Brazil conference review


Owners describe many challenges of working in Brazil


Operating in the fast-growing market offshore Brazil has its rewards, but is not without significant challenges, say shipowners experienced in the area


for Petrobras, the country’s state-owned oil company, is a “unique experience” and that the Brazilian market is unlike any other. During the Brazilian session, Sølve Høyrem, Westshore Shipbrokers’ managing director, highlighted the opportunities there. Chief operating officers from shipowners Deep Sea Supply (Olaf Hafredal) and Farstad Shipping (Børge Nakken) described their operations with Petrobras. Both agreed a key challenge in Brazil was the recruitment and retention of trained Brazilian crew. Technip’s fleet operations manager Mike Inglis said the company had faced critical manning levels on its five subsea construction vessels in the country.


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Mr Inglis said getting clearance for vessels when they first entered the market in Brazil remained very challenging. He said that lengthy delays were not uncommon, with vessels stuck at anchor as a result. Mr Inglis described Petrobras as uniquely challenging as a customer, and said the lack of skilled personnel for vessels was becoming critical, a sentiment echoed by Mr Hafredal


n a special session devoted to Brazil, delegates at the Annual Offshore Support Journal Conference learnt


that working


and Mr Nakken. Other issues he highlighted included language difficulties and what he called “ethics and compliance” in regions such as Brazil.


Brazil is not well-known as a spot market, but one certainly seems to be developing. Mr Hafredal said he anticipated that the nascent spot market offshore Brazil would grow, and Mr Høyrem noted that Petrobras was not the only customer active in the region. There are more international oil companies too, and as a broker he has seen many vessels fixed on a sublet basis when availability allows. “We have seen 50-100 fixes on the spot market,” Mr Høyrem told delegates.


Mr Inglis said another unique feature of working offshore Brazil was that vessels tend to be worked very hard for the entire duration of a contract and that Petrobras is quick to impose penalties on owners. “Our vessels often finish contracts in the region worse for wear,” he told delegates. “Ultimately, this means that ships get run into the ground in a way that you simply don’t see elsewhere.” As the number of Brazilian personnel


on board a vessel grows, he said, so too does the power exercised by the Petrobras representative on a vessel. “At


times, it’s


almost as if people are afraid of these guys,” he said. “I think there is a growing recognition that, sometimes, there is a need to challenge the Petrobras representative.”


Mr Hafredal agreed, and noted that any owner entering the market shouldn’t expect to budget for 100 per cent of the value of a job. “There is more or less a 3-5 per cent


penalty all the time,” he claimed. As has been highlighted in OSJ on a number of occasions, recruitment and training continue to be big issues offshore Brazil. Mr Nakken said many recruits who graduate from the maritime schools in Brazil have no experience or understanding of the specific vessel types and types of operations conducted offshore. “They have had their basic training, but that is it,” he said. All of the shipowners participating in the session agreed that even when they recruit and train personnel it


is


hard to keep them. A lot of people, such as dynamic positioning operators, leave the OSV sector to go and work on rigs because, for obvious reasons, two weeks on the rig and then four weeks off is preferable to four weeks on an OSV and four weeks off. “We try to treat them well but we follow the union tariffs when it comes to what we pay. We try to avoid the spiral of paying more in order to get sufficient people,” said Mr Nakken.


Mr Hafredal said he believes that


Petrobras would have to loosen up on minimum local content requirements if it wants to maintain the fast pace of expansion offshore. “Otherwise, the whole thing will stop,” he said. For his part, Farstad’s Mr Nakken said


that Brazil “was only trying to do what other countries have done” when minimum local content rules are applied to contracts. “We are just visitors,” he said. “If you want to have a long term presence, you need to become local.” OSJ


Mike Inglis: Petrobras is a uniquely challenging customer www.osjonline.com


Olaf Hafredal: the Brazilian government and Petrobras need to loosen up on minimum local content requirements


Annual Offshore Support Journal Conference and Awards 2012 I 11


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