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Interview

Renata Pereira, Executive Director, BRASCO, Brazil

03.04.2014 / Energyboardroom

Renata Pereira, Executive Director of Brasco, talks about the inherent challenges in building a logistical hub, the opportunity that Brazil‘s natural offshore resources represent for the company stating that, “BRASCO is constantly monitoring the market, and anticipating where new openings will appear.”

 

What is Brasco doing to mitigate any bottlenecks created by the quality of Brazilian infrastructure or transport delays be it over sea, by road, or by air?

BRASCO’s geographic reach is one of the company’s principle advantages as our enterprise is well positioned across Brazil’s provinces, and has the base here in Guanabara Bay and sites in San Luis (since 2008), which is another location well placed to serve new oilfield developments.

Another location is in Salvador, Bahia. BRASCO is constantly monitoring the market, and anticipating where new openings will appear. The company is already positioning itself to pick up the greatest market share from the 11th round of auctions. It is a manner of business drive, and having the proper competencies to deal with customer demands as they arise.

Briclog was acquired by BRASCO last year in July, tripling the company’s capacity to service vessels in this area. What’s the real strategy behind expanding your physical base into Rio de Janeiro?

The Guanabara Bay is of high strategic importance in terms of location for its ability to support pre-salt developments, both in the Campos and Santos basins, especially the areas currently under development. Brasco already had a good position, here in Niteroi, complete with three berths, which were already operating at full capacity. Indeed, all indications were of demand continuing to grow in terms of operations serving our existing clientele, some examples of which are Statoil, Shell, Anadarko, Chevron and Total. Brasco needed to find further opportunities to grow, and did so through this new acquisition, which is now titled BRASCO Caju.

The company is now investing around 44 million USD in this terminal and the company’s expectation is for growth driven by our core competencies. BRASCO builds all its customer value proposals on top of a record of excellence in Health, Safety and Environment (HSE) orientated work practices.  Briclog will allow BRASCO to grow and further demonstrate high a standard of work in this manner.

How do your three bases in the Guanabara Bay support each other; how do their operations compliment the work of the others?

These sites collectively allow for much more efficient use of overhead resources. The sites provide each other with contingency options, in the event of an unforeseen setback. In principal, clients will be served by single sites, and the new facilities we have will be used to attract and serve new customers.

In which way do you think the private sector can provide better solutions to the public sector; what is BRASCO doing to contribute to this?

BRASCO has a legal structure that enables the company to invest in proper infrastructure. It is a matter of putting together a comprehensive business plan and locating new sites. There are no barriers in terms of legislation to private companies like BRASCO taking the initiative and investing in their own infrastructure and sites. The key to this issue is finding the proper location, with access to hydrocarbon resources to be explored. Unfortunately, the market suffered greatly with the break in the issuing of further concessions at auction. In the meantime, areas suitable for development, be it for direct or indirect use in supporting the oil and gas industries, have experienced substantial price increases.

For this reason, BRASCO delayed its investment because extensive CAPEX must be justified before outlay on infrastructure goes ahead. A proper business plan, and means of execution, must be determined before any private sector entity pursues a course of action involving extensive construction of infrastructure; however, once one is formed, commercial organizations are highly effective in pursuing this type of development.

Statoil, Chevron, Anadarko, and Petrobras are amongst your biggest customers. What solutions are these customers seeking? How is Brasco best placed to address these demands? What is your strategy for building market share and securing relationships with current customers?

These customers demand HSE excellence in the services they receive. BRASCO stands out in its performance in this respect. Ultimately, all BRASCO’s services—be it logistics, material handling or loading/unloading vessels—must be performed with HSE excellence. That is a top priority, and everything comes from that; BRASCO’s management style is built to deliver this. This means reliability, safety and security, accredited through all the benchmarking standards, are apparent throughout BRASCO’s operations, which greatly reinforce our long-term relationships with our clients. BRASCO, with a diverse client list has ensured that as a company, its best practices reflect the needs of all its clients.

To maintain this, BRASCO continually invests in new innovative working practices; for example, at the moment, the company is putting a great deal of effort into developing an environmental services operation, from tank cleaning to paperwork management, which is crucial to companies seeking to continue their operations. Brasco retains a fully equipped team to ensure that this becomes a benchmark product.

