1. NOT AN OFFICIAL UNCTAD RECORD

2. Building up the Oil & Gas Cluster in Brazil: the role of the Supply Chain of Goods and Services ONIP National Organization of the Petroleum Industry Oswaldo A. Pedrosa Jr. www.onip.org.br

3. Governmental Agencies Oil &Gas Companies Suppliers of Goods and Services Suppliers of Goods and Services

4. Mission Maximize the local content for the supply of goods and services in the Brazilian Oil & Gas Sector: - based on competitive cooperation and - assuring full and fair opportunities for the local suppliers.

5. Strategic Objectives  Create and maintain a favorable environment for new investments and operations in the Brazilian Oil & Gas Sector.  Strengthen and enhance the local industry capacity by encouraging new investments either by Brazilian and foreign companies.  Promote cost reduction in the Brazilian Oil & Gas Industry.  Contribute to increase the competitiveness of the Brazilian suppliers in all segments related to the petroleum industry.

6. Interaction of local suppliers with oil companies Forum for discussions Vendors List Partnerships OBJECTIVES x ACTIONS Favorable environment for new investments and operations Strengthening and enhancement of local industry capacity

7. Cost reduction in the Brazilian oil & gas sector Increase in competitiveness of Brazilian suppliers Fiscal Legislation REPETRO Financing Alternatives Technology Capability OBJECTIVES x ACTIONS

8. Universities and Technical Institutions Petroleum Industry E&P Refining Transportation Distribution Governmental Agencies Supply Chain of Goods and Services Financial Institutions The Oil and Gas Cluster Environmental Protection Health and safety assurance Social and economic development Technological innovation Key objective: Promote Sustainable Development

9. The Oil and Gas Cluster Main challenges to increase the competitiveness of the Cluster  Create a favorable environment for new investments and operations in the Petroleum Industry.  Strengthen and enhance the local industry capacity.

10. The Oil and Gas Cluster The Oil & Gas Sector has to be competitive internationally  Attractive resources base  upstream  Internal market opportunities  downstream  Adequate fiscal regime  Stable and transparent rules Reduce uncertainties  better risk management

11. E&P Companies in Brazil

12. Petrobras` Investments Plan

13. Non-Petrobras Investments Forecast 2003 – 2007 = US$ 6,4 billion

14. COMPARATIVE ADVANTAGES FOR BUYING LOCALLY Easy access of products and services Use of local currency Ease of after-sales services Fast substitution of spare-parts Use of local language Simplified logistics Reliability in delivery time

15. Technical Capability  Experience in engineering design and product development.  Human resources availability for operation, engineering and management.  Incentive programs for R&D. Supply Chain of Goods and Services

16. Local Industry Capability Well Established Local Industry Experience in manufacturing products and serving the oil and gas sector Supply Chain of Goods and Services

17. Offshore Yards Yards capable of performing the complete set of offshore construction, assembly, and load-out Yards supporting the existing maritime operations Setal/Fels-SetalAngra dos Reis, Niterói, Macaé, RJ Mauá-Jurong Niterói, RJ UltratecNiterói e Macaé, RJ IneparMacaé, RJ OdebrechtMacaé, RJ e Pontal do Sul, PR TechintMacaé, RJ EBE/MPEMacaé, RJ ABB Macaé, RJ e Camaçari, BA Local Industry Capability

18. Engineering Design Construction and Assembly Equipment Manufacturing Instrumentation and Control Technical Services Modules for Offshore Top Side Facilities

19. INDUSTRIAL ENGINEERING AND ASSEMBLY No. of Firms Employed Personnel Industrial Engineering168000 a 8500 Heavy Civil Construction and Assembly 4 45.000 a 50.000 Civil / Industrial Construction 7 10.000 a 11.000 Manufacturing4 11.000 a 12.000 Industrial Assembly39 50.000 a 55.000

20. EQUIPMENTS FOR OFFSHORE PRODUCTION UNITS Wet Christimas Tree BOP and Control Unit Local Industry Capability

21. Processing Pumps Water Injection Pumps Control Valves EQUIPMENTS FOR OFFSHORE PRODUCTION UNITS Local Industry Capability

22. Building up Competitiveness Price Delivery Time Quality Technology Human Resources Fiscal Regime Financing Availability

23. Conclusion The development of the Supply Chain of Goods and Services is essential for creating a competitive Oil & Gas Cluster in Brazil Main Focus:  Eliminate taxation overburden  Reduce the cost of capital for the local suppliers  Promote technological innovation within the local industry  Intensify human resources programs for qualifying professionals required by the local industry