Upload
dohanh
View
214
Download
0
Embed Size (px)
Citation preview
Management Presentation Rio de Janeiro | September 2014
2 2
Index
Funding Structure
The Company
Portfolio
3 3
Index
Funding Structure
The Company
Portfolio
4 4
Recent offshore discoveries have increased Brazil’s potential as an oil producing country
Brazil has become a global player in the oil industry
Recent discoveries have positioned Brazil as one of the top 10 oil
producers in the world and are projected to increase production over 95%
between 2010 and 2019
− Potential to become one of the top 5 non-OPEC players within the
next ten years
− By 2014, Brazil is expected to account for almost 30% of the Latin
American oil supply
The Pre-salt play comprises an area comparable in size with the Gulf of
Mexico, with 2,000m average water depth and 7,000m average basin
depth
− Announced reserves between 23.4 – 27.4bn boe²
− Current production amounts to ~550,000 boed¹, and is expected to
represent 53% of domestic production by 2020
Proven reserves vs Brazilian potential
351
346
329
313
187
172
164
145
144
134
112
81
67
56
41
39
33
26
21
20
19
17
17
14
Russian Federation
Iran
Venezuela
Saudi Arabia
Canada
Qatar
Iraq
Brazil Post-Lula
Turkmenistan
United Arab Emirates
Kuwait
US
Nigeria
Libya
Kazakhstan
Algeria
China
Australia
Indonesia
Malaysia
Norway
Brazil Pre-Lula
Egypt
Azerbaijan
Source: BP Statistical Review of World Energy 2012
8.5x
(billion boe)
Campos
Basin Santos
Rio de Janeiro
Pre-salt area overview
Total area: 149,000 km2
Area under concession: 41,772 km2 (28%)
Area not under concession: 107,228 km² (72%)
Petrobras’ interest: 35,739 km2 (24%)
Santos
Basin
Paraná
Espírito Santo
Basin
Espírito
Santo
Paranaguá
Florianópolis
Santa
Catarina
São Paulo
Rio de
Janeiro
Campos
Vitória
Minas Gerais
Pre-salt Discovery
(1): Monthly Production Report – ANP (2): Source: Petrobras
5 5
Overview of Sete Brasil’s history
Brief Overview
In 2006 Petrobras discovers Pre-salt one of the largest fields discovered in the last 30
years in the world
Pre-salt Discovery
One of the largest recently discovered oil provinces, with total area of
~149,000km² and reserves ranging from 23.4 to 27.4bn boe (1)
Pre-salt is a game changer for Petrobras, for Brazil and for the oil
industry as a whole
Pre-salt Development & Local Content Policies
Oil Companies interested in exploring Pre-salt will need to comply with
growing demands related to Local Content requirements
Such obligations vary from field to field and from Exploration and
Production Development Phases, but in all cases are high figures
undertaken in the Concession Contracts (for at least 29 years)
Brazilian Local Market Limitations
To comply with the high demand for Local Contents, Oil Companies will
need a strong and reliable Local Market
1
2
3
It will be very difficult to convince the
Supply Market (local or international) to
grow in Brazil without the means to
support such growth feasibility
Brazilian Local Market is limited to cope
with demanded volumes although with
a very good history of quality, specially
for some specific niches
Brazilian Local Industry will need to
grow fast, new local companies will have
to be developed and international
market suppliers will need to be
attracted to establish branches in
Brazil
Source: Petrobras and Sete Brasil. (1) Lula basin: 6.5bn; Lula-Iracema basin: 1.8bn; Sapinhoá basin: 2.1bn; Transfer of Rights: 5.0bn; Libra: 8–12bn (estimate).
