What drives the FPSO store size

Oil & Gas Brazil. Business opportunities for German companies in the Brazilian oil and gas sector




3 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector Coordination and editing Oliver Döhne and Hanno Erwes

4 Publisher German-Brazilian Chamber of Commerce and Industry Rio de Janeiro Av. Graça Aranha, 1 Rio de Janeiro Brasil In cooperation with Germany Trade and Invest - Gesellschaft für Außenwirtschaft und Standortmarketing mbh Friedrichstraße Berlin Project management Hanno Erwes and Oliver Döhne Research and interviews Oliver Döhne Economic coordination Ana-Christina Veit, Cristiane Forli Graphic design / typesetting Heron Machado Rocha, Interligar - Branding & Design, Rio de Janeiro Translations Alessandra Dietz, Gabriela Freudenreich, Isabella Wapke, Jutta Irene Gruetzmacher, Patrícia Meirelles Editor Oliver Döhne Editorial deadline March 2012 Print artundwork. kommunikation gmbh Sponsors Allianz, Schulz, Sinaval, State of Baden-Wuerttemberg, Baden-Wuerttemberg International, Veirano Advogados, KfW, City of Cologne, Pellon Associados Acknowledgment Adilson de Oliveira Cover picture Start of the test stage of the production ship FPSO P-50 in Guanabara Bay. Photo: Rogério Reis / Banco de Imagens Petrobras Disclaimer All information has been carefully researched, but no guarantee can be given for its accuracy. This applies in particular to Petrobras' material requirements and investment plans, which are non-binding announcements and estimates. Copyright All rights reserved. Total or partial reproductions are not permitted without the consent of the authors.

5Carsten Wiebers, KfW Project Cargo / Insurance in the event of a delayed start of business 62 Angelo Colombo, Ingo Dietz, Allianz Baden-Württemberg greets PETROBRAS! 64 Ewald Stirner, Ministry of Finance and Economy, Stuttgart


7 Greeting Sérgio Cabral, Governor of the State of Rio de Janeiro Sérgio Cabral. Photo: Carlos Magno Dear friends from Germany, It is my great pleasure to present this publication to you in partnership with the German-Brazilian Chamber of Commerce and Industry in Rio de Janeiro. I think this is an excellent opportunity to alert German companies to the economic opportunities in relation to the recent oil and gas discoveries in the Pré-Sal layer, particularly in Rio de Janeiro, the Brazilian state responsible for is responsible for more than 80% of the country's oil production and is considered a key decision-making center in the country when it comes to energy, being the headquarters of companies such as Petrobras, Eletrobrás, Eletronuclear, Ipiranga and OGX, among others. More importantly, recent German investments in Brazil are largely concentrated in Rio de Janeiro. Examples include the CSA Companhia Siderúrgica do Atlântico, a joint venture between ThyssenKrupp and Vale as well as Siemens / Chemtech with its investments in the Fundão technology park, MAN Latin America, which is currently expanding its production capacity in Resende, and Schott, which has recently expanded its Factory inaugurated, as well as other large corporations in the chemical industry such as Bayer and Merck. My assertion that the state of Rio de Janeiro is living in a historic moment can be borne out by many other examples. After decades of severe economic decline and political and administrative disorganization, the state of Rio de Janeiro today receives the most private investments and is in close cooperation with the federal government at all levels. Rio de Janeiro was the only Latin American country to receive investment grade from two of the world's most important rating agencies (Fitch and Standard & Poors), regardless of the fact that we host the most spectacular events in history, including the Rio 2013 World Youth Day, the soccer World Cup 2014 and the Olympic and Paralympic Games As I know Germany's strategic relevance for our state and the not yet fully exploited economic potential of our bilateral relationship, I appreciate this and other initiatives to identify new economic opportunities with our German partners. As a result, I take this opportunity to invite you to take part in this historic moment and thus strengthen the historical and economic ties between Germany and Rio de Janeiro. Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 5

8 Greeting Guilherme Stüssi Neves, President of the German-Brazilian Chamber of Commerce and Industry Rio de Janeiro Guilherme Stüssi Neves In this publication, the enormous possibilities of oil production in Brazil are presented, the aim is to encourage small and medium-sized German companies to join the huge network Involve suppliers. In the period from 2012 to 2020, investments of more than $ 200 billion are expected to be made in the extensive network of deep-sea drilling. It is not difficult to imagine the high demand for technical equipment, spare parts, storage capacities and transport know-how for oil and gas. In this enormous new market, there is terrain for companies that offer products with advanced technology. German companies can and should accept this challenge and benefit from this development. For this they can count on the support of the AHK in Brazil, in particular on the competence of the AHK Rio de Janeiro in the field of oil and gas. 6 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

9 Greetings Jürgen Friedrich, Managing Director Germany Trade & Invest Jürgen Friedrich Dear Readers, Brazil is growing into a petroleum giant. The large new offshore sources, the ambitious plans of the state oil company Petrobras and the still rudimentary infrastructure create interesting opportunities for German suppliers as well. Nowhere else is the demand for equipment for the offshore oil industry currently higher than in Brazil. From the German point of view, the enormous need for innovative high-tech solutions that make it possible to make the previously extremely expensive extraction in the deep-sea areas economical is particularly interesting. One example is the relocation of production processes to the sea floor. We would like to give you a clue as to where exactly the opportunities for German companies lie in this publication, which we created together with the German-Brazilian Chamber of Commerce and Industry in Rio de Janeiro. The information gathered is based on numerous on-site interviews, for example in the materials department at Petobras, the program to develop the local supplier industry (Prominp), with companies in the sector and with petroleum experts from the University of Rio de Janeiro (UFRJ). In addition, we have researched long-term strategic plans, presentations and studies for you in order to draw as realistic a picture as possible of how large the material requirements are likely to be over the next five to ten years, where there are special bottlenecks and how you can best do business. As a special added value, we asked experienced German companies for tips for newcomers. Germany Trade & Invest offers you continuously updated, locally researched analyzes of the economic and industry situation as well as projects and tenders. The customs issues that are important in Brazil are also presented there. I hope you enjoy reading this publication and wish you every success in your business. Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 7

