Post on 05-Apr-2018
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KHEN GROUP: Brazilian EconomicScenario and Investment O ortunities
Khen Group assists clients with critical, high value services to createcompanies, and generate wealth in fast-growing Brazil
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Khen Group is a solid consultancy and industrial sales firmfocused on development of global business in the Brazilianmarket
Markets we cover Services we provide
OIL & GAS
CHEMICAL
SALES REPRESENTATION
INITIAL BUSINESS SET UP (GREENFIELD)
PETROCHEMICAL
REFINERY
MVL & END USERS APPROVALS
MARKETING & SALES MANAGEMENT
MARITIME
SHIPYARDS
STRATEGIC PLANNING & PRODUCT STRATEGIES
ORGANIZATIONAL CONSULTING WORKFLOW &
WATER TREATMENT
MANAGEMENT PERSONNEL
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Outline
BRAZIL - Attractive Investment Destination
Oil and Gas Sector and Investments
Petrobras CRCC Vendor Registration
Establishing a Company in Brazil
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Brazils Facts
6th Largest economy in the world in terms ofnominal GDP 7TH ON PPP
Has the worlds THIRD largest portfolio ofc ar ere o an ers
Largest consumer market in Latin America
It is the world's fifth largest country, both by
over 192 million people - Has an annualpopulation growth of 2.5 million.
Is the gateway to MERCOSUR
Largest producer of biofuels
The worlds 10th largest petroleum reserves
steel (27 million tons per year).
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Biggest Companies in Brazil
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Brazilian Oil Market
Oil and Gas accounts for49.1% of Brazils energyproduction
-exploration underpinsmassive growthopportunities
Total estimates for thereserves range from 30 to100 billion barrels
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Statistics
GDP $2.518 trillion (nominal, 2011)/ $2.309 trillion (PPP)
GDP growth 7.5% (2010), 3.5% (2011), 5.0% (Projection 2012)
GDP by sector agriculture: 6% industry: 28% services: 66% (2011)
Inflation (CPI) 5.1% (2012)
Labor force104.3 million (2011)
Unemployment 6.2% (March 2012)
Exports $250.8 billion (2011 est.), Imports $219.6 billion (2011 est.)
Ease of Doing Business 126th Business Rank (2012)
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Platforms being built in Brazil (Modules)
Platforms 2011 Brazil InternationalMarket
Construction
FPSO P-58 Modules Hull Bidding- hull Keppel(Singapore)
- Hull Jurong (Singapore),Modules QUIP (RS)
FPSO P-63 Modules Hull QUIP/ BW (Norway)
FPSO Cidade deParaty
ModulesIntegration at
BrasFELS
Hull c a n o ec anSBM/Queiroz GalvaoConversion of the hull
Keppel FELS (Singapore)
FPSO Cidade de
Sao Paulo
Modules
Integration
Hull Schahin/ Modec andSBM/Queiroz Galvao-
Modules BrasFELS (RJ)
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Platforms Fully Built in Brazil
Platforms 2011 Brazil InternationalMarket
Construction
TLP P-61 - Total Floatec (KeppelFELS+ RJ Mc
Dermott
FPSO Santos - Total Modec- hire
FPSO Angra dosReis
- Total Modec- hire
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Drilling Platforms
Equipment Operations Brazil Intl
Market Construction
r ngplatforms jack-up type
n erconstruction
o a - oParaguau
ConsortiumBA
7 Drillingplatforms
Underconstruction
Hull Drilling tower EAS (PE)
1 Drillingplatforms
UnderconstructionSemborpMarine
Total - JurongAracruz(Sembcorp
20 Drilling
platforms
Under
constructionSete Brasil S.A.
Total - EAS
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World Shipbuilding Scenario
Brazilian participation inworld orders= 3.97%
.
