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Interview

with Luiz Fernando Bassani Dias , Managing Director, Frank Mohn (Framo) Brazil

01.09.2010 / Energyboardroom

Frank Mohn AS has been in the country for many years, but established a proper subsidiary in 1999, Frank Mohn do Brasil Ltda. Could you come back on the history of the company in the country, and how the development of the domestic oil and gas industry has affected the growth of your company?

Frank Mohn AS (Framo) has for more than thirty five years, supplying hydraulic pumps for the transports and logistics branch of Petrobras, Transpetro, which at the time was Fronape. We have today about five hundred and forty pumps divided among many clients, and this has been the case for many years. When I finished university and did my first internship for Verolme do Brasil Shipyard, we were working for Fronape, and already used at the time Framo products. At the time, Framo was represented by non-exclusive agents in Brazil, which means they also were agents for other companies. When I left the shipyard, I started working for this agent, and we realized the potential market for Framo. The companies decided to increase its presence in Brazil, and make people in the industry discover that Framo could go beyond hydraulic pumps for the marine industry. We entered the offshore market with Petrobras, offering different pumps as well as oil recovery equipment. Our presence as agent increased little by little, and we had to contract engineers to support the service operations here, up to the point that the decision was taken to open the subsidiary Frank Mohn do Brasil Ltda in 1998.We officially started operating as such in 1999, even though we had already started moving forward beforehand.

We grew our offshore unit division, where we today have a service area manager and eight service engineers.

Framo group has participation also in a subsea company called Framo Engineering, which is also partially owned by Schlumberger. Based on this we created Framo do Brasil Subsea division, where there is one engineer working. This department has already been awarded contracts for subsea injection pumps as well as subsea multiphase pumps for Petrobras. It was the first time Petrobras used this kind of equipment. We managed to secure a contract for a first subsea injection pump system (RWI) for Albacora Leste oil Field and also for a multiphase pump system (MPP) for Barracuda. RWI was delivered already and MPP will be delivered at the end of the year. Framo has been recognized as a reliable partner.

To give technical support, we need to increase the number of service engineers we hire. It is difficult to find trained employees in Brazil. For example we have engineers who started as trainee for two years in our office, were then sent to Norway for three years, and after that come back to Brazil fully trained and with a high level of technical skills. Therefore once we have found the right people, it is difficult for us to move our activities to other cities far from Rio de Janeiro or Niteroi – where we are looking for opening facilities now – as these people might not want to follow us there and increase their commuting time. Today part of my job is to analyze which direction to give our company to support its growth and how to find the appropriate resources.

How do you manage to explain to Norway that operating in Brazil is different from the North Sea?

There is a big lump that all foreign companies need to do. As a State Company, Petrobras is a very bureaucratic company, with its own internal procedures and following a strict regulatory framework. Everyone works with Petrobras, even indirectly, and so have we! Framo was just awarded two direct contracts by Petrobras, and we will pay close attention to these contracts in order to keep a strong relationship with the NOC. Every foreign company should have at least one Brazilian national to make them understand the culture, language, the way of working, etc.

When I was working with Verolme, I was responsible for the vessels design department and technical sales, and I was dealing with Norwegian, Indian, Chinese, French, and others foreigner. I worked in Holland also and understood that each country brings a different experience and culture. Today some guys come here and don’t want to learn about the Brazilian culture or try to speak Portuguese, and that’s when they lose it! Some are more eager to learn than others. We had some internal fights about this during my time working to Verolme, and people need to accept this difference or leave.

Given the boom of the Brazilian market in the past years, where are there the most opportunities for Framo to develop?

Framo is dedicated to the marine – with cargo pumps mainly – and to the offshore with dedicated pump system equipment.
The Brazilian shipbuilding industry has had ups and down, and it is now going up again. Petrobras had not contracted any vessel for a long time, and the marine activity slowed down heavily. All of a sudden with the new oil discoveries, the offshore segment started picking up, FPSO were ordered etc. Framo saw the marine segment decrease in the past, but recognized opportunities in the offshore division. A few years ago, with Transpetro PROMEF 1 and 2, the marine activity started increasing, getting Framo possibility of more contracts. I believe that more contracts are to come, and that we will soon see a boom in both marine and offshore segments. In parallel Brazil has developed from some years ago a National Contingency Plan, that is to be strengthened given the issues with BP Deepwater Horizon, and this will give us many opportunities to work in the future. An issue that we face is the Brazilian content asked by Petrobras. Brazilian workforce and operations can be more expensive than elsewhere in the world, and there is a strong pressure on price coming from the market, so we have to find Brazilian sub-suppliers that are technically competent and price-competitive.

Talking about local content, what is Framo’s approach?

One of our intentions when starting Framo do Brasil was to become strong enough to take care of Framo equipments and to have our own Mechanical Shop facilities to service support equipment in operation and to assemble new equipment here. We want to stay in this country in the long term, but it takes time to put into place activities with some percentage of local content required.

What does Framo represent in Brazil, and what is the company bringing to the local oil and gas industry?

Framo’s biggest market used to be the North Sea, that represents the UK and Norway, but today Brazil is overtaking them and is becoming a big market to Framo also. This market is mostly formed by Petrobras’ demand.

Everything used to be done by Norway, but today we have formed people and have local engineers. We are injecting money in Brazil through our investments, and over the past two years we have doubled our work force. The idea is to have in Brazil our headquarters for South America.

Brazil is internationally known for its environmental protection. How does Framo have to adapt its equipment to fit with the country’s high requirements?

Years ago Framo has developed equipment called Transrec, in collaboration with the Norwegian environmental protection authority – NOFO. Thanks to this early thinking, we do not need to adapt our technology to Brazil, and it fits the highest requirements any country could have in terms of environment and safety. For example BP is using some of this equipment today to face its issue in the Gulf of Mexico.

What are your ambitions for Framo in the short term, and what would you say about Framo’s commitment to Brazil?

In the short term we want to invest to increase the Framo do Brazil facilities to offer better support to our client at Brazil and South America countries, offering our equipment and services. Framo is prepared to deliver to Brazil! There is a big market and after many years presence here in contact with our clients, certainly we know how deal with them.

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