10 Rio de Janeiro a federal state that drives development Julio Bueno Julio Bueno, Minister of Economic Affairs of the state of Rio de Janeiro Today there are enough reasons to celebrate in the state of Rio de Janeiro: the undisputed talent for the Brazilian energy capital, in which representatives of the most important value chains of crude oil and natural gas industries, healthy government finances and the current position at the forefront of the investment interests of major players around the world due to hosting the 2014 World Cup and the Olympic Games.Thus there are equally strong reasons for a lot of work to implement all the planned projects and thus to create new jobs and enable the population to have an improved income. As the largest producer of crude oil and natural gas in Brazil, the state of Rio de Janeiro expects around R $ 250 billion in investments by 2020, of which about 75% will go into the oil business. In addition to the massive orders from Petrobras to meet the demand for oil production under the salt crust (pre-salt), other oil companies have decided to set up in this state. They help to significantly increase the volume of companies installed here, but they too must comply with the requirements of Brazilian legislation. In the course of the oil discovery under the salt crust, the partner companies of Petrobras, with their high investments, should not go unmentioned. For example, the British group BG, which has announced investments in the order of US $ 30 billion by 2015. These investments, together with those of Petrobras, will triple the volume of Brazilian oil production to around six million barrels per day by 2020 and thus have a direct impact on the country's economy, more precisely on the economic and social development of the producing countries and communities. In addition to oil production in the deep sea, we can also record extensive public and private investments, for example by the Brazilian group OGX. Under the management of the entrepreneur Eike Batista, the group of companies has a rapid rhythm of new orders with the aim of putting the newly discovered oil deposits into operation as soon as possible. From oil production under and above the salt crust, on the high seas or in shallow waters, in the north and south of the state, these investments on land activate the first to fifth links in the value chain as well as the entire logistics of the transport and distribution of the crude oil Coast of Rio is won. 8 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

11 Also in the state of Rio de Janeiro is the Petrobras project with the largest investment volume in a single project: the Petrochemical Complex of Rio de Janeiro (Comperj), which promises 150,000 direct jobs and which will make the state the first refinery site of the Country power. The state is also doing its part to keep up with this rapid development: from the provision of land for the settlement of new companies to tax incentives and financial aid for the modernization of factories and shipyards to direct investments in logistics. This includes, for example, the Arco Metropolitano motorway ring with investments in the order of R $ 1.2 billion, which will initiate an unprecedented change in the urban area of ​​Rio. This construction project is intended to connect the most important highways with one another in order to reduce the congestion of the capital's transport network and to facilitate access to the ports of Itaguaí (formerly the port of Sepetiba) and Rio de Janeiro. It is the first highway from Rio de Janeiro designed for freight transport. This motorway ring brings enormous advantages for everyone who wants to settle in the state, because it secures competitive advantages, reduces the operating costs of the ports and offers further logistical advantages. The establishment of the Comperj is already an example of what the Arco Metropolitano brings with it in terms of social improvement and economic growth in this area. Due to the easier access, the project of the motorway ring is intended to promote the establishment of companies outside the metropolitan area. In the area of ​​logistics, the private port terminals should also be mentioned, which are being set up to support oil production in deep-sea deposits. The area around Itaguaí is consolidating as a supply base for work on the high seas and as a center for the removal of oil. A new port is to be set up for this purpose, which will be operated jointly by Petrobras, Gerdau and CSN. At the same time, the EBX group is investing US $ 15 billion in a port complex in the north of the state, Superporto Açu, which is expected to create thousands of direct and indirect jobs. The state is also involved in this construction project through the establishment of a nearby industrial park which is intended to support the port operations and serve as an incentive for suppliers who are interested in settling in the vicinity of the port project. And finally, the state of Rio de Janeiro is striving to be the largest technology location in Brazil. For this purpose, investments of R $ 1 billion have already been approved for a technology park, which is affiliated with the Federal University of Rio de Janeiro and operates exclusively in the oil and gas sector. After the establishment of the largest companies in the Schlumberger sector, FMC, EMC2, BG, Siemens and others, Rio de Janeiro can already be compared with the world-famous oil capital Houston, Texas. The diversification can allay possible concerns that the state of Rio de Janeiro is economically focused solely on the oil and gas value chain. In the technology area, five other parks are up for discussion, focusing on the best researchers in the knowledge areas that make up the state's most important activities. For example the automotive industry, which is setting up its second most important production site here. We are very happy to support these campaigns, we are consolidating investments and focusing on new projects. In this way we are resurrecting a new state of Rio de Janeiro that is finally leaving the time of stagnation behind. A state that is in line with Brazil's current accelerated growth, a state that is fueling that growth. Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 9

12 Brazil in the scenario of international oil production Oliver Döhne, Germany Trade & Invest Brazil is in the process of becoming one of the most important oil producers in the world. Between 2000 and 2010 the proven oil and gas reserves increased by almost 70%. According to current estimates, Brazil will advance into the top 5 in the world in terms of both reserves and production in the foreseeable future. International oil companies are increasing their commitment and suppliers from all over the world are increasingly turning their attention to this most dynamic of all current markets. After all, the demand for equipment for the offshore industry is nowhere as high as in Brazil. And the expansion has only just begun. In the next 20 years, a huge infrastructure will be created around the expansion of the Brazilian offshore sources, including shipbuilding, upstream and downstream areas. Brazil’s rocket rise as a global player in the oil industry has three main reasons: stability / reliability. While some traditional oil regions are struggling with political instability, Brazil has been stable both politically and economically for a long time. Strategy / production expansion. Brazil is systematically and strategically building up its own oil industry and with Petrobras has a modern, professional and financially strong oil company of international stature, which is an international leader in deep-sea drilling. Oil wealth / new discoveries. More than 50% of the newly discovered oil fields worldwide since 2005 are located in deep-sea areas. Since Petrobras took on an international pioneering role in the development of these deep-sea springs early on, around 62% of the newly discovered deep-sea springs are now in Brazil. President Dilma Rousseff visiting platform P56 in June Photo: Agência Petrobras 10 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