Source: Clarksons- June 2011
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Petrobras Business Plan Summar
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Refinery Industry
Oil production and theBrazilian market demand
currently exceed refiningca acit
Demand growing by 20% inthe last two years and willkee rowin in the future
Most refineries areexpanding
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Projects that sustain increased production: Petrobras
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OGX Production Targets
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Petrobras and OGX Investments
Petrobras invested US$ 43 billion in 2010and has a US$ 224.7 billion (BRL 389billion investment lan for 2011-2015 ofwhich 95% in Brazil), and expects to lift itsoil production within Brazil from 2 to 3million barrels per day by 2015, and to
4.9 million by 2020
E&P portfolio has around 3,000 projects
OGX invested US$4.1 billion of Drilling
Seismic Campaign
Total OGX cash raised to date: US$8.3bn
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New frontiers
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Conc.
Petrobras has a robust project portfolio, which is atypical
There are tremendous opportunities for already installed
companies and newcomers in the Brazilian oil & gassupply chain due to the scale provided by Petrobrasand other Brazilian companies in upstream anddownstream portfolio
In order to carry out such portfolio, Petrobras is lookingforward to establishing stable long term business
to invest in Brazil (Local Content)
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Local Content
Companies that win a concession to operate an oil fieldoverall local content level, on average around 60%
At least 10% of the product value must be added in Brazil
for the local content to be registered
The primary objec tive of the Brazilian loc al content polic yis to maximize goods and services national industrycontent, within competitive and sustainable basis, in the
imp lantation of oil and gas projec ts in Brazil and abroa d.Petrobras strateg ic investment p lan c alls for 75% ofequipment and services to be sourced from domesticsuppliers.
Objective To increase local employment and income
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Supply Policy to Maximize LC
The Brazilian Government recognizes in the local supplyingmarket, opportunities to improve cost effectiveness and qualitystandards for the present and future projects
when compared with the foreign companies
Petrobras focuses on competitiveness and sustainability in thesupp y mar e n raz or a roa
The Petrobras Local Content policy is connected andcontributes to the Petrobras Social Responsibility Policy
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Exporting to Brazil: possible but difficult
To be able to import goods, you need an import licensenamed RADAR
When the license has been granted, the company getsaccess o , e n egra e ys em on ore gnTrade
II, AFRMM, PIS/ COFIMS, IPI, ICMS
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CRCC Registration
Corporate Register It is a database of Brazilian and foreign companies
The evaluation process approval ensures the inclusion ofthe company in Corporate Register, obtaining the CRCC.
Certificate of Registration and Classification
The company then may be invited to participate inbiddings.
www.petronect.com.br
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Cont.
1. CRCC - Registered Supplier CertificationRCC(Certificado de Registro e Classificao Cadastral)
Phase 1: power of attorney, commitment letter, certificate
of registration, general info about the company Phase 2: companys certifications, technical specifications
of the products, recommendation letters form customers,financial information, management and HSE information
2. Petrobras Master Vendor List Offshore or Onshore(MVLO/MVLOn, hereafter only called MVLO)
,elaborated for each project
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Establishing a company in Brazil
Limitada (Ltda.) S.A.
Flexible decision makingmechanisms
Freely transferrable shares
More formal decision- Reduced bureaucracy
No audit requirements
making process
Easier access to external
Greater confidentiality
Lower operating costs Must be audited once a
year.
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First Steps
Company name and check availability
Select a qualified attorney-in-fact to represent each of the
foreign partners, and prepare power of attorney(s)
Apply for a notarized UK certificate of incorporation
The ower of attorne and certificates of incor oration
must be authenticated by a United Kingdom publicnotary, legalized (verified) by the Brazilian embassy inLondon and translated into Portuguese by a certified
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Cont. Document Preparation
Obtain State and Countycenses
Fire Department clearance
Register the foreign partners withthe Brazilian Central Bank andget the business registrationnumber.
Provision of initial temporaryregistered office address
Employee registration
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Conclusions Brazil offers a robust investment portfolio with no parallel in the world for the same
timeframe
Gas consum tion is risin stron l in Brazil with new ower lants and cars tendin tobe gas fuelled
High number of fields can be exploited commercially in Brazil and demand projects to
improve the existing infrastructure
New refineries, fuel quality and modernization account for 70% or USD 73.6 B ofPetrobras CAPEX investments (2011-2014)
-
Loc al content dem and for new p rojec ts in E&P business areas: 90%
Do your market research and consider Greenfield projects and local partnership as a
way of accessing the Brazilian market