Page 8: of Maritime Reporter Magazine (January 2011)

8 Maritime Reporter & Engineering News by Claudio Paschoa

OSX is an EBX Group company that provides equipment and services to the offshore O&G industry and is active in three different segments: shipbuilding, chartering of E&P units, and operation and maintenance services. OSX Brasil

S.A raised $1.4 billion in its IPO. EBX

Group is owned by Eike Batista, who ac- cording to Forbes is the eighth richest man in the world. OSX was launched to supply the demand for integrated service solutions to the O&G market. Roberto

Monteiro CFO of OSX spoke to Mar- itime Reporter about the shipyard´s plans and expectations for the future.

What is your background?

I come from a railway background at

ALL, America Latina Logística (1999- 2009). There, I worked in the financial area, then spent some years in Argentina, finally as CEO of ALL Argentina. After that I returned to Brazil as Director of

Operations up to 2009, when I accepted the challenge to start-up OSX. I have been here, at OSX, since the very begin- ning of the IPO and worked throughout the whole IPO process.

OSX is a new company; tell us about its history and the relationship with

OGX Petróleo e Gás.

OSX is a service company for the O&G industry. We were born because of a con- junction of factors; a very heated O&G market. Because of OGX´s strong de- mand, in this scenario OGX won conces- sions for exploratory blocks, shallow water blocks, not pre-salt or deepwater.

OGX estimated its potential reserves in

September 2009 to be 6.6 billion boe, but the company has been more successful in its exploration than anyone imagined.

These 6.6 billion boe have a great chance to turn out to be a much larger figure.

Therefore, this demand from OGX is part of this heated market.

Secondly, we have the pre-salt, which transformed Brazil from a country with around 13 billion boe in reserves, to a country with something around 100 billion boe. It is something that changes the whole market, the whole dy- namics. Another factor in this conjunc- tion is the local content policy established by the ANP. It is a policy that we understand to be directed at recover- ing the shipbuilding industry. The local content policy means that all production equipment must carry a high local con- tent, including the shipyards that build them, clearly a policy to recover the ship- building industry. Brazil had a shipbuild- ing industry that had been at its peak in the late 70´s, early 80´s, when it was the second largest in the world, behind

Japan, after that it just stopped in time.

The shipbuilding industry in Brazil is still very shy for the size of the market de- mand. So when you align this high de- mand with the bottleneck created by the national content policy, which was pur- posefully made by the government to re- cover the industry, it appeared to us to be a very important and interesting opportu- nity to create a company. So we created

OSX and signed a long term contract with OGX, our main client. We call this a reciprocal priority contract. This means that if OGX has a demand for FPSOs or production platforms, OSX gets priority for the order and if OSX has a free slot in its shipyard, OGX has priority to use the slot. So this long term contract is good for all of OGX´s demand and for all the slots OSX may have. This gives OSX a very large order book, since for OGX to produce the 6.6 billion boe, you´re talking about 48 production units, this adds up to an order book of $30b for

OSX.

What is the investment figure for the

OSX shipyard?

This $30b orderbook allows OSX to build a shipyard with Korean standards and size. It will be a $1.7b investment in a shipyard, something never seen before in Brazil. It will be the largest shipyard of the Americas, where we will bring all of Hyundai´s technology, a highly efficient, state of the art shipyard, all thanks to this order book. Undoubt- edly, it will be the most efficient shipyard in Brazil.

How does the HHI partnership work?

Hyundai is our partner at the shipbuild- ing unit, where they have a 10% stake and this 10% allowed us to sign another contract for technology transfer. Today, as we are seeking the environmental li- cense for the shipyard, we are also de- tailing the shipyard specifications, working with an engineering company called EPC from the state of Minas

Gerais. Along with the OSX design team working with EPC, there are six Koreans from Hyundai supervising the design, de- termining layout specifications and the flow of material through the production line, to maintain Hyundai standards.

Both possible sites for the shipyard,

Biguaçu in Santa Catarina and Açú in

Rio de Janeiro, have been approved by

Hyundai.

During the operational phase, actually during construction phase, we begin training the workforce. We have an agreement that up to 50 Koreans will come over to train Brazilians for key po- sitions in the shipyard and we may send 40 Brazilian to Korea to practice at the operational Hyundai production line.

For our workforce we are creating the

ITN (Naval Technological Institute), which is a series of OSX sponsored courses to be inserted in selected techni- cal schools and universities. The most basic courses are welders, boiler makers and helpers, which are always in demand.

What kind of ships will the yard focus on building?

We will have the level of a Korean or

Japanese shipyard, with a large amount of automation, laser cutters, automated panel assembly lines, a lot of CADCAM use. We will also have a high lift capac- ity, which is vital. So we will be capable of building any kind of ship. We could build drill ships or even build LNG carri- ers. Or focus now is on the OGX orders, as they are our first client. We are also participating indirectly in Petrobras ten- ders. The shipyard will also have a 1,600 ton Goliath transport crane for the dry dock. It´s the largest in the world.

Where is the yard going to be lo- cated?

The final location for the OSX shipyard was announced on November 16, 2010 and will be in northeast Rio de Janeiro, adjacent to the Açu Port and Industrial

FIVE MINUTES WITH ROBERTO MONTEIRO, CFO, OSX SHIPBUILDING, CHARTERING & OFFSHORE SERVICESPROFILE

Roberto Monteiro

CFO, OSX Shipbuilding, Chartering & Offshore Services

Roberto Monteiro, CFO, left, and Luiz Eduardo Carneiro, CEO, right. (Photo C Paschoa)

FPSO OSX 1 (Photo OSX)