Subsea Support Equipment Manufacturers Flocking to Brazil

Balmoral Offshore Engineering recently announced plans for a new Brazilian manufacturing facility, set to replicate the company´s existing facility in Aberdeen, Scotland.

Already exporting more than 95% of manufactured goods from its Aberdeen HQ, the company is completing the incorporation of its Brazilian division, Balmoral Offshore Brasil Ltda. A number of locations for the facility are being considered with a final decision expected very soon.

It’s thought that the multi-million pound investment could create up to 100 local jobs with expertise from the Aberdeen operation being drafted in to assist with plant commissioning.

The new facility will manufacture the company’s complete range of products from the largest deepwater riser buoyancy and insulation systems to the smaller, more intricate, elastomer mouldings such as bend stiffeners, restrictors and cable protection.

Flowserve has opened compressor gas seal repair and test laboratory in Brazil. Flowserve Corporation is a leading provider of flow control products and services for the global infrastructure and O&G markets. They recently opened an important test laboratory for compressor seals in the city of Macaé, in the north side of the state of Rio. The facility features the company’s first dry gas seal testing capability in Latin America, expediting repair time for customers in the region. Part of a state-of-the-art Quick Response Center (QRC) that opened in 2009, the new test laboratory is designed to support compressor seal customers in a variety of industries including O&G, petrochemical and chemical. All of these industries are in shear growth in Brazil.

Trelleborg has signed an agreement to acquire a Brazil-based business in the O&G industry from a subsidiary of Veyance Technologies Inc. The business focuses on specially designed oil hoses for deepwater offshore O&G extraction. The plant is located in Santana de Parnaiba, close to São Paulo. Trelleborg will take over the lease on the facility, which is 15,000 m2, acquire the existing equipment and assume responsibility for the some 100 employees.

The acquisition is expected to be finalized in the first quarter of 2011, and will be followed by investments in supplementary production equipment. It is anticipated that production can commence gradually as of the second half of 2011.

These are only examples of some O&G subsea equipment providers that are setting up shop in Brazil in order to better supply and service their customers such as O&G operators and service providers which have already set-up and are operating in Brazil. With the O&G production in Brazil is expected to skyrocket within the next 9 years, reaching an estimated volume of more than 6 billion boe by 2020, incredibly tripling the present production. A true modern day oil boom in occurring in Brazil, and a substantial amount of the major new reservoirs are located in deep or ultra-deep waters, with many of the huge, newly discovered pre-salt reservoirs such as Tupi (Lula) and Libra, dependant on subsea systems located at over 2000 meters (6,600 feet) below sea level. These subsea systems are dependent on subsea service providers to service them and on heavy subsea equipment manufacturers to supply industry proven equipment. The heavy subsea equipment thus depends on subsea support equipment to operate smoothly, and these support equipment need to periodically be replaced and repaired. With a complicated and slow importation process in Brazil still hampering, vital equipment deliveries and the need to have and efficient means to supply and maintain these equipments, not to mention local content policies in Brazil. These smaller support equipment manufacturers are taking the step and making investments in order to be present in Brazil and better support their existing customers and also looking at attracting new customers.

A good example of this new mentality is given by a Trelleborg executive;

"This represents a step in our quest to strengthen our presence in Brazil in the offshore O&G industry," said Lennart Johansson, President of the Trelleborg Engineered Systems business area. "The acquired operation complements our current technology in oil hoses and is thus an excellent addition to our product portfolio, globally as well as in Brazil. Our customers are moving more and more of their production to Brazil and it is crucial to ensure that we have manufacturing close to their units."

Claudio Paschoa