News

09/07/2015

Backing Brazil

As Petrobras reduces investments in recent business plan, and the local naval industry is struggling, Norwegian stakeholders reiterate the importance of not losing faith in the Brazilian oil, gas and maritime industries.

Petrobras is planning to reduce its investments by 37 percent for the 2015-2019 period, according to the business plan that was released to the public on June 29, 2015. As a consequence of the ongoing investigation of corrupt practices in Petrobras, the Brazilian naval industry is experiencing great difficulties, and shipyards like Eisa and Mauá in Rio de Janeiro are readjusting by laying off staff - or even closing the gates. The future of Sete Brasil and the drillship program, is also uncertain.

Perfect timing
This is why the significant Brazilian participation at Nor-Shipping, an international event for the global maritime industry last month, was so important, and important stakeholders, both Norwegian and Brazilian, believe that in a few years, Brazil will become a better and even more attractive market than today.

Ricardo Cesar Fernandes (Abran) and Felipe Meira (Farstad).The Brazilian Association of Norwegian Shipowners, Abran, and NBCC were both heavily involved in the making of the Brazil program at Nor-Shipping, and to the Brazilian delegates, Nor-Shipping was seen as an excellent platform to explain to people what is really going on in Brazil. A 60 people strong delegation of key representatives from Brazil were present at the Oslo event, and timing could not have been better, according to NBCC president Camila Mendes Vianna Cardoso:

«A lot of wrongful information on Brazil is circulating. Everybody knows that we are experiencing difficulties. The falling oil price and the investigations of Petrobras are problems that we are in fact facing, but this is no reason why we should not be active on the international stage. On the contrary, we need to be visible and explain what is happening and what is being done to solve the problems. In difficult times, we also need to try to make a difference, by figuring out how we can improve, how we can become more effective, and turn the difficult times in to something better», she says.

«A perfect opportunity for us to tell people what is happening in Brazil. At the moment we are flooded with blurred input about Brazil from all sources. it is very difficult to find out what´s really going on. But despite the political turmoil and the scenario of falling oil prices, things are happening. Businesses are evolving», executive director Ricardo Fernandes of the Brazilian Association of Norwegian shipowners (Abran) says.

From the left Abran chairman José R. Neves, Hans Ellingsen of Olympic Shipping and Thomas Saxegaard of NSA.

Still a demand
For the very first time in the history of Nor-Shipping, a program of activities called Brazil@Norshipping was organized to offer delegates better insight into the risks and rewards of doing business in Brazil. Claudio Araújo, the Procurement Services Unit General Manager of Petrobras, was one of the speakers. 

«I came to Norway prepared for difficult questions, and the lack of information is in fact great. This is why I find it positive to be able to contribute with correct information and details», Mr.  Araújo said.

According to Abran board member Thomas Saxegaard, who is also representing the Norwegian Shipowners´Association, Brazil is still a priority market to Norwegian shipowners.

«Considering the difficult market situation - in Brazil as a result of the corruption scandal, but also globally, resulting in a lot of uncertainties, the timing of the Brazilian presence here in Norway is just perfect. To us it is important to be able to gather so many people and strengthen the cooperation with Brazil. I find it very important that Petrobras is represented here, and the Petrobras representative also made it clear that the demands for vessels still exist. Petrobras has a fleet of about 500 support vessels, and a significant part of these vessels are Norwegian. As many as 30 percent of the most specialized ships are Norwegian», Mr. Saxegaard says.

The Norwegian Export Credit Guarantee Agency's (GIEK) is about to resume cooperation with Petrobras.

«If you read Norwegian newspapers, the lack of information on the situation in Brazil is big, but GIEK has had a good dialogue with the partners in Brazil throughout this whole process. Still I find it important and wise that so many Brazilians are coming to Norway at this decisive moment. We have seen the same from Petrobras. They are traveling, having meetings and trying to explain what is being done, especially when it comes to the new anti-corruption policies, and this is something I find very important. GIEK´s relationship with Petrobras is good, and we are now in the process of establishing new relations with the new management», Wenche Nistad, managing director of GIEK says. GIEK is now analyzing the new business plan carefully, and expect to resume cooperation with Petrobras soon.

Helle Moen, the director of the Innovation Norway office in Rio de Janeiro, thinks that the lack of information and wrongful information has contributed to greater uncertainties and more scepticism than necessary.

BNCC president Harald Martinsen and NBCC president Camila Mendes Vianna Cardoso.«In Innovation Norway we still see interest from Norwegian companies, and we have had a lot of inquiries, but many have a distorted image of what is going on and Nor-Shipping was a chance to correct that image. Not all of the media reports are balanced, and you have to bear in mind that new opportunities always emerge in times of crisis. Meanwhile you need to take care of your business network and maybe reposition yourself in the market. Business associates might move around, and in Brazil, personal relations are extremely important. You can´t turn your back on a market like Brazil simply because it is passing through a down period. In my opinion, Brazilian representatives are very open about what is going on, and willing to talk about it. The great majority finds what is going on very positive. This is a corrupt business culture that is not sustainable, a way of doing business that needs to be brought to an end. In three years time, Brazil is a different and better market to operate in", Mrs. Moen says.

A roller-coaster
Harald Martinsen is the president of the Brazilian Norwegian Chamber of Commerce in Oslo. He believes in "business as usual" between Norway and Brazil and is confident that the crisis will pass. 

His predecessor Terje Staalstrøm has many years of experience from DNV in Brazil. The lack of information on Petrobras and the current market situation in Brazil has been damaging.

Former BNCC president Terje Staalstrøm.«We cannot let media reports scare us away. People  just don´t know enough. The scandal does not mean that all departments of Petrobras are involved or blacklisted. Opportunities in Brazil are still huge, and we need to remember that the relations between Norway and Brazil in many ways are like a roller-coaster. In the 1970-s, everything was looking great. In the 1980-s, doing business in Brazil became more difficult. In the 90-s, things were improving, and the last 15 years have been good years. Now, we are struggling, but this will turn. Norwegian companies establishing in Brazil needs to take the long term view. There is no quick fix. You have to be present, and loyalty, in good times and bad, is something Brazilians appreciate. It will pay off when the market turns», Mr Staalstrøm says.

 

  

By Runa Hestmann, NBCC journalist
(runa.tierno@nbcc.com.br)

 

 

 

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