Brazil urged to be more than an oil exporter

The outlook for oil and gas exploration and production (E&P) in Brazil is positive but the country must prepare itself to be more than a crude producer and exporter. 

That is the view of Telmo Ghiorzi, executive president of the local oil and gas services association Abespetro. 

"We’re absolutely optimistic. All the indications we have, in terms of increased demand and investments by Petrobras and other oil companies, are that we’ll have more activity and employment," Ghiorzi told BNamericas. 

"But that's the basics for us. The challenge now is to turn Brazil into a major exporter of complex industrial goods and services." 

Today, Brazil is a recognized hub for the production and export of underwater equipment, such as wet Christmas trees.

That, however, was not the result of coordinated actions between the State and companies. "It was an isolated heroic event," said Ghiorzi.

He believes that Brazil could be an exporter of subsea manifolds and risers, well equipment, modules and equipment for FPSOs and rigs, among others. 

"The important thing is to change course and adopt export strategies, instead of just trying to meet domestic demand," he said.  

Ghiorzi warned that the traditional producing basins, Campos and Santos, will sustain E&P until 2030. After that, if there are no major discoveries, production in the pre-salt should begin to decline. 

"That's why it's very important for Brazil to be able to export industrial goods and services. Even if there is no demand here, there is in the world," he said, adding that exploration in the Equatorial Margin could help compensate for the decline in the southeast. 

Another Brazilian challenge is the labor bottleneck, given the heating of the market and lower unemployment. 

"There’s an increase in voluntary turnover, when people change jobs to get better pay, but that's a problem that's good to solve. The hard part is not having a project," said Ghiorzi. 

PETROBRAS PAYMENTS

On Friday, Petrobras announced that it will reduce the payment period for suppliers to 30 days for contracts to be implemented as of May 1.

Since 2020, companies in some segments had been receiving payments within up to 90 days. 

The change will impact contracts for the operation and maintenance of industrial units (onshore and offshore) and also those that support administrative activities.

According to Ghiorzi, the state oil producer's announcement is good news because it improves companies' cash flow and increases competition. 

"It also signals that Petrobras is adopting even more positive, win-win strategies with its suppliers," he said. 

"The measure could be a precursor to others, making the chain more competitive and so favoring suppliers and Petrobras at the same time."