Page 34: of Maritime Reporter Magazine (June 2, 2010)

2010 WORLD YEARBOOK SHIPBUILDING

The rise and fall of the Brazilian ship- building market is well-known, having plummeted from the top of the world list in the early 1980s to the bottom by 1999.

Today, Brazil is storming back, an amaz- ing revival of the nearly defunct ship- building industry driven by the sudden influx of orders from major offshore oil & gas players, namely Petrobras. — By Claudio Paschoa, Rio De Janeiro

Today the shipbuilding market in Brazil has in excess of 100 firm orders for ships in a variety of shapes and sizes, in addi- tion to a large number of drill rigs and production unit orders. In addition, com- panies from around the globe are flock- ing to Brazil to set-up shop and engage in the industry’s renaissance. The na- tional shipyard workforce has hit 50,000, impressive considering its rise from a low of around 2,000 just a decade and 25,000 just three years ago. “The Brazilian shipyards are prepared for the challenge of producing drillships, production platforms, support vessels, tankers and all the equipment necessary for Brazil´s new phase of oil production in the deep layers of the marine seabed, known as pre-salt.” said Ariovaldo

Rocha, President of SINAVAL (National

Syndicate for Naval Construction and

Repair Industry and Offshore).

While maritime and offshore O&G in- dustries are notoriously cyclical, the de- mand from Brazil is forecast to be steady for a generation, as the amount of poten- tial new reservoirs is projected to con- tinue driving demand for ships and rigs for the coming two decades.

Unique is that positive signs are com- ing from many different market sectors, a variety of organizations and companies, such as Brazil´s SINAVAL, but also in- cluding majors such as Transocean,

Pride, Noble, Seadrill, Sevan, Modec,

BW Offshore and Teekay. In addition, a number of leading shipbuilders are set- ting up shop in Brazil including market leaders such as Samsung Heavy Indus- tries, Hyundai Heavy Industries, Dae- woo, Jurong, STX and the Chinese shipbuilding giant Cosco (CSSC), which is in discrete talks with potential local partners. Many are busy forming partner- ships with Brazilian shipbuilders or in- vestors, in order to fulfill national content policies to be eligible to compete for the shipbuilding contracts.

These shipbuilders are lining up to in- vest billions in local infrastructure and allow technology transfer, made all the more interesting by the status of global shipbuilding today due to last year’s eco- nomic meltdown. The conclusion can be drawn that the high level of investment speaks to the market’s potential for many years to come.

This level of investment points to a long-term commitment and, conse- quently a belief that there will be contin- ued demand for shipbuilding services in the long-term. The growth of the Brazil- ian shipbuilding market is a reality and

Brazil is already considered the sixth biggest shipbuilding nation in the world and is growing.

The pre-salt development alone will be responsible for a major amount of the short and mid-term demand, as the orders for pre-salt production rigs, FPSOs,

MODU´s and support vessels have only just begun to be placed and are expected to be massive.

BNDES (Banco de Desenvolvimento

Social), or Brazil´s development bank and major financing institution will award around $70b to the Brazilian ship- building industry in 2010 alone. Part of this financing is done through the FMM “Fundo da Marinha Mercante” or Mer- chant Marine Fund.

FPSO at Tupi (Photo Petrobras) 34 Maritime Reporter & Engineering News

Forecast for

Brazilian Shipbuilding