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Interview

with Maria van der Hoeven, Minister of Economy, Ministry of Economic Affairs – Netherlands

20.09.2010 / Energyboardroom

In his introduction speech for Rio Oil & Gas conference yesterday, Mr. Haroldo Borges Rodrigues Lima – President of ANP – highlighted that today Brazil should avoid the so called “Dutch disease”. To what extend can the Netherlands and Brazil work together to avoid that the latter becomes an oil cursed country?

Of course Brazil has very large reserves, especially since the discovery of oil in the pre-salt areas, which will make of the country the tenth largest oil producing country in the world within the next few years. However the energy matrix is different from the Netherlands, especially when you look at Brazil as a world leading producer and exporter of ethanol, with cutting edge technology in terms of biomass, which is why I believe that the Netherlands will not have to advice Brazil on how not to become an oil cursed country. However the important aspect to understand is that every development is done based on money, and this money in Brazil will come from the development of the oil reserves. That is where the Dutch model as we have developed over the past years might be of interest. People from the Brazil are visiting the Netherlands, but also Norway for instance, to learn from these models, and adapt the model into something useful for Brazil.

What is the Dutch government doing to support its national companies established in Brazil to support them in their path to become not only strong business partners but also involved in the local communities?

We organize missions, such as the one I am currently a part of, accompanies with twenty one Dutch companies that are present at Rio Oil & Gas conference this year. These companies have to forge their own experience, and they settle in Brazil by their own initiative, but we organize have decided to put together a Dutch business support team, organizing seminars etc. The next example is the coming seminar on biomass and biofuels in Sao Paulo conducted by both Brazilian and Dutch experts, supported by the Dutch government within the framework of what President Lula and the Dutch Prime Minister signed two years ago.

We have discussions about how to make local content really work, solve issues such as import duties, transparency, and optimum speed to get a visa etc. These issues that are raised here, I take good note of them and try to find the appropriate solution.

What is very important to me is that Dutch companies have to get themselves known in Brazil, find the right contacts and establish the right network. Doing business with Petrobras is crucial in Brazil, and if a company wants to do so, it will not only need a good product, business and story, but also to have the relevant network of contacts. That is where we can – through these missions but also our embassy – support these companies, but they also have to make sure Brazilians know them.

Shell and Cosan, or the Port of Rotterdam and the Port of Santos are examples of successful collaboration between the two countries. However nationalities such as the Norwegians or the British seem more present in Brazil than the Dutch. What is missing to make of the Netherland a strong partner for the Brazilian economy and vice versa?

There are some more deals with Maua shipyards, and Dutch companies such as Fugro or Dockwise. But of course collaborations such as the one between Shell and Cosan are very important not only because of the size of both companies, but also because it brings us to the next level in terms of biomass, reaching a second generation of biomass. Petrobras itself decided to have an office and a factory in Rotterdam.

I think that more could be done, as always, but it is important for companies to know the needs of each country and where they can find this expertise. For example there is a huge need in Brazil for expertise in the pre-salt areas, and if the country wants to develop these resources at the pace it intends to, it will need foreign investment and foreign companies with their technologies and people to help turning that idea into reality in the time frame defined by Brazil.

Petrobras opened its first office in the Netherland in February this year, at a time when Petrobras announced to spend only five percent of its investment budget by 2014 in foreign activities, why such an interest from the Brazilian NOC in the Netherlands?

That is a clearly strategic position! Rotterdam is developing into an interesting an important port when talking about biomass and energy related industry. It is clear to me that it was the right place for Petrobras to be!

The Netherlands can especially benefit from Brazil’s expertise as the largest producer and second exporter of ethanol to develop their own biofuel sector. How will it benefit the Dutch economy and where can Brazil help your country strengthen its expertise in this field?

Several aspects are interesting to us. First of all Brazil decided forty years ago to use ethanol as a transportation fuel, promoting the use of so-called “flex cars” where one can use natural gas, ethanol, fossil fuel or a mix of all. Secondly Brazil is extremely active in the new generation of biomass, where any waste could be used in the future. We also have to agree on sustainability criteria, not only for the Netherlands but also at a European Union level, which means that we have to discuss where the real problems are. I know of numbers of joint initiatives in terms of second generation of biomass between Brazil and the Netherlands, and I am sure they will lead to successful developments in the coming years.

What do you expect from your trip to Brazil, and what is at the top of your agenda today in terms of bi-lateral economic relationships between Brazil and the Netherlands?

I would like to see more Brazilian companies coming to the Netherlands, and more Dutch companies in Brazil. I will attend on Thursday a seminar organized by NFIA – the Netherland Foreign Investment Agency – in Sao Paulo where about a hundred Brazilian companies will be present. The Brazilian economy is very strong, represents a huge market and it will become one of the strongest economy in the world during the course of the next decade.

Some Brazilian companies already found their way to the Netherlands, such as Braskem, and Petrobras as the last entrant. It is important to show Brazil the importance for them to be present in the Netherlands, using the NFIA support unit in Sao Paulo. I hope that the Netherlands will become the gateway to Europe for many more Brazilian companies. In terms of financing, it will take time but investing in the Netherlands is investing in the future.

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