13 Production development forecast (in million barrels per day) Source: U.S. Energy Information Administration Stability / Geopolitics In times when some traditional oil regions are sinking into political turmoil and instability, which is driving up the oil price and endangering security of supply, the most important industrial nations are looking for long-term reliable partners. The Energy Information Administration of the U.S. The Ministry of Energy already has its own category of sources - except Iran - in its statistics. When looking for new oil suppliers, the industrial nations inevitably come across Brazil, a solid democratic country with a proven stability policy, legal security, continuity and reliability on the political stage and, last but not least, with enormous new oil deposits. According to the forecast of the U.S.Energy Information Administration, Brazil will leave countries with much larger reserves, such as Venezuela and Iran, far behind in terms of production in the coming years. Production platform off the south-eastern coast of Brazil. Photo: MAN D&T Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 11

14 Strategic expansion Brazil has developed over the past few decades from a heavily dependent oil importer to a self-sufficient producer. The hour of birth of the Brazilian oil industry was the oil crisis of 1973, when the price explosion made the trade balance very negative. Under pressure from the government, Petrobras increased its efforts to find its own oil and made its first big find in 1975 in the Campos Basin. To date, almost 75% of the proven oil reserves lie in the Campos Basin, which stretches off the coast of Rio de Janeiro and Espírito Santo. Proven reserves Proven oil reserves (by state) Type State In million barrels Onshore Bahia 255 Rio Grande do Norte 251 Sergipe 240 Amazonas 101 Espírito Santo 33 Ceará 14 Alagoas 11 Onshore total 905 Offshore Rio de Janeiro Espírito Santo Rio Grande do Norte 117 Ceará 49 Bahia 34 Sergipe 29 Paraná 27 São Paulo 24 Total Offshore Source: ANP (Dec. 2011) Source: ANP (Dec. 2011) Metropolitan area also includes the regions Macaé, Campos and São João da Barra, where the billionaire Eike Batista built the super port complex Porto de Açu builds. The petroleum reserves in Brazil officially proven by the Brazilian national regulatory authority for the petroleum industry (ANP) were around 14.3 billion barrels at the end of 2011, of which around 94% were offshore. In addition to the dominant deposits off the southeast coast, Brazil has other sources in the northeast and the Amazon region. International experts agree that the officially recognized reserves are only a fraction of the actual amount. By far the most important oil state is Rio de Janeiro, where almost 84% of the proven oil reserves are located. In terms of production, too, Rio de Janeiro clearly ranks first. The headquarters of Petrobras and some of the most important shipbuilding clusters are also located in Rio de Janeiro. Most of the suppliers settled in São Paulo during the development of the domestic oil industry in the 1970s and 1980s. In the course of the exploration of the new offshore sources, Rio de Janeiro is once again developing into the epicenter of the oil industry, in addition to the proven reserves Source: ANP (Dec. 2011) In the early 80s, the construction of the first large platforms and exploration in waters up to to a depth of 170 m, after which a deep drop begins due to the sea topography. As a result, Petrobras began to advance into deeper waters faster than others, only to find extensive new springs there. 12 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

15 New discoveries What brought Brazil from the role of a smaller oil producer to the world stage of the strategically most important production regions at one stroke was the discovery of large new deep-sea springs off the southeast coast, the so-called Pré-Sal. The name (before the salt) comes from the fact that the springs are located under a thick layer of salt (see below). But also in the deep sea of ​​the north and northeast of the country, on the so-called equatorial edge between the state of Rio Grande do Norte and the Amazon estuary, experts suspect large new reserves, since the geological structure there corresponds to that of the oil-rich Gulf of Guinea in West Africa, with which the Region was connected before the continental shift. According to Petrobras, more than half of the springs discovered worldwide between 2005 and 2010 are in the deep sea, of which 62% are in Brazil. Of the large new oil fields of over 1 billion barrels, 11 out of 35 are in Brazil. Newly discovered oil wells around the world since 2005 Source: Petrobras experts estimate the springs in the Brazilian deep-sea regions to total 50 billion to 70 billion barrels. This would make Brazil one of the countries with the largest oil reserves. This list currently dominates Saudi Arabia, Venezuela, Iran, Iraq, Kuwait and the United Arab Emirates. With its previous sources, Brazil would have around 63 to 83 billion barrels. Nachgew. Reserves (in billion barrels) Sources: BP, GTAI Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 13

16 The Pré-Sal The story of the Pré-Sal began in 2004 when Petrobras encountered sandstone while drilling in the Santos Basin, which indicated lower-lying petroleum-bearing layers. A little later, Petrobras tapped the Tupi field, the first reservoir of Pré-Sal oil in the world. As early as 2008, the first test transport from the Tupi field took place, which went around the world with the photos of how the then President Lula presented his hands, which were wetted before Pré-Sal petroleum. The then President Lula after the first Pré-Sal test promotion in May Photo: Agência Petrobras The Pré-Sal reserves are around 300 km off the south-east Brazilian coast and extend over five states, from Espírito Santo via Rio de Janeiro and São Paulo to Santa Catarina. Experts see the most extensive reservoirs in the Santos Basin. The Pré-Sal deposits are around 300 km off the coast. Illustration: Agência Petrobras 14 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

17 According to Petrobras, the Tupi field alone contains around 5-8 billion barrels. The Libra and Franco fields are said to contain up to 13 billion barrels, plus 5 to 8 billion barrels in the Lula and Cernambi fields, 3 to 4 billion barrels in the Iara field, and 1 to 2 billion barrels in the Guará field. In addition, there are other fields where test drilling still takes place. According to experts, the Pré-Sal oil is of particularly high purity and lies under a m thick layer of salt at a depth of up to m. Illustration: Agência Petrobras Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 15

