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Interview

Nelson Leite, President, FMC Technologies Brazil

Nelson Leite, President of FMC Technologies Brazil, speaks about subsea technologies, how FMC do Brasil is promoting advanced oil recovery and gives his opinion on what Brazil could do to be more attractive to international oil companies citing that, “Brazil must create the commercial support system that ensures Brazilian opportunities are appetizing, not just palatable for these international players.”

 

What does Brazil mean to FMC Technologies; what hopes do you have for this market?

FMC Technologies in Brazil has a long history; the first contract that the company signed here was in 1961. Currently, FMC Technologies is a market leader and has a strong presence in the country. This is demonstrated physically by the company’s investments here, such as our technology centre and our plant capacity. Brazil is a strategic priority, which is why the company has committed sufficient investment to ensure its growth in the Brazilian market. Brazil is a unique location, because of the scale of the pre-salt resource and the technology required to realize this opportunity, ultra-deep water challenges make advanced solutions a necessity.

Could you give us some further details as to what FMC Technologies is doing to advance the knowledge base offshore? What are key technologies for the company?

FMC Technologies has a contract with Petrobras to develop specific technologies, and is pursuing these technologies in line with the company’s longer-term vision at our technology centre. This vision is principally focused on moving engineering systems from above the sea to beneath it—subsea systems are our priority.

Subsea systems were born in Brazil. There was a great deal of technology developed here in the 1970’s and FMC Technologies seeks to demonstrate that this legacy of excellence continues. With the opportunities offshore, there are significant openings for mounting a greater deal of equipment on the seabed, which should make operations more efficient and cost effective.

How important is technology facilitating advanced oil recovery to FMC Technologies’ ambitions?

There are green-field and brown-field sites and the latter is far more difficult to produce oil from, frequently involving filtering a great deal of water from the oil reserves. The future of the fields depends on producing more oil in fields containing an ever-larger store of water. It is one reason why producing cost efficient separation technology, parting water from oil, is so important. FMC Technologies is developing such technology together with Petrobras. Along with boosting extraction of oil, a number of technologies are central to subsea works. Pumping, and subsea construction techniques are very important to advanced oil recovery—they should be seen as key areas for investment in this respect.

Is technology the limiting factor on Brazilian offshore production? What other factors stand in the way of realizing Brazil’s offshore targets?

New technology is critical to maintaining growth, it is clear. However, at the moment, Brazil’s priorities should be to start production from the existing discoveries and increase production from established wells. Technology is a support, and can assist this process, but key to Brazil’s fortunes are increasing the areas under auction, attracting further investment.

At the moment Petrobras is a key player in realizing these factors but IOCs offer further investment as well as novel experience and I would argue that encouraging the participation of more IOCs in the Brazilian market would be of great benefit in realizing the country’s ambitions for production. For example, I think the involvement of IOCs together with Petrobras on the Libra field is an excellent development, a strong consortium because all these players will bring their own experiences to the table; new technologies can and will assist them in achieving their aims.

Do you consider that participation in the market is growing too slowly; what can be done to make this market more attractive for IOC’s?

For sure, something has to be done. Brazil must create the commercial support system that ensures Brazilian opportunities are appetizing, not just palatable for these international players.

The supply chain is another key challenge for Brazilian offshore hopes. The supply chain has to grow, in a manner that demonstrates that it can provide required parts and services safely, at low cost, to high quality and on time.

Petrobras is talking up the Brazilian market, and certainly the opportunity is there. But for international players, do you think there is a gap between expectations and the reality they face?

For sure some players are far more engaged with the pre-salt than others. How policy encourages the rate of uptake of the pre-salt opportunities is a question which hinges on attracting investment, which in turn influences the capacity of the industry to develop within the hoped for timescale. If I were to choose two things thst need to be improved to ensure that success can be attained, it would be the supply chain, and human resources. Providing and developing people and the supply chain quickly enough is key to accessing Brazil’s resources in their entirety.

Would you agree with the statement that local industries do not compete with international businesses in terms of quality?

I do not agree. It is frequently difficult to find a good supplier, not just in Brazil. I would also point out that Brazil now excels in several industries, such as in the automotive and aeronautical industries. Bringing skills and talents like those developed in these enterprises to the oil and gas industry is a notable but not insurmountable challenge for developing Brazil’s industrial capacities. There are many small suppliers in Brazil, and their contribution to the diversity and availability of parts is to be welcomed in this market. One further positive development however, would be if they were prepared to deliver in high scale, as well as if more complete unit final products were produced. This would reduce the number of operations that are required to receive a desired final unit, ready for integration into a production chain. Having more advanced production and financing schemes for goods would be a great boon for Brazilian industry.

Last year, FMC Technologies signed a $1.5 billion dollar deal with Petrobras. What were the unique qualities that caught FMC Technologies this contract?

FMC Technologies has around 60 years of experience in the Brazilian market. In that sense, the company was born together with Petrobras. One has to understand the market, and to know what the market needs; FMC Technologies’ grasp of these concepts is what makes Petrobras so sure that FMC Technologies can deliver the services and goods they need—they know FMC Technologies is capable, and up to the challenge. This resulted in a huge order related to the pre-salt deposits for FMC Technologies, including a large quantity of manifolds, which FMC Technologies will provide to Petrobras.

At the moment, FMC Technologies dominates the manifolds market, but you must have ambitions to grow further, and into further sectors. Can you illustrate how you plan to achieve this?

Any company must have an ear close to the ground to listen carefully for developments in the market. Understanding what a customer needs in the future will equip a company with the information that will ensure success tomorrow. For sure, execution of business plans must be effective, safe, on time and to a high quality, but planning for future trends is vital to ensure continuing growth.

What would be your ideal project?

Subsea processing and separation are very attractive. If one looks at all the fields, all the wells will produce less, yet recovery can be increased through subsea works. At the moment, recovery rates can be in the range of 30 percent. Increasing this to 45, or even 50 percent therefore represents a huge opportunity. Pumping and power, as I mentioned, are key areas to make this a success. Linking subsea wells can have a great manner of benefits, including making pressure management easier.

These subsea processing projects are not uncommon. The pre-salt resources require these services in abundance. Petrobras forecast $1.5 billion dollars of demand for subsea trees—the demand and scale is certainly there for the subsea market.

What do you envisage in the next ten years for the subsea market?

It depends on the development of Libra, on the arrival of more IOCs, and on the government’s success in establishing regular auctions. With auctions, there are opportunities for development and the openings for supplying goods and services that arise from expansion of the resources available for extraction.

Increasing business development will drive growth across the sector. FMC Technologies has faith in the Brazilian opportunity: the resource is there, and it can be developed. Nothing is guaranteed however, so FMC Technologies will have to continue to be alert to our customers’ developing needs.

 

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

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