Brazil Shipbuilding Forecasst
Excerpted from MarineLink.com
Brazil Shipbuilding: A Forecast
The rise and fall of the Brazilian shipbuilding market is well-known, having plummeted from the top of the world list in the early 1980s to the bottom by 1999. Today, Brazil is storming back, an amazing revival of the nearly defunct shipbuilding industry driven by the sudden influx of orders from major offshore oil & gas players, namely Petrobras.
Companies from around the globe are flocking to Brazil to set-up shop and engage in the industry’s renaissance. The national shipyard workforce has hit 50,000, impressive considering its rise from a low of around 2,000 just a decade and 25,000 just three years ago.
“The Brazilian shipyards are prepared for the challenge of producing drillships, production platforms, support vessels, tankers and all the equipment necessary for Brazil´s new phase of oil production in the deep layers of the marine seabed, known as pre-salt.” said Ariovaldo Rocha, President of SINAVAL (National Syndicate for Naval Construction and Repair Industry and Offshore).
While maritime and offshore O&G industries are notoriously cyclical, the demand from Brazil is forecast to be steady for a generation, as the amount of potential new reservoirs is projected to continue driving demand for ships and rigs for the coming two decades.
Shipbuilders are lining up to invest billions in local infrastructure and allow technology transfer, made all the more interesting by the status of global shipbuilding today due to last year’s economic meltdown. The conclusion can be drawn that the high level of investment speaks to the market’s potential for many years to come.
This level of investment points to a long-term commitment and, consequently a belief that there will be continued demand for shipbuilding services in the long-term. The growth of the Brazilian shipbuilding market is a reality and Brazil is already considered the sixth biggest shipbuilding nation in the world and is growing.
The pre-salt development alone will be responsible for a major amount of the short and mid-term demand, as the orders for pre-salt production rigs, FPSOs, MODU´s and support vessels have only just begun to be placed and are expected to be massive.
BNDES (Banco de Desenvolvimento Social), or Brazil´s development bank and major financing institution will award around $70b to the Brazilian shipbuilding industry in 2010 alone. Part of this financing is done through the FMM “Fundo da Marinha Mercante” or Merchant Marine Fund.
All of this is driven by the projection that the world oil demand is pegged to grow from the present 85 million b/d to around 107 million b/d by 2030.