18 Exploration and production model For the exploration of the Pré-Sal sources, Brazil chose a mixed concession model, on the one hand to involve international oil companies and, on the other hand, to keep the strategic deposits in hand. International oil companies can take part in the tendering rounds of the National Oil Agency ANP, with corresponding requirements for local value creation, royalties and a participation of Petrobras (at least 30%). According to Petrobras, only 20% of the Pré-Sal deposits have been allocated. Up to February 2012, a total of 39 Brazilian and 39 foreign companies took part in the ten auction rounds carried out by the ANP so far. Company Origin Activity Operator in at least one field. Partner in at least one field Aloes / Silver Marlin Brazil AM, BE, CP XX Anadarko USA BE, CP XX Arcadis Netherlands AM, CP X Arclima Brazil AM, CD X Aurizônia Brazil BE, CP XX Barra Energia Brazil BE, CD X BG United Kingdom BE XX BP United Kingdom BE, CP XX Brasoil Brazil BE, CD, CP XX BrazAlta Canada BE, CP XX CEMIG Brazil BE X Cheim Brazil AM, CP X Chevron-Texaco USA BE, CP XX Codemig Brazil BE X COMP / Imetame Brazil BE XX Const. Cowan Brazil BE X Dover Canada BE X EBX Brazil BE XX Ecopetrol Colombia BE X Egesa Brazil AM, CP X El Paso USA BE, CD, CP XX Engepet Brazil AM X ERG Brazil AM, CP X Eromanga Austrália BE X Esso USA BE X Forbes & Manhattan Canada BE X Galp Energia Portugal BE, CD XX Genesis 2000 Brazil AM, CP X Gran Tierra Canada BE X Hess USA BE X HRT Brazil BE X Inpex Japan BE, CP X Integral Colombia BE X Karoon Australia BE X Koch / Central USA AM, BE, CD, CP XX Lábrea Brazil BE X Maersk Denmark BE XX 16 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

19 Company Origin Activity Operator in at least one field. Partners in at least one field Norse Norway BE, CD, CP XX ONGC India BE, CP XX Orteng Brazil AM, BE, CP XX Panergy Brazil AM, CP X Partex Cayman Islands BE, CP XX Perenco United Kingdom BE X Petro Latina Singapore BE X Petrobras Brazil BE, CD, CP XX PetroRecôncavo Brazil BE, CP X Phoenix Brazil BE, CD, CP X Pioneira Brazil AM, BE, CP XX Proen Brazil AM, CD X Quantra Brazil BE, CD X Queiroz Galvão Brazil BE, CD, CP XX RAL Brazil AM, BE, CP X Repsol YPF Spain BE, CD, CP XX Rio Proerg Brazil AM, CD X Severo & Villares Brazil AM, CP X Shell United Kingdom BE, CD, CP XX Sinochem PR China BE, CP X Sinopec PR China BE X Sipet Brazil BE, CP XX SK Korea (Rep.) BE, CP X Sollita Brazil AM, CD X Somoil / Serena Angola BE X Sonangol Angola BE, CD, CP XX Sotreq Brazil BE, CP X Statoil Norway BE, CP XX STR Brazil BE XX SynergyGroup Panama BE, CD, CP X TDC USA BE, CP X TotalFinalElf France BE, CD X UBX Brazil BE, CD, CP X UTC Brazil BE, CD, CP X Vale Brazil BE X Vanco USA BE X VB India BE X Vibrapar Brazil BE X Vitória Ambiental Brazil BE X W.Washington Brazil BE, CP X Woodside Australia BE X Brazil 39 Abroad 39 Total 78 BE = Exploration block, AM = smaller fields, possibly without prod., CP = production fields, CD = field in development, source: Anp Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 17

20 FPSO P-50 production ship en route from Guanabara Bay to the Albacora Leste field in the Campos Basin. Photo: Paulo Arthur / Banco de Imagens Petrobras The next Pré-Sal There will be no shortage of future uses for the know-how that is being developed for the Brazilian Pré-Sal sources. According to experts, the African Atlantic coast has a very similar structure to the South American coast, as both continents were once connected. Brazil could therefore only be the beginning of a pré-sal trend that could then continue off the West African coast, for example in Angola, which is also Portuguese-speaking. Source: Geogrify 18 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector


22 Production By systematically expanding both conventional and new deep-sea sources, many experts believe that Brazil will become the fifth most important oil producer in the next ten years, behind the USA, Saudi Arabia, Russia and Canada. This opinion is not only expressed by Petrobras, but also, among others, by the U.S. Energy Information Administration. Brazil is projected to double its production by 2020 and more than triple its production by 2035. The annual average growth in Brazil is 4.1% higher than in any other country. Forecast of crude oil production by country (in million barrels per day) Source: US Energy Information Administration 20 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

23 Land change. pa USA 8.3 9.5 10.8 12.2 13.9 14.8 16.2 2.4% Russia 9,, 7 11.1 11,, 7 1.5% Saudi Arabia 11.1 10, 1 10,, 7 14.2 14.5 1.1% Canada 3.1 3.8 5.5 6.4 7.2 8 8.6 3.5% Brazil 2.0 2.8 3.7 4 , 9 5.5 6.4 7.2 4.1% PR China 3.9 4.3 4.0 4.2 4.9 6.0 7.1 2.1% Iraq 1.9 2.4 2 , 6 3.4 4.4 5.5 6.5 3.8% Iran 4.2 4.2 3.6 3.5 3.6 3.7 3.8-0.4% Kuwait 2.7 2 , 5 2.7 2.8 3.2 3.6 3.9 1.3% Nigeria 2.6 2.4 2.7 2.9 3.2 3.3 3.3 1.6% UAE 2, 8 2.8 3.2 3.3 3.4 3.2 3.1 0.1% Venezuela 2.8 2.3 2.4 2.6 2.7 2.7 2.7 0.1% Qatar 1.1 1.4 1.7 2.0 2.2 2.4 2.4 2.6% Algeria 2.1 2.1 2.4 2.5 2.5 2.4 2.3 0.2 % Angola 1.3 2.0 2.0 2.1 2.1 2.0 2.0-0.1% Mexico 3.8 2.9 2.3 1.7 1.4 1.6 1.8 -2.0% India 0.1 1.2 1.2 1.0% Libya 1.7 1.8 0.8 0.7 0.7 0.8 0.8-3.0% Source: US Energy Information Administration Photo: Agência Petrobras Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 21

