Energy and Environment Innovation Systems BRICS Conference Rio -Brazil April 25/26/27, 2007 Hydrocarbons Challenges and Opportunities Adilson de Oliveira Professor Instituto de Economia Universidade Federal do Rio de Janeiro Agenda Cooperation: the opportunity Off-Shore: the challenge The OECD will be increasingly dependent on imports of hydrocarbons from the Middle East And the BRICS? Oil Balance Million Barrels per day Natural Gas Balance Trillion Cubic Feet Deep off-shore The next frontier The opportunity The Off-Shore Challenge Source: Petrobras Brazil 1974: First off-shore discovery 1981: giant fields (300m to 2100m) High complexity, high risk; high premium Petrobras decided to take the risk Geological Strategy Develop domestic capabilities Training 1300 geologists 10,000 engineers Learning by doing New models for turbidite formations Understanding the Brazilian plataform Technological Strategy Incremental innovation (until 1984) 1960/1980: acquisition and assimilation of technologies 1980/1990: adaptations and absorption of design 1990/2000: joint R&D; knowledge production 2000: joint R&D; technology exchange; specialized knowledge production Technological Strategy Source: Petrobras Technological Strategy Radical innovation Procap 1000 Procap 2000 CENPES plataform design : 30% cost reduction 1992: Distinghished Achievement Award (OTC) Oilfields Discovered (Southeastern Basins) Source: Petrobras Technologies Wet christmas tree (200m) Flexible risers Robotics (over 300m) New anchors (plastics) New technologies for liquid flow Horizontal hole Drilling mud Resistance of drillling equipment Conversion of ships Automation of plataforsms Financial Strategy Antecipate cash flow Early production systems (Sedco- Hamilton) Drilling equipment removed Replaced by small processing plant From 1977 to 1984: 17 EPS Recent Exploration Investments Source: Petrobras Reserves (oil and gas) Source: Petrobras Production Targets Source: Petrobras CONCLUSION BRICS Can have a joint strategy to achieve security of energy supply Technological cooperation for the development of deep-off-shore is critical The National Oil ompanies have a key role in this process