Giant Petrobras to Buy 42 Ships Made in Brazil

Brazil’s Transpetro, subsidiary of Petrobras in the transport sector, launched November 25 an edict for tender qualification for the manufacture of 42 ships.

This will be the largest order made by a single company for the Brazilian naval industry, in a project considered decisive for the recuperation of the large vessel construction sector in the country.


Competition will be open for foreign companies as long as they are settled in the country.


The ships to be built will be the Suezmax, Aframax and Panamax, Products and LPG (gas) models, and will add approximately 3 million gross tons of cargo capacity to the company’s fleet.


All ships will be manufactured in Brazil, so that the company can fulfil its job as an inducer of modernization and development in the Brazilian naval industry.


The objective of the Program for Modernization and Expansion of the Fleet of the state-owned oil giant is to replace ships that are to stop operating and renew and expand the fleet.


State-owned Petrobras also wants to increase the Petrobras System transport capacity to respond to the needs and contribute to the revitalization of the Brazilian naval industry, promoting economic and social development in Brazil, with the generation of jobs and income.


“We don’t want to simply order ships. We want to build ships in Brazil. The government of President Luiz Inácio Lula da Silva, since the beginning, decided to support the reactivation of the Brazilian naval industry on a solid and sustainable basis,” said Sergio Machado, president of Transpetro.


During manufacture of the vessels, the program will generate approximately 20,000 jobs. The undertaking will have two ordering phases.


In the first phase, Transpetro will hire the manufacture of 22 tankers, with an investment of about US$ 1.1 billion. The forecast is that the first of these new ships will be sailing in 2006.


For the second phase, the company will start expanding the fleet, ordering another 20 tankers. The investment forecasted will be of about US$ 800 million.


The financing is granted by the Brazilian Development Bank (BNDES), with resources from the Merchant Marine Fund (FMM).


In a credit line directed especially at the manufacture of ships, the bank will finance 90% of the vessels’ value, amortized in 20 years, with interest of 4% per year.


During the manufacture, Transpetro will pay the shipyards 15% to 20% of the hired value, paying the remainder on delivery.


The tender is going to generate investment in shipyards and will represent an opportunity for various sectors that are included in the productive chain of the naval industry.


The vessels will demand large volumes of different inputs. The first 22 vessels alone will generate orders of around 290,000 tons of steel plates and profiles, 125,000 tons of tubes, over 6 million liters of paint and 2,200 kilometers of electric cables, as well as various other items that may be supplied by Brazilian industries.


Although the country has 12,000 kilometers of navigable waters, including coast and rivers, navigation in Brazil is basically explored by foreign companies. Vessels sailing under the Brazilian flag currently represent just 14% of the activity.


Therefore, the Transpetro program is strategic for the country, which must generate turnover in its economy and has a great demand for vessels, and for Petrobras, which currently uses around 110 tankers, 60 being rented from foreign companies.


“Maritime transport plays a strategic part in development projects and in trade relations between nations,” recalled the Transpetro president.


“Exchanges across the ocean represent 80% of transactions worldwide. In the case of Brazil, this percentage is even greater, with maritime transport answering to over 95% of our foreign trade,” he finished off.


Nowadays, just 4% of total freight generated by Brazilian foreign trade is paid in the country currency. Most of it, 96%, is paid in foreign currency to foreign companies.


When considering the entire maritime sector, Brazil sends over US$ 6 billion out of the country every year for the payment of freight. This figure rises at the same rate as Brazilian participation in foreign trade rises.


Two-phase Tender


The tender process will be divided into two phases. The first phase, which is now beginning, is pre-qualification of companies that may participate in the tender in future.


Pre-qualification is open to companies that are already operating in the sector or to companies that may be established, allowed to participate alone or in consortiums. The participation of foreign companies is also allowed, but the vessels must be built in Brazil.


The objective of pre-qualification is to select companies with a financial, management, and technical stability that prove they are capable of producing in Brazil, in modern shipyards with good technological level, vessels with good quality and international prices.


Proposals by those interested should be handed in at the Transpetro offices in Rio de Janeiro, on January 31 2005.


Up to 45 days after delivery of the envelopes, Transpetro will announce the names of the companies that have been pre-qualified, which are capable of participating in the tender for the tankers.


The forecast is that the tender process for the first phase of the orders should be completed up to the end of the first half of 2005, when the first construction contract should be signed.


The edict for pre-qualification may be accessed, for analysis, on internet site www.transpetro.com.br


ANBA ”“ Brazil-Arab News Agency

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