24 Expansion and goals of the Brazilian oil industry Oliver Döhne, Germany Trade & Invest Strategic Plan Petrobras In the current five-year plan up to 2015, Petrobras provides for an increased budget for exploration and production compared to the previous plan. More than half of the total investment of US $ 224.7 billion is expected to flow into these areas. A considerable part of the fresh capital will also go into transport, processing and commercialization with around US $ 71 billion. Planned investments of up to .7 billion US $ Of the planned expenditure for exploration and production, 95% will be made in Brazil, which shows the importance of Brazil in the future scenario of global oil production, especially when it comes to new reserves. Around two thirds of the funds earmarked for exploration and production go into production, the rest in roughly equal parts into infrastructure and production. According to Petrobras, the majority of investments are intended for services, i.e. the construction of systems, platforms, etc. is often outsourced to specialized industrial service providers, so-called EPCs (engineering, procurement, construction). The total investment value remained about the same compared to the business plan. Investments in E&P in Brazil (in%) US $ 117.7 billion Source: Petrobras Business Plan Source: Petrobras Business Plan Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

25 In the strategic plan up to 2015, the Pré-Sal is still in the pilot phase. Therefore, a somewhat larger part of the investments in the period will flow into conventional sources than into the Pré-Sal fields. Nevertheless, Petrobras increased the planned E&P investments for the Pré-Sal compared to the previous five-year plan by almost US $ 20 billion to US $ 53.4 billion. For the years thereafter, the Pré-Sal can be expected to make a much larger share of total investment. According to Petrobras, the share of Pré-Sal in oil production will grow from 2% in 2011 to 18% in 2015 and to 40.5% in 2020. Experts reckon that the Pré-Sal will account for up to 70% of Brazilian oil production in the long term. An important cornerstone of Petrobras' expansion strategy is not only greater oil production and higher domestic added value, but also an increase in exports. At the moment, Brazil is mathematically self-sufficient, but in practice even larger quantities are imported, e.g. Naphtha and heavy oil. There is also an extreme imbalance between imports and exports in the chemical industry, where Brazil imports large batches of fertilizers and other chemical products. The declared goal is therefore to replace imports with domestic production as quickly as possible and, at the same time, to ramp up exports, not only of crude oil but also more and more of processed derivatives of high quality. By 2020, Brazil aims to more than quadruple its petroleum exports and triple its export of processed petroleum products. Projects Start of operation Project Capacity (bpd) 2012 Roncador Module 3 P Tiro / Sidon FPSO Cidade de Itajaí Guará Pilot 2 FPSO Cidade de São Paulo Baleia Azul FPSO Cidade de Anchieta 4 Long-term test in Pré-Sal 2013 Roncador Module 4 FPSO P Papa-Terra P- 61 and FPSO P Aruanã FPSO Parque das Baleias FPSO P Lula NE FPSO Cidade de Paraty Long-term tests in the Pré Sal 2014 Baleia Azul Pós-Sal FPSO Siri Jaqueta FPSO Guará (Norte) FPSO Cernambi Sul FPSO Maromba ESP / Marimbá Franco FPSO 2 BMS-9 ou FPSO P-66 Replicante 1 BMS-9 ou Long-term tests in Pré-Sal Conv. Sources Source: Petrobras Pré-Sal On the way to becoming a petro-exporter (billion US $) Source: Petrobras Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 23

26 Expansion of the processing infrastructure In order to realize the plan of self-sufficiency with petroleum derivatives and petrochemical precursors, Brazil needs more capacity in the petroleum processing industry. The aim of the 2020 strategic plan is to increase the refinery capacity by bpd by 2015 and by further bpd by 2015. On the one hand, the existing refineries are to be modernized and, on the other hand, new greenfield projects are to be created that are logistically connected to the new exploration and production centers. to ensure processing of the non-exported or otherwise used petroleum and to enable commercialization and export of processed petroleum derivatives. Of the US $ 70.6 billion that will flow into the refinery, transport and commercialization items, more than 50% will go into the construction of the four new refineries Comperj in Rio de Janeiro, Abreu e Lima in Suape, Premium I in Maranhão and Premium II in Ceará. US $ 3.8 billion is earmarked for the expansion of petrochemical parks in Suape and Rio de Janeiro. With the focus on the northeast, the pent-up demand there and the industrial boom should be taken into account. Production, downstream and market demand until 2010 (in bpd) Source: Petrobras 24 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

27 Comperj and Abreu e Lima The refinery in the petrochemical complex in Rio de Janeiro (Comperj) is already partially finished. In the course of the planning, Petrobras increased the capacity of Comperj in addition to the bpd heavy oil by another module of the same size, which is to go into operation a few years after the first phase. In addition to the refinery, Comperj will include facilities for the production of first-generation petrochemical products, e.g.Build up propylene, butadiene, benzene and a capacity for ethene production of around 1.3 million t per year. In addition, a complex for the production of second generation petrochemical products such as ethylene glycol, polyethylene and polypropylene will be created. A central production facility for water, steam and electricity is also part of Comperj. Another strategic goal is the settlement of 3rd generation producers who convert the chemicals into consumer goods along the bypass highway from Rio de Janeiro, the Arco Metropolitano, which will connect Comperj with the port of Itaguaí. Comperj was partially completed in early 2012. Photo: Agência Petrobras Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 25

28 Plenty of room to grow the Suape port industrial complex. Photo: Divulgação / Suape Abreu e Lima was originally designed as a cooperation with the Venezuelan state oil company PdVSA. In the meantime, one has to assume that Brazil will take on the project on its own. Investments in the refinery are around US $ 13.3 billion, and the attached Suape petrochemical park is to receive a further US $ 2.75 billion. The refinery, which is part of the Suape industrial port complex, is scheduled to go into operation in 2012 and will gradually process up to bpd of crude oil. The petrochemical complex is expected to produce t PTA (terephthalic acid), t POY (polyester yarn) and t PET per year. Abreu e Lima refinery under construction. Photo: Suape Global / Divulgação According to experts, Suape will play an important role in increasing domestic added value, as an interesting industrial cluster is developing here with good site conditions, modern administration, the most efficient private port, good energy supply and more and more settlements. Suape also excels when it comes to training and innovation. As part of the Suape Global program, specific measures in the fields of human resource development, industrial development, infrastructure and the environment, technology and innovation, and business and communication development are coordinated and driven. For the construction of the refinery, Petrobras Suape is particularly looking for German companies in the metalworking industry (see chapter on concrete requirements). Abreu e Lima was in the advanced implantation phase at the beginning of 2012. 26 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