6 6
Brief Overview
Back to 2008 there were not enough rigs available in the market with the characteristics
demanded for drilling wells in Pre-salt a huge number of rigs should be constructed
Drilling Rigs Demand & Local Content
Pre-salt demands a very large number of drilling rigs (originally 40 and
growing with the recent new discoveries)
ANP local content policy requires a considerable Brazilian content (55%
to 65%) for drilling units to be used in the Pre-salt
Pre-salt Characteristics vs. Existing Rigs
Back to 2008 only a handful of existing rigs could comply with the
Pre-salt characteristics (water depth, drilling length, drilling loads, etc)
The rigs actually demanded for Pre-salt should be new built, regardless
where they would be built
The huge demands as solution
The huge demands for Pre-salt, instead of a threat, could be used in favor
of the feasibility of the Local Supply Market growth, attracting the
interest of reliable companies to take part of such growth
4
5
6 However, as an oil company, Petrobras
do not contract the construction of rigs,
but only the rendering of drilling
services provided by drilling
companies Drillers should be
convinced to contract the shipyards
This situation could result into an
excellent opportunity by enabling
the placement of all orders together,
splitting the construction of the rigs in a
few number of yards
Packages comprising 6/7 rigs per yard
generate scale to attract the interest
from reliable international shipyards
to establish branches in Brazil,
reducing the construction risks and
enhancing the delivery of local content
Source: Petrobras and Sete Brasil.
Overview of Sete Brasil’s history
7 7
Brief Overview
Source: Petrobras and Sete Brasil.
Sete Brasil was created as an off-balance sheet solution to Petrobras’ rigs demand, with
scale and contractual structure capable of mitigating risks and raising funds
Large Drilling Companies Standpoint
Drillers use to place their orders for new rigs at Asian yards, largely
supported by local governments and counting with excellent track records
Market demand was then (2008) booming and most of international large
drillers had low interest to take unnecessary additional risks
Smaller Drillers Standpoint
Smaller drillers were willing to take Petrobras’ new orders, seeing
them as the best opportunity for a fast track growth
However, they did not have enough strength in their balance sheets
to raise equity, financing and guarantees (~US$0.9bn per rig)
The Missing Part
There was missing a piece in this puzzle: a company to join efforts with
the interested drillers, enhancing their capacity for providing capital
(equity and financing) and for raising the necessary guarantees
7
8
9 Sete Brasil is a facilitator, a new
ingredient in the drilling market,
created to make the local construction
of drilling units happen, but not to
replace existing players
Sete Brasil was created to allow the
construction of a large number of
drilling units in Brazilian shipyards
(greenfield or brownfield) and, jointly with
existing drillers, to charter those units
to Petrobras at market rates
Overview of Sete Brasil’s history
8 8
29
27
26
11
10
8
8
8
0
0
0
0
0
0
0
0
Revenue Backlog (US$bi)
Sete Brasil in Perspective – Scale as a Differential
Rig Count (water depth >10,000 feet)
Sete Brasil is already a key international player in the sector
Note: The charts illustrate the number of units.
Source: Companies disclosure.
Taking all 28 charter contracts with Petrobras, Sete Brasil’s total backlog totals $89bn
The Company is also top ranked by number of UDW charter contracts
89
28,2
15,4
13,7
10,7
6,8
4,1
3,8
9 9
Sete Brasil Aligns Interests and Needs from All Involved Parties – Real win-win approach
Opportunity for investors to
participate in the Pre-salt
development in a company that
provides scale, risk mitigation
and market positioning
State-of-the-art assets
supported by long term
contracts with a top charterer
providing international
agencies with a unique
opportunity for
deployment of capital
Brazilian yards need larger
orderbooks to assure financial
feasibility and to allow duplication
of the learning curve on sister-
vessels to be constructed Opportunity for
Operators to
increase activity in
Brazil
