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Interview

with José Sergio de Oliveira Machado, CEO, Transpetro

02.09.2010 / Energyboardroom

The Brazilian shipbuilding industry is like a phoenix, rising out of its ashes; What would you tell today to anyone who believes that you have missed out on too many years of development and cannot be competitive anymore?

We want to strenghten an already experienced industry by giving the priority to any company who would build its vessels in Brazil, using 70% of national content, and, after the learning curve, to be competitive at world level. So we are recreating the naval industry by speaking the world’s language, which isn’t Chinese, it’s not Korean, it’s not English, it’s not French and it’s not Portuguese, it is competence. So our industry is being reborn to be a competent and competitive industry. We are already today the fourth in oil tanker contracts in the world and, with respect to two typical oil tankers, which are the Suezmax and Aframax, a Brazilian shipyard already has the world’s fifth and sixth largest portfolio of contracts. So the industry, if compared to 23 years ago – we have retaken the lead and Brazil today has a great advantage after doing its homework, which is that we have demand and financing.

Transpetro is working a lot with the development bank, the BNDES, would you say that financing was only the last thing that Transpetro really needed to become internationally competitive, or is there something else missing to be at the same level as Korea?

No, we have delivered only two ships of our orders, we are doing our homework. We first took care to consolidate our talent in the fourth and fifth generation – we did that. So today we have a ship, or a plane, or a shipyard with the same technical conditions of a Korean shipyard. And the Brazilian worker only needs opportunity; he learns easily and becomes productive. And we have a series of favorable production cost factors in Brazil. So, the objective of the naval industry is not to make ships, but the objective of the naval industry is to go to the podium of the naval industries of the world.

In terms of realizing the ambition of President Lula, what is the role of Transpetro to really support Brazil and make it again a strong country on the international scene?

Brazil today is living today in its century of luck. We did our homework with a lot of zeal and willpower. We recreated democracy; we undertook structural reforms and had the luck of preparation meeting opportunity. We came upon a multi-polar 21st century, and the emerging countries are the engine of the world, Brazil being among them.

Nature has given us all that the world needs, we have all types of energy and with the discovery of the pre-salt, we have become an oil power. We have hydroelectric energy, wind energy, renewable – our energy grid is 50% renewable – we have 14% of the world’s drinking water and 182 million hectares of land and grass to produce food, and we have many natural resources and then we find a world, the emergent world, going through a pretty intense urbanization process, which is the case of India and China.

Those undergoing rapid urbanization need what? Food and infrastructure. We are ready to provide that, and, for those who can be competitive, they must have efficient logistics. So we come back to our competitive and strong naval industry to occupy this space. This is why we are living in a century of luck. And this is why President Lula is leading a country that is today respected in the whole world, a country whose GDP will grow over 7% this year, a country that restored hope to many Brazilians.

There are 120 Brazilians working in a shipyard in the South Atlantic – who had lost hope of Brazil and had gone to Japan believing that was where hope lay. But with the news of Brazil, they came back and are now working in the Brazilian shipyard. Like them, others have had the opportunity of their first job, so today through our PROMEF program we employ 15 thousand and we will create 40 thousand more jobs. This is a Brazil that reemerges with strength and worried about economic and social development, which is why there are so many people ascending in class in Brazil, more than 30 – millions of people. And we have everything the world needs, we are a democracy, we underwent structural reforms, we are a country with an enormous territorial extension and we have almost 200 million inhabitants, and we know what we want, we know that the wealth of the world has not disappeared, it will change hands, and surely, one of the hands that it will fall in will be that of Brazil, and we are preparing for that.

As a last question, what would you say to our readers, international investors in the oil and gas industry, what should they expect of Transpetro?

What I always say, not only of Transpetro, but also about Brazil, is that we want to have a competitive industry, modern – we will arrive at the future in anyway possible. If we have partners that want to play with us the win-win and half-half game, we can arrive at the future earlier. So we are open to partnerships, to people that want to join forces investing in Brazil. The pre-condition is that the investment be made in Brazil; that is the basic condition. I would say to your readers what I’ve repeated out there: whoever is thinking about Brazil, it’s now or never.

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