29 Premium I and II Two other large refineries are still in the planning phase: Premium I in the state of Maranhão and Premium II in the state of Ceará. Both systems are designed for bpd in the start-up phase. Pemium I should go into operation in 2016 and Premium II from 2017. Premium I is to produce further bpd in a later phase. Premium I is currently in the grading phase; the preliminary license (licença previa) has been granted for Premium II. Both plants are to produce premium derivatives of international specification. Target capacity per unit of the premium refineries of the Suape petrochemical complex. Photo: Suape Global Liquid Gas Plant Monteiro Lobato, UTGCA. Photo: Rogério Reis / Banco de Imagens Petrobras unit nominal capacity (bpd) distillation petroleum coke HCC HDT diesel HDT kerosene / NAFTA Source: Petrobras Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 27

30 Petrobras tanker P 74. Photo: Agência Petrobras Maintenance and spare parts business area In addition to investments in new equipment, which will amount to around US $ 20 billion to 25 billion annually over the period, there is a less visible but all the more lucrative business area in maintenance, service and replacement systems and parts. According to Ernani Turazzi, Market Development Manager in the materials department at Petrobras, maintenance costs are around US $ 50 billion per year, which is more than twice as high as new investments. And the expenses for maintenance and the purchase of replacement equipment will continue to increase significantly in the future due to the large number of new platforms. 28 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

31 As the size of the fleet increases, so does the need for replacement equipment and maintenance, around US $ 50 billion per year. The picture shows the P-45 on its way to the Marlim field (July 2011). Photo: Agência Petrobras Local Content Brazil not only wants to expand oil exploration and the downstream area, but also expressly wants to expand the domestic supply chain. First, the Brazilian suppliers were given the same qualification, but now numerically defined minimum proportions of domestic added value apply depending on the project, location and product. Where the domestic industry still has gaps in the product range, the local content is correspondingly lower, but will undoubtedly increase gradually for all areas as part of a forced line in the government. According to industry experts, for example, different local content requirements apply to onshore (up to 84%), shallow water (57-67%) and deepsea (35% -57%). The increasing local content requirements in no way mean that Petrobras is not interested in international know-how. On the contrary. We welcome companies with innovative technology with open arms, says Ernani Turazzi from the Petrobras materials department. The Pré-Sal is a gigantic project. Brazil can hardly cope with this on its own, says Adilson de Oliveira, professor of economics and petroleum expert at the renowned Federal University of Rio de Janeiro (UFRJ). International supplier companies have to adjust to local production and weigh the attractiveness of the market against higher production costs in international comparison. The critical mass also plays a role, the minimum demand volume above which it is worthwhile to set up a production facility. In view of the high location costs and the current exchange rate, the demand must come completely from the Brazilian market, as exports from Brazil are often not cost-competitive. But Oliveira is of the opinion that the demand in Brazil for most products will increase so strongly that production pays off even without export. In addition, the state helps with settlement incentives, tax incentives such as the Repetro program (tax deduction as if it were export also for domestic sales) and the BNDES also provides financing lines for companies with a Brazilian legal form with local content. In addition, according to Oliveira, there is the protection that a company based in Brazil enjoys from international competitors through customs and local content requirements. Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 29

32 Maria das Graças Foster, new President of Petrobras, reaffirmed the line of local content on. Photo: Agência Petrobras The new Petrobras President Maria das Graças Foster publicly underscored several times that Petrobras takes local content seriously and made the issue a top priority by subordinating the program to develop the national supplier industry (Prominp) directly to herself. In addition, Petrobras has started to introduce its own minimum local content limits for all oil production projects in addition to the requirements of the ANP. Suppliers usually find out the exact amount of the local content from the EPC tenders. Failure to comply with the local content incurs fines for the operators of the oil fields, i.e. usually Petrobras. Even if such a punishment causes damage to the image of Petrobras, the preference given to local producers also has limits. According to industry experts, in individual cases it may make more sense for Petrobras to import and pay a fine than to accept a much higher price from a local manufacturer. Local content requirements often do not have to be met overnight, but are negotiated bilaterally. Often the compromise is a gradual build-up over a few years. We would like foreign companies not only to produce here, but also to develop technology here together with us, says Ernani Turazzi from the Petrobras materials department. Petrobras already has such partnerships with numerous multinational companies. The center of these collaborations is the Cenpes research institute on Ilha do Fundão in Rio de Janeiro, where international players such as GE, Schlumberger and Halliburton have already joined forces with Petrobras. The example of a Bavarian pump manufacturer who, together with Petrobras in Brazil, developed a product that he sells successfully on the world market and even in the People's Republic of China, proved that innovation together with Petrobras can be a lucrative solution to the problem of high production costs in Brazil. Local content (average target value) Source: Petrobras 30 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector


