Rystad Energy considers Brazil to be the offshore market with the biggest potential in the world and opens subsidiary in Rio de Janeiro.
On the occasion of the opening of the Brazil office, NBCC and Rystad Energy organized an event where the latest industry developments and Brazil´s position in the global oil and gas market were discussed. The event took place in the Federação das Câmaras de Comércio Exterior (FCCE) in downtown Rio de Janeiro on September 9, 2015.
On behalf of NBCC, treasurer and board member Johnar Olsen welcomed Rystad Energy – to Brazil and as a new member of the NBCC. Managing partner Jarand Rystad talked about expectations and when the market will balance supply and demand, while Kjetil Solbrække, head of the Brazil office, talked about Brazil´s position in the global market. Two permanent employees will take care of business at the new Rio office, and Therese Fuglerud will accompany Kjetil Solbrække.
«We look forward to opening our office in Rio de Janeiro and see a lot of opportunities in the Brazilian market. I really enjoy being here in Rio and the Brazilians are a wonderful people», Mr. Jarand Rystad said on the occasion.
According to the company executive, Rystad Energy is experiencing growth, despite the challenging situation in the global oil and gas markets.
«In difficult times you are able to recruit the best professionals, and we are actually experiencing growth in our business activities in what has been a weak year for the global industry. People in the business are seeking facts and knowledge», Mr. Rystad says.
And this is exactly what Rystad Energy is providing: The company is an independent oil and gas consulting services and business intelligence data firm, offering global databases, strategy advisory and research products for E&P and oil service companies, investors, investment banks and governments.
«You can say we have revolutionized the market for business intelligence as we have created a complete, digital model of the international oil industry, where all oil and gas fields are included in a database, showing both production profiles and economic and financial profiles for the different fields and also for the owners of the fields. We are able to create models and calibrate all dimensions of the industry in a way that nobody has done before. This is something brand new to the Brazilian market», Mr. Rystad explains.
Rystad Energy was established in Oslo, Norway in 2004.
«Currently we are expanding all over the world, and we see that the players in the industry are seeking fact-based information on the oil industry. Rystad Energy is currently working with companies, investors, oil service companies and authorities all over the world. As Brazil is an important oil nation, there should be plenty of opportunities here», Jarand Rystad says.
In the Brazilian market, the company expects to attract clients in all the above mentioned categories.
Two steps forward
As Rystad Energy is offering advisory services to the clients, Jarand Rystad agrees to share his views on the current situation in the Brazilian market in this interview with NBCC.
«You could say that we are moving three steps back and two steps forward. The three steps back are the weaker oil price, the Lava Jato scandal and the unpredictable rules and regulations in the Brazilian industry», he says.
As a consequence, many good projects in Brazil becomes marginal or uneconomical. The current crisis can owever work as a catalyst to improve the framework and competition in Brazil. This will be considered an important step forward, according to Mr. Rystad.
«The proposal in the Senate to change the rule for Petrobras as the sole operator in the pre-salt development will hopefully result in more pluralism and more competition in the market, something the country really needs. The Brazilian oil and gas industry is more than just Petrobras, and it is in the country´s interest that the authorities encourage generation of income and profit from the rest oil industry. A profitable oil and gas industry will result in more employment and revenues which can contribute to the development of the country. Rules and regulations need to be realistic and more flexible . One example is the Brazilian local content requirements», Mr. Rystad says.
«Local content policies are common in most oil and gas rich countries, however it has to be based on creating a long term sustainable and profitable business. Only then the country will see stable employment and revenues from the sector», he says.
Petrobras and Brasil has a lot of very good professionals within the oil and gas sector, but Rystad Energy considers the challenges to be huge, and there is still a lack of qualified professionals and companies in the Brazilian offshore industry.
«It takes decades to build a sustainable and competitive industry, and the local content policy has to reflect this fact. Moving too fast will only result in losses, unemployment and companies not able to continue the activity. The consequence today is that the Brazilian oil industry is not able to develop the oil fields in the best possible way. We believe that this is about to change as we expect the policy to be modified to a more realistic level. The global oil and gas industry are having their eyes towards Brazil these days. More diversity of operators and a more realistic policy will generate a huge interest to invest and bring competence and experience to the country. It will generate more employment and increase the revenues for the country, », Mr. Rystad says.
According to Rystad Energy, Brazil will become the biggest international offshore market within a few years.
«Currently, Brazil is among the three biggest markets, alongside Norway and the US. Brazil is the market with the biggest growth potential, and from 2019, we expect Brazil to become the biggest offshore market in the world», Jarand Rystad concludes.
By Runa Hestmann, NBCC journalist