments, Atlanta is an after-salt field located in the Campos Basin, 185 kilometers from the city of Rio de Janeiro, at a water depth of approximately 1,500 meters. With three producing wells, it currently operates in the Early Production System and has recently achieved a significant result with 30,462 barrels of oil per day.
Enauta’s technicians, the company that operates the BS-4 block in consortium with Barra Energia, listed the main operating challenges in that region of unique characteristics (heavy and viscous oil, location in an unconsolidated reservoir and low sedimentation) and presented the main techniques used, such as the pioneering combination of 2 BCS in series as the primary lifting / back up method, which has ensured success in exploration and widespread optimism for the next stage of a Definitive System.
OTC Brasil is sponsored by Petrobras, Equinor, ExxonMobil, Shell, BP, Chevron, Petrogal, Total, Repsol Sinopec, TechnipFMC, Vallourec, PetroRio, Aker Solutions, Frank’s International, Maha Energy Brazil, Shawcor, Solvay, Halliburton, Enauta and MOL.