34 Shipbuilding and its current challenges Ariovaldo Rocha, President of the shipbuilding association SINAVAL (Sindicato Nacional da Indústria da Construção e Reparação Naval e Offshore) insignificant. Coastal shipping between Brazilian ports has declined. The fleet of ships, which was already in its prime, urgently needed to be renewed. In the global scenario, Korea and China are on the rise to the fore in global shipbuilding and have already overtaken Europe and Japan. Shipbuilding in Brazil is facing the great challenge of supplying tankers as well as floating drilling rigs and platforms. These systems are necessary if Brazilian production is to be increased from the current 2 million barrels / day to 4 million barrels / day in 2015 and 6 million barrels / day in 2020. It is anticipated that 50 production islands will be required by 2020; 50 drill probes; 500 offshore suppliers and 130 tankers. This task is to be mastered by the 52 shipyards currently active in this sector, 11 of which are still under construction. A total of workers are employed in the construction of 6.2 million GRT (gross register tons, unit of measure for the loading capacity of a ship), around 300 ships, 18 offshore platforms. Petrobras' business plan includes an estimated US $ 127.5 billion investment in development and production. In 2003, eight years ago, SINAVAL submitted a study to the ministers of the then President Luiz Inácio Lula da Silva, in which the rehabilitation of the Brazilian shipping industry was proposed. We have drawn attention to obvious facts. This document describes the special situation of Brazil, a country with 8,000 kilometers of sea coast, which transacts over 90% of its international trade via sea freight and which stopped building ships more than 15 years ago. In 2003, as now, the share of the ships flying the Brazilian flag in international sea transport was in the offshore segment, Petrobras recognized the lack of local capacities for the construction of ships as well as production and drilling platforms. For this reason, the decision was made to revive the Brazilian shipbuilding industry and, above all, to take advantage of the orders placed by Petrobras and Transpetro. Our President today, Ms. Dilma Rousseff, was Minister for Mining and Energy at the time. The shipyards planned to revitalize the shipping industry on three different levels: by building supply and tankers; the consolidation through the expansion and technological innovation of the shipyards; as well as planning the contracts for the next 10 years, including the construction of oil rigs on site. These steps have been taken. In the current situation, there was an increase in new direct jobs from two thousand workers in 2000 to the end of 2011. The production volume is 6.2 million GRT distributed among around 300 companies, which now accounts for 4% of the total volume of ships built worldwide. Brazil is visible in international statistics today. This positive development is the result of the industrial policy described by President Dilma on various occasions, because the shipping industry depends on public policies and the decisions of industrial, tax and financial policy. Shipbuilding has mastered important challenges over the past ten years. Shipyards have been redeveloped and become an important construction site for offshore supply vessels; 32 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

35 Platform P.51 in the Marlim Sul field in the Campos basin. Photo: Geraldo Falcão / Banco de Imagens Petrobras meanwhile tankers, container ships, bulk carriers and drilling rigs are being launched and preparations are being made to build probe ships that will drill into the seabed in deep waters. The challenges mastered were enormous. Training and qualification of staff took place with the support of various institutions such as the SENAI vocational schools and the program for the mobilization of the national oil and gas industry (Prominp), the Ministry of Mining and Energy. The shipyards have set up training rooms to train welders and other skilled workers. Local and state governments have promoted the training of skilled workers in various regions of Brazil. These efforts will continue as the shipping industry expects to hire more workers in the next three years, and the existing workforce of workers and skilled workers must be maintained. The incorporation of technological developments from different areas of knowledge plays an important role in increasing the local share in the completion of plants and systems for the construction of ships and oil rigs. Here the industry relies on partnerships with international manufacturers for the construction of such systems on site. In order to be able to achieve these goals in the area of ​​the compulsory share from domestic production, the SINAVAL union received tax breaks from the government on supplies to the shipbuilding industry. Decree No. dated grants an exemption from the industrial tax IPI for the supply of materials for shipbuilding and Law No. dated reduces the tax rates for the social security contributions PIS / PASEP and COFINS for shipbuilding plants to zero. SINAVAL has signed technical cooperation agreements with Spain, Argentina and the Republic of Korea, and intends to sign further agreements with countries interested in participating in these markets through cooperation with local companies. A system of financing shipbuilding and the establishment of shipyards by a merchant navy fund managed by the Ministry of Transport has existed for over 50 years. The financing is ensured by the development bank BNDES, the Banco do Brasil, the Caixa, the BASA and the BNB; they are federal banks in which the government has shareholder control. Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 33

36 Shipbuilding Industry in Brazil Timeline Most of the capital goods required for the extraction of oil from deep sea sources come from the Brazilian shipbuilding industry and it is an important part of the federal government's policy to expand the labor-intensive sector. These efforts are important to increase productivity, competitiveness and ensure sustainability in the sector. The goals of this movement are both the domestic market and the foreign markets. The fleet of ships flying the Brazilian flag, which secures sea freight along the coast, is to be expanded and modernized. A competitive ship repair and maintenance industry needs to be established to meet demand as the supply and tanker fleet continues to grow. The discovery of new oil deposits in extremely deep waters makes it necessary to build special ships for the development of the oil deposits. Supply ships for underwater work and for laying pipelines are being put out to tender. The major private and government banks are involved in these efforts. The pension funds participate in the capital of the company SETE Brasil, which will take over the management of the drilling ships and the oil production. SETE Brasil has the task of commissioning 33 probe ships from the local shipyards, which will be leased to Petrobras for the next 15 to 20 years. It is a government and Brazilian society project aimed at gaining a position in the global shipbuilding industry that reflects the economic importance that the country has achieved and at the same time, by creating jobs, meets the demands of the To meet the population for work and social progress. The SINAVAL union supports this project as a concrete measure for the benefit of the country's social and economic development. Critical resources Drilling ships for depths of more than 2,000m Supply and special ships Production platforms (SS and FPSO) Other ships (Jacket and TLWP) Source: Petrobras procurement plan (cumulative) Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

