A FLEET FACING A DEMANDING SOCIETY TRANSPETRO International Seminar of Government & Oil/Shipping Industry Cooperation Moving Forward Together 59 Million tons shipped by sea 670 Million m3 of crude, oil products and ethanol 53 vessels 2.9 Million DWT 47 Terminals 10.3 Million m³ 7,100 km Oil Pipelines PETROBRAS TRANSPORTATION AND LOGISTICS ENTERPRISE ACTIVITIES: TRANSPORTATION AND STORAGE OF CRUDE, OIL PRODUCTS, NATURAL GAS AND BIOFUELS ARNALDO ARCADIER Executive Manager TRANSPETRO NOVEMBER 2009 4,400 Km Gas Pipelines 01 02 TRANSPETRO SHIPPING COASTAL AND OCEAN NAVIGATIONS NT PIRAJUÍ Typical Operations 03 04 INLAND NAVIGATION NT NILZA OFSHORE BUNKERING NT MAÍSA 05 06 1
OFFLOADING OPERATIONS WITH DP SHUTTLE TANKERS NT ATAULFO ALVES FSO IN SANTOS BASIN NT AVARÉ 07 08 SHIP TO SHIP LPG CARRIERS NT GUAPORÉ 09 10 PLATFORM SUPPLY VESSEL (PSV) TANGARÁ SINGLE POINT MONOBUOY NT BROTAS 11 12 2
FPSO/FSO OFFLOADING OCEANIC TERMINALS MARITIME INDUSTRIES CHALLENGES Shipmanagers Shipowners Port State Authorities Flag State Authorities Traders & Brokers Maritime Terminals IMO Society Insurance Companies Shareholders Classification Societies Crews 13 14 OPERATIONAL COMMITMENTS HSE Injury Rates Reduction Nutrition and Physical Activities Program Contingence Plans SMT Medical Prevention in Transpetro Alcohol and Drugs Politics Crew Management - 2300 Seamen Training Courses and Seminars Cadets and Apprentices (Electricians and similars) HSE HSE Nutrition and Physical Activities Program Started in 2006 Up to now 1500 seamen attended Onboard visit of Nutrition and Physical Professionals Evaluation for Glycemia, Tobacco, Overweight, Hypertension, Sedentarism Healthy food HSE Contingency Plans - Influenza A (H1N1) Kit for Individual Protection distributed for all the fleet Masks, gloves, cloth protections, caps Hygienical Behaviors Procedures Antiviral Medicine distribution Permanent Medical Orientation 24 h / 7 days Key Performance Indicators 15 16 COURSES AND SEMINARS FIRST WOMAN TO BE A CAPTAIN IN BRAZILIAN MARINE MERCHANT Human Factor - 31 Courses with the participation of 539 employees (sea and shore teams) Risk Management - 8 Courses with the participation of 160 employees (sea and shore teams) Rating Seminars - 17 Courses with participation of 470 seamen Onboard Training Covering both officials and rating (average of 280 seamen per year) 17 18 3
ONLINE FLEET POSITION CONTROL - GEOABAST ONLINE FLEET POSITION CONTROL - GEOABAST 19 20 CNCO NATIONAL OPERATIONAL CONTROL CENTER BRAZIL PETROBRAS PROMEF Fleet Modernization and Expansion Program 21 22 GOVERNMENT GUIDELINES PROMEF TRAJECTORY All opportunities must be used to foster national development and ensure the well-being of Brazilians. Oil must be deployed as a tool for generating jobs and incomes. PROMEF Fleet Modernization and Expansion Program 23 24 4
SHIPPING HIGHLIGHTS SHIPBUILDING INDUSTRY 80% of world trade is carried on ships. The global portfolio reported by In Brazil, trade handled by ships reaches 95%, with less than 4% shipyards is more than 8,000 vessels. currently carried under the Brazilian flag. This capacity is tightly clustered in Korea, China and Japan. Last year, Brazil spent Investments in Shipbuilding reach US$ 16 billion on shipping, shipping and US$ 140 billion a year. Petrobras spent US$ 2 billion The on charters. world s second-largest shipbuilder during the 1970s, Brazil has slipped behind. 25 SHIPBUILDING INDUSTRY 26 SHIPBUILDING INDUSTRY 27 COASTLINE AND MAIN RIVERS 28 BRAZILIAN CASE OF GLOBAL COMPETITIVENESS - EMBRAER Brazil needs ships. 95% of its foreign trade depends on maritime transportation 8,000 8 000 km (5 (5,000 000 miles) of coastline 42,000 km (26,000 miles) of navigable rivers 29 30 5
TASKS AND CHALLENGES TASKS AND CHALLENGES 31 32 TASKS AND CHALLENGES TASKS AND CHALLENGES To reconstruct Brazil s shipbuilding industry on competitive bases. To re-shape the logic underpinning Brazil s transportation matrix. Almost 60% of Brazil s transportation matrix is road-based, which is twice as expensive as rail transportation, and four times dearer than maritime transportation. New vessels required for coastal shipping and ocean going transportation. Qualify the work force. Exclusive financing through the Merchant Marine Fund (FMM). 33 34 THE PATH TO GLOBAL COMPETITIVENESS Shipyard facilities and Technology Technology Assembling Lifting capacity Steel processing I T Longitudinal sleepway 10 50 ton crane Manual/optical cutting 100 300 ton crane / goliath Plasma cutting semiautom. welding Dry dock 500 1500 ton crane / goliath Laser cutting robbot welding CAD CAD/CAM CAD/CAM /CIM THE PATH TO GLOBAL COMPETITIVENESS SHIPBUILDING INDUSTRY COSTS STRUCTURE % costs in Brazil 100 20 15 Total Labor Other costs 65 Materials, parts and equipment Materials, parts and equipment account for the highest costs in the shipbuilding industry Steel plates and profiles account for 20% - 25% of the final costs of a vessel. Transpetro took over steel purchases negotiations in order to ensure competitive prices at global standards for Brazil s shipbuilding industry. 35 36 6