Petrobras (and potential customers) can
benefit from 6th generation UDW rigs
with high level of local content
Technical and financial knowledge combined with industry expertise
LUCE Drilling
10 10
Shareholders’ Classes & Simplified Capital Structure
Class A Shareholder
Class B Shareholder
Austria
Brazil
Netherlands
Sete Brazil’s business plan is sponsored by equity investments provided by the largest
private and government owned financial institutions in Brazil
Sete Brasil: Strong Shareholders Base
Petrobras FIP
Sondas
29 SPE
Operators
5% 95%
Sete International
15-30%
70-85%
Sete Holdco
100%
100%
Operators
(1) Strong Fund
Sete Brasil Shareholders – FIP Sondas
1
11 11
At the same time that situation created more constraints to Petrobras, it could also means
an opportunity for creating the necessary environment to resolve the Local Content issue
Rationale Summary
Why creating Sete Brasil
If Petrobras doesn’t comply, severe penalties from ANP would be due
To comply with local content on Rigs, local shipyards should be contracted to construct them
Local Content Rules were also applied to Rigs
1
To reduce construction risks and speeding up the learning curve and technology transfer,
reputable international shipyards should be attracted to install braches in Brazil
The best (if not only) way to attract them is by offering scale
Reputable Intl shipyards should be attracted
2
Rigs are assets owned and/or operated by Drillers, not Oil Companies
Scale generation should undertaken by Drillers by placing large orders to the shipyards
Rigs are not assets belonging to Oil Companies
3
Construction and Financeability risks were too high for existing Drillers to comply with
Most of Drillers did not show interest. Only a few did, but with rates 30% to 50% above market
Risks perception were too high for existing Drillers
4
Joining efforts with existing Drillers, not replacing them
Packaging all orders to generate scale and attract international yards
Creating a portfolio for diluting all involved risks
A new Company should be created
5
12
33/ 48 / 106
49 / 72 / 159
18 / 178 / 235
191 / 235 / 250
86 / 141 / 17
129 / 211 / 26
167 / 234 / 82
220 / 247 / 186
12
Organizational Structure Sete Brasil’s organizational structure was designed to promote synergies across teams associated with experienced
managers in relevant sectors such as Oil & Gas and Finance
Management Structure Board
Board of Directors: 15 members
Committees of the Board: 4 committees
Fiscal Council: 5 members
Investors with 5%-15% ownership have the right to elect one board member
Investors with 15%+ ownership have the right to elect two board members
The Board deliberates on several issues, some by simple majority, some by absolute majority and others by minimum quorum of 65%
13 13
Index
Funding Structure
The Company
Portfolio
14 14
The rigs are under construction in 5 shipyards
Shipyards Location
1
3
2
3
4
5
1
2
4 5
15 15
Sete Brasil’s 29 rigs portfolio joint venture program has 2 main advantages: (i) generates
scale to attract interest from international shipyards to Brazil and (ii) provides the best
alternative for mitigating involved risks by dilution among different elements
PB
QG
PS O
ET ODF
SD Petrobras
QGOG
Petroserv OOG
OAS/Etesco Odjfell
Seadrill
Sete Brasil’s 29-rig Structure
The Scale Approach
EAS
Sete Brasil Participações S/A
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10 #11 #12 #13 #14 #15 #16 #17 #18 #19 #20 #21 #22 #23 #24 #25 #27 #28 #29
Keppel Fels Enseada EJA ERG2
PB PB PB PB PB PB TBD QG PS QG PS QG O O O O O ET ET ODF SD ODF SD ODF SD ET ET ET
#26
PB
100%
70 a 85% (shareholders B hold the remaining 15 - 30%)
Sete International GmbH
Sete Holdco
Shareholder B
Shipyard
SPV
100%
Austria
Austria
16 16
Sete Brasil’s Assets Fleet of 29 ultra-deepwater rigs of 6th generation with proven design
Drillship Semi-submersible
equipped with submersible floating devices that provides reduced wave and drift motion effects
the deck, also called "main deck", remains above the waterline out of reach of waves, supported by the rigs’ legs or columns
its deck surface is usually larger than that of a drillship. The derrick is generally located in the center of the rig and an opening in the center of its deck is used by the drill string.
