The Prorefam (programme to modernise the Brazilian offshore fleet) initiative – whereby state-controlled oil company Petrobras signs eight-year contracts with offshore support vessel (OSV) operators as long as they build the vessels in Brazil – has gone off the boil and, despite huge optimism earlier in the year that it might be completed during 2012, no new contracts have been signed.
Petrobras has so far completed (signed charter contracts for) 56 of the 146 vessels required under Prorefam Three. Ultimo Mariz, a senior manager in the chartering department at Petrobras, told OSJ earlier this year that he believed the final 90 could be contracted out this year during the latest, fourth, tranche of tenders. But since then the process has been hit by lengthy delays of several months leaving OSV operators deeply frustrated.
A well-respected director at one oil industry consultancy said that he felt the changes at the top of Petrobras had acted as a brake on progress in the oil giant’s chartering department and that this trend would continue until “things settle down”.
He told OSJ: “Everybody is scared of advancing the process in case there are more board changes at Petrobras and the new members don’t agree with the prices and terms of the contracts. Basically, everybody is watching everybody else at Petrobras, waiting until the dust settles. It could take a while before we get much progress, except for one or two specific, straightforward contracts.”
At Astromaritima, a Brazilian-owned OSV operator, the cooling down of the Prorefam initiative has certainly been noticed. The Botafogo-headquartered company, which currently operates some 40 vessels offshore Brazil, making it the second-biggest operator in the South American country, was nominated in first place in the fourth tranche of Prorefam (which commenced in April), to build two to six oil spill recovery vessels (OSRVs).
Sandro Sa, the chief financial officer at Astromaritima, said that although the Prorefam “has not exactly been suspended, it is certainly taking more time than expected, because Petrobras has changed many of its directors”, referring to the changes taking place on the state-owned oil major’s board, with the director for international affairs the latest to have got the chop.
When Brazil’s President Dilma Rousseff appointed her good friend Maria das Graças Silva Foster as the new CEO of Petrobras, replacing Sergio Gabrielli (who had served in the post from 2005 to 2012) she was, apparently, told by Rousseff to “clean up” Petrobras and appoint her own people to key positions.
“With the final remaining member of the five-man Gabrielli board being replaced – with international director Jorge Luiz Zelada being the last to go, on July 23 – Foster has delivered in spades. Just for good measure, the Petrobras board appointed Foster as the new interim head of the ‘international area’, thereby underlining her total control,” said Mr Sa.
Interestingly Sergio Machado has remained as head of Transpetro, the shipping and logistics arm of Petrobras, despite widespread rumours that he would also be replaced. However, as readers of OSJ know, politics often dictates the fate of executives in the oil industry in Brazil and as Machado has powerful political allies it is not such a surprise that, so far, he has survived.
Mr Sa also explained that Petrobras “had not changed its plan, it was just delayed, but it is still in place.” He said that this year had been “a very good one so far” with utilisation of Astromaritima’s Brazilian flag fleet (of 14 vessels) at 100 per cent.
In the latest round of the Prorefam, Astromaritima bid for PSV 3,400s, PSV 4,500s and for the OSRVs, competing against other well-known players such as Bram Offshore and Galaxia. “We know the process is continuing because we have just received a letter from Petrobras saying that they are analysing our bid,” Mr Sa explained. “There is no specific deadline but we expect to have an answer one way or another before the middle of August.” He added that under Petrobras confidentiality rules, Astromaritima is not allowed to go into much detail about pending contracts and pricing.
Another source close to Petrobras said that the company might be waiting for rates for OSVs to fall further before signing any more contracts. However, other commentators say it is still “business as normal”, and that this is a period when you need “just that little bit more patience, so that the dust can settle after Gabrielli’s departure”.
A spokesman for Petrobras told OSJ that they will only talk about contracts once they have been signed and that will be “probably in two or three months”, taking us to October or November. He went on: “The fourth tranche will be concluded in the following two to three months. That is all we can say right now.”
In terms of activity outside of Prorefam, there seems to have been quite a bit, although one well-known company got so fed up with the ‘Custo Brasil’ – the special extra costs it takes to work in Brazil – that they left the arena.
In a tale of two Norwegian companies, we can start with Deep Sea Supply. In terms of OSVs, much of the recent expansion into Brazil has come from the rapidly expanding Deep Sea Supply, which is headquartered in Arendal in Norway, but which also has well-appointed offices at Avenida Presidente Wilson, close to downtown Rio de Janeiro. The second Norwegian company in the spotlight is Eidesvik. It has been skirting around the OSV market in Brazil for a few years and took advice from several consultancies on how best to penetrate it.
However, after an agreement with a Brazilian registered company, they used two of their Norwegian flagged vessels – Viking Surf and Viking Thaumas – to obtain medium-term charter contracts with Petrobras. A few months ago, however, they decided to sell the ships, and the contracts, to a ‘foreign owner’ and invested some of the money in another vessel, which is just seven years old, for use in the North Sea.
So, Eidesvik’s Brazilian adventure is over, at least for now, the company having said that “the financial return on operations in Brazil has not been as good as expected.
“Hence, Eidesvik has chosen to sell these vessels now to be positioned to invest in vessels that give significantly higher return. The new supply vessel will be used in the spot market in the North Sea for the summer season 2012. We expect this market to be strong this summer. When the summer season is over, the company will consider in which region the vessel will be traded further.”
Eidesvik may have pulled out of Brazil, but other owners, such as Wilson, Sons, continue to be very active. The Rio de Janeiro-headquartered company launched the PSV 4500 Batuira earlier this year and the unit was due to start working for Petrobras in August under the terms of an eight-year contract, with options for a further eight years.
The first two of this series – Torda and Sterna – are already operating under similar contracts for Petrobras and a fourth ship is due to be completed by the end of 2012. Batuira is the third of what will be a series of eight PSV 4500s being built in the Wilson, Sons Guaruja yard.
New companies continue to get involved in the Brazilian market, among them OceanPact, who recently acquired four vessels (two PSV 1500s and two mini-supply ships) from Companhia Brasileiro de Offshore (CBO). They are now in the process of modifying them so they can operate as OSRVs, although they will also operate as PSVs when the need arises.
Julio Souza, the operations manager at OceanPact, told OSJ that the company would carry out the modifications at its own small shipyard in Niterói, called Codepa. “Usually we do not operate our ships as PSVs but sometimes it happens because there is such a shortage in the market right now.”
OceanPact specialises in oil spill recovery and was one of the companies that took part in the oil spill recovery effort following the Deepwater Horizon disaster in the Gulf of Mexico in 2010. The Brazilian company was hired as an oil spill response expert by O’Brien’s Response Management, which was in turn appointed by BP to lead the incident command centre.
Although OceanPact has not yet joined the Association of Brazilian Offshore Support Companies (ABEAM), it has applied already to join the Union of Brazilian Shipowners (Syndarma) which is always a required precursor to joining ABEAM.
As OSJ went to press, ABEAM picked up two new members, which makes five recruits since the start of 2012, including Fugro, Latho and OP Navegação. In that time the association has lost just one member, Trico Offshore.
Homero Sanpaio, the executive secretary of ABEAM, told OSJ that the growing number of companies joining the association showed no signs of abating. “We now have 32 members and there are others who want to join. There are more to come, possibly in the next month or so. The good news is that many of our member companies are expanding very rapidly. Those expanding the fastest just now are Deep Sea Supply, CBO and Wilson, Sons. In the past year we have gained five members and lost just one. We are all keeping very busy.” OSJ