ASSUMPTIONS UNDERLYING THIS PROGRAM PROGRAM BASES Shipyards equipped with modern production systems and engineering expertise. Building ships in Brazil. Minimum local content of 65%. Competitive prices at international level after learning curve. Training and qualifying the work force. Investments in technology. Reduction costs driven, especially shipbuilding steel plates and profiles. 37 38 PROMEF A CASE STUDY EXPLORING THE SUCCESS OF PROMEF To modernize and expand the TRANSPETRO fleet of tankers, reaching 100% of coastal shipping and 50% of ocean going transportation. SCOPE: construction of 49 vessels PROGRAM PHASES: PHASE 1: construction of 26 vessels (10 Suezmax, 5 Aframax, 4 Panamax, 4 Products and 3 LPG) PHASE 2: construction of 23 vessels (4 Suezmax DP, 3 Aframax DP, 8 Products, 5 LPG and 3 Bunker) 40,000 direct jobs INVESTMENT: US$ 610 million AREA: 1,620.000 m2 This will be the largest shipyard in the Southern Hemisphere PRODUCTION CAPACITY: Steel processing: 160.000 ton The first Suezmax vessel will be delivered in the first half of 2010. 39 40 APRIL 2009 A CASE STUDY EXPLORING THE SUCCESS OF PROMEF 8,000 people employed during shipyard construction More than 4,000 people employed during shipyard operation Already secured the construction of 15 tankers and 7 shuttle tankers under the Fleet Modernization and Expansion Program (PROMEF) Partner: Samsung 41 42 7
FIRST BLOCKS IN THE DRY-DOCK DOCK (JUNE 2009) GENERAL VIEW OF PANEL LINE FACILITIES 43 44 DRY-DOCKDOCK DRY-DOCK DOCK VIEW (SEPTEMBER 2009) 45 46 KEEL LAYING (SEPTEMBER 2009) KEEL LAYING (SEPTEMBER 2009) 47 48 8
KEEL LAYING (SEPTEMBER 2009) ASSEMBLY WORK IN PROGRESS (OCTOBER 2009) 49 50 MAUÁ SHIPYARD PRE-ASSEMBLY ACTIVITIES MAUÁ SHIPYARD PRE-ASSEMBLY SHOP 51 52 MAUÁ SHIPYARD DOUBLE BOTTOM BLOCKS MAUÁ SHIPYARD BLOCKS AT THE SLIPWAY 53 54 9
Fleet Modernization and Expansion Program (PROMEF) STEEL DEMANDS Total Demands of (PROMEF): 680,000 tons Fleet Modernization and Expansion Program (PROMEF) STEEL DEMANDS Total Demands of the Fleet Modernization and Expansion Program (PROMEF): 680,000 tons 115,000 tons of steel plates have already been purchased from countries such as China, Korea, Ukraine and Brazil. In order to be competitive, prices must be based on international standards. This is why Transpetro is seeking steel supply options all over the world. 55 56 RESEARCH AND DEVELOPMENT INITIATIVES TANK TEST EXPANSION IPT SÃO PAULO 1. International Benchmarking for Performance Indicators in the Shipbuilding Industry; 2. Risk Evaluation Laboratories; 3. Manoeuvering Operations Model Tests; 4. Laboratory for Shipbuilding Simulations; 5. Multiuser Center Installations for Design of Ocean Going Vessels; 6. Stress Analysis Calculations in Shipbuilding Fabrication Process; 7. Supplychain and Operations Management Center for Shipbuilding Industry; 8. Basic Design for CNG Vessel. Amount : R$ 33 Millions, about US$ 19 millions 06/11/2009 57 58 MODEL TEST FABRICATION ROBOTIC ARM MODEL TEST IPT SÃO PAULO 06/11/2009 06/11/2009 59 60 10
BRASIL NEW OPPORTUNITIES OPPORTUNITIES FOR REPAIR SHIPYARDS AND EQUIPMENT INDUSTRIES Construction of repair shipyards each year 4,600 ships sail along the Brazilian coastline, where no modern repair facilities are available. Et Establish blih enterprises supplying equipment, parts, services and repair for shipyards and shipowners. Main maritime trades 61 62 OPPORTUNITIES FOR SHIPYARDS NEW BUILDINGS SHIPBUILDING SECTOR SUSTEINABILITY IN BRAZIL The 49 ships planned through the Fleet Modernization and Expansion Program (PROMEF) are insufficient, unable to respond in full to future demands prompted by Brazil s pre-salt oilfields and the expansion of the biofuels market, including ethanol. The development of the pre-salt oilfields and investments in biofuels are triggering additional demands for ships, platforms, rigs, FPSOs and supply boats. Petrobras will sign contracts covering 40 drilling rigs, 70 tankers,146 supply boats and 10 FPSOs. Brazil s National Shipbuilding Industry Association estimates that orders from this sector will reach 214 new vessels by 2015. 63 Shipbuilding in Brazil must reach competitivess at a world level, bein necessary to overcome challenges related to steel plates price, labour productivity, R&D and equipment supplies. Transpetro through PROMEF Fleet Modernization and Expansion Program - is promoting the first steps of this process and its continuity will lead Brazil to have a modern and susteinable shipbuilding industry. 64 MANY THANKS CHALLENGE OPPORTUNITY ENTREPRENEURSHIP PARTNERSHIP TECHNOLOGY CAPACITY www.transpetro.com.br 65 11