they are usually recommended for field development campaigns
regular shaped ships with a derrick at its center located above an opening in the hull (moon pool) used by the drill string
it provides a faster transit speed and higher loading and storage capacities
this kind of platform is most suited for exploratory well drilling, where a larger quantity of materials are required to be brought along due to the unknown nature of the soil to be drilled
Main characteristics
Units under construction 23 units
Main characteristics
Units under construction 6 units
17 17
Procurement Overview
Key Equipment Suppliers
All long lead items already contracted with standard and reliable market suppliers
Some of them already delivered
Supplier Country Supplier Country Supplier Country Supplier Country Supplier Country
Drilling Package
e BOP
National Oilwell
Varco (NOV)
National Oilwell
Varco (NOV)AKER MH
National Oilwell
Varco (NOV)
National Oilwell
Varco (NOV)
Dynamic
PositioningKONGSBERG
GE -
CONVERTEAMKONGSBERG
GE -
CONVERTEAM
GE -
CONVERTEAM
CATTERPILARGE -
CONVERTEAMABB AS
FLOWSERVCATERPILLAR
KAWASAKIWARTISILA
Main Elec Control
Sys. Integration
GE -
CONVERTEAMGE KONGSBERG GE GE
USIMINASUSIMINAS
ARCELOR BRUSIMINAS
USIMINAS
ARCELOR BR
TIANJIN NIPPON STEEL BULK TRADE POSCO
Bulk Material
Steel Plates USIMINAS
BrasFels Enseada Jurong ERG EAS
Power
Generation
Thrusters
CATTERPILAR ROLLS ROYCE
18 18
7
Ipojuca, PE
1,620,000 m2
160,000 ton/year
JMU/IHI Shipyard (Japan)
Key equipment already purchased Basic design complete 3 mid-ship mega blocks under
construction in Japan (IHI) Will hire 100+ experienced
Brazilian welders from Japan
Construction Contracts
Location
Size
Steel Processing Capacity
Technological Partner
Shipyard Summary
Construction Status – Sete Brasil Project
33.3% Queiroz Galvão 33.3% Camargo Correa
33.3% IHI / JMU Shareholders
P-55 lower hull João Candido (tanker) Zumbi dos Palmares (tanker)
Track Record
Operating Status
LMG Marin DRU Design
Source: Atlântico Sul.
Atlântico Sul Shipyard (EAS)
Overview
DRU#1 - Copacabana
19 19
6
Angra dos Reis, RJ
1,000,000 m2
50,000 ton/year
Keppel FELS (Singapore)
Key equipment already purchased Basic design complete and
detailed engineering at 95% Commenced construction from
Singapore using yards in Indonesia and Philippines
Lower hull of Urca arrived in Brazil in Jan’14, as scheduled
100% Keppel Fels
P-56 Platform (Petrobras) P-61 TWLP (Petrobras) P-57 module integration
(Petrobras)
Operating
Keppel FELS (Singapore)
Source: Keppel Fels.
BrasFELS Shipyard
DRU#1 - Urca
Shipyard Summary Overview
Construction Contracts
Location
Size
Steel Processing Capacity
Technological Partner
Construction Status – Sete Brasil Project
Shareholders
Track Record
Status
DRU Design
20 20
3
Rio Grande, RS
1,080,000 m2 (274,000 m2 – ERG II)
100,000 ton/year
Cosco (China)
Key equipment already purchased Basic design complete and
detailed engineering at 95% Has recently completed a new
yard in Singapore Construction of Arpoador’s started
in Dec’11 and lower hull started docking in April’14, as expected
EJA will have a floating dock and large capacity floating crane
75% Jackson Empreendimentos 25% MHI (Mitsubishi Heavy Industry)
P-55 Platform (Petrobras) P-63 integration (Petrobras)
Operating (under expansion)
Gusto
Source: ERG
Rio Grande Shipyard (ERG II)
DRU#1 - Cassino
Shipyard Summary Overview
Construction Contracts
Location
Size
Steel Processing Capacity
Technological Partner
Construction Status – Sete Brasil Project
Shareholders
Track Record
Status
DRU Design
21 21
7
Aracruz, ES
825,000 m2
48,000 ton/year
SembCorp Marine (Singapore)
Key equipment already purchased 100% basic engineering complete Detailed design in progress Yard’s extension on schedule and
in advanced stage Strike steel of Cassino started on
Jan’14, as scheduled
100% SembCorp Marine
Over 19 drilling rigs built
Under construction
Gusto
Source: EJA.
Jurong Aracruz Shipyard (EJA)
DRU#1 - Arpoador
Shipyard Summary Overview
Construction Contracts
Location
Size
Steel Processing Capacity
Technological Partner
Construction Status – Sete Brasil Project
Shareholders
Track Record
Status
DRU Design
22 22
6
Paraguaçu, BA
1,600,000 m2
36,000 ton/year
Kawasaki Shipbuilding (Japan)
Key equipment already purchased 100% basic engineering complete Detailed design in final stages Enseada started construction in
Japan in Nov’13 (outfitted hull to upper deck)
Greenfield site with state of the art design
Extensive workforce training in Japan (KHI)
35% Odebrecht 30% Kawasaki
17.5% OAS 17.5% UTC
P-59 Platform P-60 Jack Up Platform 4 FPSO Hulls (Petrobras)
Under construction
Gusto
Source: Enseada.
