International Corporates and Institutions – Tom Ringseth

Agenda:
I. Norwegian Business in Brazil
II. Political and economic update
III. Energy and shipping in Brazil
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Trade
Stortingsmelding 15
Norwegian investments in Brazil
Companies and sectors
Today over 100 Norwegian companies established or represented in Brazil
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• Short overview of economic situation
• Politics
– President Lula government
– Difference between first and second administration
– Current financial crisis
– Elections 2010
– Political challenges
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• 70-mid 90’s several domestic and international crisis
• President Cardoso (FHC) 1994-2002
– Orthodox economic policies
• President Lula 2003-2010
– Continued orthodox policies
– Second mandate more social focus
– Prior to crisis, historical best moment
– Crisis, 4th quarter 2008 GDP – 3.6%
– Crisis, Lula administration measures
– S&P’s view
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• Economic challenges in Brazil
• Inflation or growth ?
• World’s highest interest rates
• Current account deficit
• Lower trade surplus
• Increasing fiscal deficit
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• Political challenges:
• Social security, fiscal and political reforms
• Social developments
• Education, health and security
• Infra structure
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• Energy matrix
• Oil & gas
• Petrobras and OGX, SH, Shell Chevron, Repsol, BG, etc.
• Current production peaks 2.2 million of bpd
• Pre salt potential
• Investments of USD 800 billion (UBS Pactual)
• Future production
• 3.7 million of bpd by 2013
• 5.7 million of bpd by 2020
• Petrobras Investment Plan 2009 – 2013
• Basis USD 40 p/barrel
• Financing secured for 2009 and 2010
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• Oil or fluids exporter
• LNG importer -> exporter
Petrobras now entering market for equipment and services
Travels to Singapore last week and this week to Korea. Invitations for ship building companies to establish themselves in Brazil.
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• Brazilian flag
• FMM – BNDES and Banco do Brasil
• Offshore segment case – a success story !
• Clients
• Technology
• Financing
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• Offshore vessels - 146 vessels Petrobras new build program +
50 vessels for other operators
• Rig
• Drill ships
• Tankers
• Transpetro
• Local shipping companies
• FPSO’s
• Shuttle tankers
• Need for shipyards
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EXPORT CREDITS
• Higher local content
• Local production as part of industrial policy
• New legislation, 1% of gross revenues into domestic R&D
• Development of local technology clusters
• Petrobras – Cenpes
• Development of Brazilian oil equipment and service industries
• Brazilian and Norwegian partnerships, jv., patents
• Establishment in Brazil of Norwegian companies:
• Sales office
• Local production
• Manpower - competence
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• Lack of reliable shipyards
• Weak local network of domestic equipment suppliers
• Manpower challenges
• Shipyard
• On vessels
• CSR initiatives
• Naval Academy
• CSR Maritime group – DLW Dream Learn Work
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• BNDES
• Reais
• FMM – USD
• ECA’s
• GIEK, Eksportfinans and DnB NOR
• IFC
• Project finance – more challenging
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• Oil & gas and shipping in Brazil has decades ahead with good business potential.
• Come to Brazil, consider doing direct business within Brazil.
• The most successful companies have established themselves during many years.
• Build up your network, with contacts within finance, banks,
BNDES. Try to fund yourselves in Brazil in Reais or USD depending on your business segment.
• Develop your network with lawyers, consultants, listen to your contacts in Norway and at the Brazilian Embassy. There are strong Brazilian–Norwegian networks through BNCC,
NBCC, INTSOK, Innovation Norway.
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