Furthermore, BRASCO invests strongly in technology, such as an offshore logistics platform, which monitors the full supply chain, from a unit’s position in a warehouse to its point of use. Radio tags enable constant monitoring of the location of any unit in Brasco’s care. This has increased Brasco’s efficiency from around 70 to 90 percent within the last two years. This has cascading advantages, allowing us to have a faster turnaround of visitors in our quay, and thus serve more customers.

Currently around six percent of working hours at BRASCO are dedicated to training, and this care of our staff means our employee turnover is less than three percent.

The pillars that BRASCO’s business plan stand on are: investment in human resources, investment in technology, and investment in environmental services. Together, prioritizing these features of BRASCO means we will continue to be the preferred partner of choice.

Petrobras operates uniquely, compared to other companies, in that it hires boats for specific purposes—i.e. one boat transports cement to many platforms, rather than using boats flexibly, as is common practice in the North Sea. How else does Petrobras’ mode of operation affect your business?

Petrobras can segregate its operations in this manner; it is one of the few companies who have the scale to do so. This is actually an efficient model for Petrobras, as they have so many vessels and a huge network of supply options. Statoil, operating Pelegrino however, does not have the same opportunity as it is constrained to running vessels to one production unit. Costs to their company, for this reason, are prohibitively high to use anything other than vessels that are flexible in their roles.

Petrobras’s model makes it harder for a vessel to move from serving the state-controlled giant to operating for an IOC. A vessel built to serve Petrobras is frequently bound into operating for Petrobras for life, though this is not a problem, because Petrobras’ demand is such that vessels are highly likely to receive work for a long time, particularly Brazilian flagged vessels.

In terms of logistics bases, the only difference is created through Petrobras’ tendering model. This tender system is demonstrative of the fact that Petrobras is constantly looking for the lowest priced operator.

A final way in which Petrobras operates unlike other oil companies is that they typically use their own facilities, and contract operators, to provide manpower and equipment for use at the Petrobras facility. This is not like BRASCO’s business model, which sees customers serviced in our own multi-client terminals.

What are the technical capabilities that BRASCO offers that set the company apart from competitors?

BRASCO’s terminals see constant investment. Last year, we acquired new cranes and we have a robust maintenance plan to ensure smooth uninterrupted operations. In the last two years, we have invested nearly 1 million USD in maintenance alone. This is part of BRASCO’s belief that our facilities, here at our private terminal, should be state of the art.

As a listed company, being part of Wilson & Sons, BRASCO is highly attuned to regulatory requirements and has all the certifications from the market, such as ISO 9001, 14,001 and is regularly audited by various government agencies. BRASCO adds to this process of constant evaluation by undertaking regular audits of our own performance too; in this way we ensure our technical capabilities are top of the range.

By 2020, Brazil will have become the sixth largest producer of oil in the world, according to the IEA rising from 12th at the moment. What is BRASCO doing to deal with this change of pace?

One of the most recent actions is this acquisition of Briclog. Subsequent developments at this site following the takeover have just started; civil works there are in a very early stage of progression at the moment. BRASCO is anticipating further expansion in the North and Northeast of the country, in addition to our operations in San Luiz bay, which will enable BRASCO to support the Foz de Amazonas and Ceara basins.

What do you see as the role of the logistics industry in assisting Brazil achieve its oil and gas development dream; what would make it easier for the logistics industry to have a greater positive impact?

I think it will be a key part of realizing Brazil’s ambitions, particularly with the latest developments, a proper logistics chain is vital to realizing the full potential of this resource. Efficient transport in larger vessels, over longer distances, needs to become the norm. The more Brazil can develop truly coordinated supply chains, from site of production to point of use, the better for Brazil’s ambitions.

Having one full sector provider is key for oil companies whose primary purpose is to produce oil, not direct logistical supply. This is BRASCO focusing on becoming a full-service provider.

An important factor, which will enable not only Brasco to achieve its aims, but the wider oil and gas industry to reach its objectives, will be the regularity of future bidding rounds. A frequent and predictable framework for each subsequent bidding round will be a significant health boost for companies, reducing risk and ensuring the industry has the fuel to grow and mature.

 

To read more interviews and articles on Brazil, and to download the latest free report on the country, click here.

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