Enseada Indústria Naval
DRU#1 - Ondina
Shipyard Summary Overview
Construction Contracts
Location
Size
Steel Processing Capacity
Technological Partner
Construction Status – Sete Brasil Project
Shareholders
Track Record
Status
DRU Design
23 23
Index
Funding Structure
The Company
Portfolio
24 24
Funding Structure
Sete Brasil’s Target Capital Structure
Total Capex: US$25.5 bn
Source: Sete Brasil.
Local
Content; 60%
Foreign
Content; 40%
9 rigs (2015/2016)
12 rigs (2017/2018)
8 rigs (2019/2020)
1st Batch
2nd Batch
3rd Batch
75% BNDES,
FMM,
ECAs,
Other
senior
debts
25% Equity
25 25
Sete Brasil has raised over US$4,2bn of bridge loans with 8 Brazilian and international
commercial banks, in 5 bridge loan facilities, with take out from senior facilities
Pre funding
Banking Relationships
26 26
On 10/23/2012 Standard & Poor's assigned brAA+ (BB+ global scale) rating to Sete Brasil.
This note was reaffirmed in nov'13
Rating Highlights
Credit Rating
“Sete Brasil Participações S.A is a very important participant in Brazil's oil and gas industry developments as a
supplier of drilling equipment to Petróleo Brasileiro S.A. Petrobras.”
“The company's strong ownership structure, the government of Brazil's significant indirect presence through Petrobras (which
supervises the construction of the drilling rigs and holds a 9.75% equity stake in Sete) and Banco Nacional de
Desenvolvimento Economico e Social (BNDES, which provides significant financing)”
“The company's strong contractual base, including the 28 signed charter agreements with Petrobras at fixed day rates (rates
that are not dependent on commodity prices) and long 10-, 15-, and 20-year tenors (a somewhat uncommon feature for the
industry), that would provide a predictable stable stream of cash flow (which represents a backlog of about US$87 billion);
and
”The company's adequate construction risk protections including the Fundo de Garantia de Construcão Naval (FGCN), the
six-month difference between the expected delivery of the drilling vessels and the commencement date of the charter
agreements, and the fixed-price engineering procurement and construction (EPC) contracts.”
Source: S&P.
27 27
The Portfolio Advantage - Summary
Larger scale
Common construction
supervision platform
Risk diversification
(By Dilution)
Faster learning curve
(By repetition of the same construction
procedures)
Proven design with solid track record
Multiple shipyards and operators
Construction, operation and maintenance risks diversification
28 28
Executive Summary
• 29 state-of-the-art drilling rigs - 9 units already under construction (strike-steal)
• Pure ultra-deepwater 6th generation fleet scheduled to start operations from 2015 to 2020
• Field-proven designs from Gusto, LMG and Keppel FELS
• World-class equipment providers (NOV, Aker, GE, ABB, Wartsila, Kongsberg, Catterpilar, Cameron)
Assets
• Long Term Charter Agreements with Petrobras, to be deployed in Pre-salt, with US$89bn revenue
backlog
• First charter renewal date in 2027 and final in 2036
• Charter Agreements with enhanced terms and daily rates
• Charter Agreements average life of 14.5 years
Contracts
• Strategic sponsorship from the Brazilian Government in the form of industry specific programs,
construction performance guarantees and long term funding
• Petrobras as a key stakeholder due to the relevance of the project to the pre-salt
• Solid investor base formed by large financial institutions, seven world class operators and Petrobras
• Five shipyards involved in the construction supported by partnerships with global technology leaders
Stakeholders
• R$8.3bn of equity commitments (R$4.9bn disbursed)
• US$4.2bn in Bridge Facilities
• R$10.3bn (FMM) and US$9.3bn (BNDES) in long term financing approved and under documentation
stage
Funding
• 29 Rigs undertake
• Same design per shipyard expediting the construction learning curve
• Diversification of construction, performance and credit risk
• One centralized management oversight – Complete benchmarking
Portfolio Effect
This presentation was prepared by Sete Brasil and the content herein is strictly confidential. This
presentation cannot be reproduced, distributed or published by the recipient or used for any purpose
whatsoever without the prior written consent of Sete Brasil.
Sete Brasil Participações S/A CONFIDENTIAL | September 2014