37 Challenge Local Content Otavio Carneiro, Alexandre Calmon (partner of the law firm Veirano Advogados) With this aim in mind, after the first round of auctions for the award of concession contracts to companies interested in the development of gas and oil extraction activities in Brazil, the Attempts to upgrade the supply of national goods and services in the licensed areas during the extraction and development phase. Over time, the ANP demanded firm agreements regarding the minimum share in the national business content, the actual share of which was henceforth decisive in determining the winners of the auction rounds of the Brazilian government. Few issues are currently attracting as much attention in the Brazilian oil industry as the so-called national business content (conteúdo nacional). The growing importance of the topic illustrates the change in the supervision practices of the obligations of entrepreneurs in the oil production and processing sector on the part of the Brazilian government, as well as the increased expectations for the development of a local value chain. The development of a local oil industry has always been a core interest of Petróleo Brasileiro S.A. Petrobras, although it was only in 1997, implementing government policy, was classified as a profitable area, and as a result of the opening of the market, the oil extraction and oil processing activities were outsourced to other national and international companies. When constitutional amendment number 9 weakened the state monopoly in 1995 and the Petroleum Act came into force in 1997, the national oil, gas and biofuel authority (Agência Nacional do Petróleo, Gás e Biocombustíveis: ANP) was founded, a federal self-government authority with the Order to regulate this sector in Brazil and to shape the strategy and development policy of the local industry, including its value chain, economically and technologically. In order to accomplish this, the ANP has the means to increase the required minimum share of national business content in goods and services, which must be taken into account in public auctions. The obligations of the ANP winners of the auction rounds set out in the concession agreements with the Brazilian government have generally changed over time, but more importantly, the supervisory practices of the ANP with regard to these obligations, in particular with regard to the minimum percentage of reinvestment through the use of goods and services, have changed Local value chain services. With regard to the contractual obligations of the concessionaires, they must offer the Brazilian suppliers who have bid open and equal competitive terms in their acquisition activities for the purposes of the concession, and then grant the national provider the curtain on the same terms. The concessionaires must also demonstrate that they meet the minimum required investment level in the acquisition of local goods and services during the extraction and development phases. At the moment there is even the contractually expressly stipulated obligation to make minimum investments in specific services and goods for each of the phases mentioned above. If the minimum percentage of offered investments in the acquisition of local goods and services is not complied with during the extraction and development phase, the concessionaire will be charged a fine to the ANP, which can be up to the total value that is the difference between the actually achieved share of local Goods and services and the contractually agreed minimum share. Up until the ANP's seventh auction round, the system of oversight for the minimum share of national business content was very flawed. To solve this problem, the ANP switched to a certification system that improved control over compliance with contractual obligations. A certification system for the national business content was used for this purpose, which includes four resolutions made by the ANP: (i) Resolution ANP nº 36 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 35

38 Regulation of certification of national business content; (ii) Resolution ANP nº 37 Regulating the determination of authorized bodies for the certification of the national business content; (iii) Resolution ANP nº 38 Regulations of the audits of the authorized bodies for the certification of the national business content; and (iv) Resolution ANP nº 39 Regulating the reporting of local investments. The introduction of the rules began with the entry into force of resolutions ANP nº 37 and nº 39, in September Resolutions ANP nº 36 and 38 came into effect in September. Accordingly, the concession contracts of the ANP stipulated from the sixth auction round that compliance with the obligations of the concessionaire with regard to the local acquisition of goods and services must be proven by certificates before the ANP. For this purpose, the concessionaires should demand such product certifications from their trading partners, whereby suppliers can proactively obtain such certifications in advance. The certification is carried out by the ANP qualified, registered test centers according to criteria defined by it, whereby the ANP has to implement a certification system for the examination of the national business content and to conduct the regular revision check of the registered test centers. With the new examination regulations of the national business content, the entire Brazilian goods and service supply chain, which want to supply the gas and oil extraction industry and the petroleum processing industry, including and especially the Petrobras, had to adapt to the requirement to certify their goods and services at the local registered test centers in order to prove the respective percentage with regard to such goods and services of national origin. At the same time, the ANP became even stricter towards the oil production and processing companies with regard to compliance with their contractual obligations in terms of national business content. As a result, the ability of the suppliers to certify their goods and services in every link of the production chain, as well as the respective achievable percentage of the national business content, has become a decisive competitive advantage. The situation is no different with regard to goods and services that come 100% from abroad. The development described above led foreign companies that wanted to use the growing opportunities of the Brazilian market, often at the request of customers already active in the country, to look for alternatives and structures that would increase the national share of their goods and services. It is clear that the search for national alternatives is growing exponentially, promoted by the unfavorable global economic situation and the various opportunities that are currently being offered in particular by the Petrobras investment plan, which involves investments of U $ 127.5 billion only for gas and oil production. and the company's petroleum refining sector in Brazil. The percentage of national business content currently required by Brazilian customers varies considerably depending on the type of service or product they are looking for and the extent to which it is possible to obtain such a service or product of national origin, but in principle the required percentage of national business content is around 65%, which represents a considerable challenge for the foreign supplier interested in the Brazilian market. The possibilities of overcoming this challenge vary according to the requirements demanded by potential customers and the type of products and services that are to be offered: For example, consider setting up local production through investment partnerships with local suppliers, or implementing Factories, our own assembly line operations in the country, or an agreement for the ordered processing by local companies. Finally, it should be emphasized that although this text deals with the rules that apply to the supply chain of the gas and oil industry, the dynamics described here hardly differ from the situation in shipbuilding, a sector that has countless other business opportunities in Brazil. For more detailed information, we list the electronic addresses of some institutional websites on the subject below: (i) ANP: (ii) ONIP: (iii) BNDES - Finame: bndes / bndes_pt / institucional / apoio_financeiro / produtos / FINAME_Maquinas_e_Equipamentos / 36 Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector

39 Specific needs Oliver Döhne, Germany Trade & Invest Brazil has big plans for the Pré-Sal. It is not only the extent of the exploration, production and processing of the new deepsea offshore sources that is impressive. The development of the relevant infrastructure and, in particular, the capacity and innovation requirements of the local suppliers are considerable. Market experts agree that due to the high demand and the enormous need for new technology, there is plenty of room for new players. Photo: MAN For newcomers, the Brazilian oil and gas industry is generally of interest where one of the following points is given: No domestic production Bottlenecks in local production High market concentration High need for innovation Critical goods A. No domestic production Various products are not or not yet produced in Brazil manufactured, for example very special goods with few possible uses and high sunk costs for equipment and test devices. Such products are often only manufactured at one location for the world market in order to achieve the necessary economies of scale. Another reason for the absence of local producers is the location costs, which are high in international comparison. According to the National Organization of the Petroleum Industry (Onip), there is still no local manufacturer in Brazil for around 40% of the equipment Petrobras needs. Although the Brazilian government's declared goal is to close all of these loopholes, Petrobras will have to continue importing many of these products for the time being until a competitive local supplier structure is established. At the same time, this means that those manufacturers, the Duque de Caxias REDUC. Photo: Geraldo Falcão / Banco de Imagens Petrobras Oil & Gas Brazil Business opportunities for German companies in the Brazilian oil and gas sector 37