- Development & Aid
- Economy & Trade
- Human Rights
- Global Governance
- Civil Society
Friday, December 3, 2021
RIO DE JANEIRO, Sep 30 2011 (IPS) - So far in Brazil, the “curse of oil” is only apparent in the political sphere, where Congress is divided about how to distribute the country’s increasingly large oil earnings. But in the meantime the recent discoveries of offshore reserves in the Atlantic ocean are breathing new life into the shipbuilding industry.
The prospect of doubling oil production from the current 2.1 million barrels per day (bpd) over the next decade when crude reserves below the “pre-salt” undersea layer come onstream is fuelling growth in activity in ports and shipyards.
In the 1970s, Brazil had the second largest shipbuilding industry in the world, but it later went into a steep decline from which it has only partially recovered in the last decade, said Sergio Leal, the executive secretary of SINAVAL, the national shipbuilding trade union.
The industry directly employed 56,368 workers as of June, well above the highest job levels in the past, without even counting close to 28,000 workers in the leisure boatbuilding industry.
Analysts particularly highlight the large number of indirect jobs, because of the lengthy production chain: an offshore oil platform is made up of thousands of components and takes over a year to build.
Brazil’s order book for oil platforms “has already put it back in second place” worldwide, said Leal at Pre-Salt Brazil 2011, an international congress of the business community, authorities and experts held Sept. 26-28 in Rio de Janeiro.
With the discovery of huge pre-salt reserves, Brazil’s oil and gas reserves may be multiplied five-fold. Previously struggling for self-sufficiency in oil, the country now has the potential to become a net exporter.
But the oil is more than 300 km off the coast and 7,000 metres below the ocean surface, beneath a thick layer of salt, sand and rocks. The challenge of exploiting it, and a policy favouring national production of the necessary equipment to do so, have boosted the shipbuilding and offshore industries.
The policy dates from 2003, when the government created the National Oil and Natural Gas Industry Mobilisation Programme (PROMINP) to strengthen the domestic production chain for the sector.
The following year Transpetro, a subsidiary company of Petrobras that undertakes transport and storage of oil and gas, announced it was expanding its fleet with 49 new oil tankers with a minimum of 65 percent national components – which rose to 70 percent in the second phase, from 2008 – and a total investment of 4.6 billion dollars.
A general rule insisting on local components was introduced in 2005 under a resolution by the National Petroleum Agency (ANP), the industry regulator.
The Brazilian shipbuilding industry, formerly based mainly in Rio de Janeiro, has expanded to other locations.
Porto de Suape in the northeastern state of Pernambuco is now the leading shipbuilder in terms of gross tonnage, with a large recently installed shipyard which is already building many oil tankers, although Rio de Janeiro offers twice the number of jobs and more diversified production, said SINAVAL’s Leal.
Another centre is flourishing in the far south of the country, in the state of Rio Grande do Sul. Two shipyards are in operation and another two are under construction close to its main port, creating excellent conditions for making the most of the opportunity presented by the pre-salt oil reserves, according to Vanderlan Vasconcelos, head of the local Superintendence of Ports and Waterways.
The state already had a well-developed metallurgical industry comprising 2,100 companies as well as 167 electronic companies and 300 firms dealing with onshore-offshore supplies, most of them located on a 758 km waterway that provides good connections to the port of Rio Grande and the shipyards, he said.
Furthermore, local lagoons and rivers could be connected into a 1,530 km waterway network in the Southern Common Market (Mercosur), contributing to the economic integration of Brazil, Argentina and Uruguay – which make up the bloc together with Paraguay – he said.
Another advantage of the port of Rio Grande is its comparative proximity to South Africa and Asia, said Wilen Manteli, head of the Brazilian Association of Port Terminals (ABTP), in contrast with Suape which is more convenient for Europe and the United States.
“The life-cycle of the pre-salt oil fields will be at least 30 years,” according to Aloisio Nóbrega, vice president of the Rio Grande do Sul state development and investment promotion agency, AGDI. Therefore the “oceanic industry”, as he prefers to call the offshore oil sector, is a priority for the state government.
Not only shipyards, but also the long production chain will benefit from Brazil’s second largest metallurgical industrial park after Sao Paulo, possessed by this southern state, Nóbrega argued, adding that the area enjoys a better quality of life, and has a market of 11 million people.
The pre-salt oil and gas fields, far off the southeast coast of Brazil, cover an area 800 km long and 200 km wide. Exploiting them “will require new, more efficient ships, and specific equipment,” said Fernando Fialho, the head of the National Agency for Waterway Transportation (ANTAQ).
In spite of Brazil’s mushrooming ports and shipyards, even greater and more urgent efforts are needed, because infrastructure projects take a long time due to the need to apply for environmental permits, plan contracts and arrange the necessary financing well ahead of time, he said.
The need to train workers on a mass scale is another challenge to be met, Fialho said.
“Future scenarios require alternative efforts,” and waterways are a priority for ANTAQ because they take development into the interior of the country. “The industry supplying pre-salt extraction does not necessarily have to be located on the coast,” he concluded.
IPS is an international communication institution with a global news agency at its core,
raising the voices of the South
and civil society on issues of development, globalisation, human rights and the environment
Copyright © 2021 IPS-Inter Press Service. All rights reserved. - Terms & Conditions
You have the Power to Make a Difference
Would you consider a $20.00 contribution today that will help to keep the IPS news wire active? Your contribution will make a huge difference.