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Norwegian-Brazilian research partnership

Norway has signed a petroleum R&D cooperation with Brazil that will help unlock valuable resources in their challenging basins and open up for opportunities in the world’s largest offshore markets.

Brazil and Norway share much of the same petroleum challenges. Each has resources in demanding environments, complex geology, and deepwater subsea field developments.

Norwegian-Brazilian research partnership, Photo: Norway’s Ministry of Petroleum and EnergyNorway’s Ministry of Petroleum and Energy signed a R&D partnership agreement BN21 (Brazil-Norway in the 21st Century) with Brazil’s Ministry of Science, Technology and Innovation last year that seeks to harness their petroleum competence to tackle these common challenges. The collaboration brings together the government, universities, research institutions and industry in both countries in the field of oil and gas research and technology and exchange of human resources.

Kåre Fostervold, Norway’s Deputy Minister of Petroleum and Energy, highlighted R&D within exploration technology addressing complex pre-salt basins – where most of Brazil’s major finds have been made -- and subsea technology as areas of common interest.

“Given the demanding and difficult offshore environment in Brazil and Norway, both our countries will require technology in the high end based on research and knowledge,” Fostervold said during a SINTEF seminar in Rio last November in connection with the signing of the BN21 partnership. “The agreement provides an excellent framework for kick starting concrete projects between industry and research communities in our respective countries.”

USD 400 Billion Market

Brazil and Norway have a history of collaborating on research. Among the most recent examples, Innovation Norway signed an agreement in 2011 with Brazilian state-owned oil company Petrobras to cooperate on petroleum and maritime technology. Petrobras is the world’s largest offshore operator of subsea fields and Norway’s Statoil the second largest operator in Brazil after Petrobras with responsibility for the Peregrino field.

Since then, the Brazilian market has grown only larger, accounting for most of the major oil finds in the last decade. The International Energy Agency forecast in its latest World Economic Outlook that Brazil’s output will nearly treble from 2.2 million barrels per day in 2012 to 6 million by 2035, making it the world’s six largest oil producer.

The country is seen as a key market for Norwegian suppliers. Brazil is the third single largest market for Norwegian suppliers with about NOK 25 billion in turnover and the world’s largest offshore market for international supplies and service industry, according to figures by Rystad Energy. Combined Brazil and Norway represent a market potential exceeding USD 400 billion in offshore expenditures during 2014-2017.

R&D Bonanza

This opens up for R&D opportunities given that Brazil has adopted a similar technology investment agreement resembling Norway’s research policies from earlier days. Companies that operate on the Brazilian shelf must allocate at least one per cent of their turnover in the country into R&D in Brazil. This money is put aside in a Special Participation Fund (SPF), which is managed by the Brazilian Petroleum Directorate. At least half must be used by SPF-accredited universities and research institutes. The fund reached USD 428 million in 2010.

Statoil operates the Peregrino field in Brazil, which came on stream April 2011. Photo: StatoilSINTEF has set up a subsidiary in Rio called SINTEF Brasil, its first major overseas initiative, to take part in this attractive R&D market. It received official accreditation in 2013 to apply for project financing from the fund. It won its first three contracts worth USD 4.8 million last year. Two of them are research projects with the Chinese oil company Sinochem on the Peregrino field regarding petroleum production in deep waters and environmental impact modelling, while the third with Petrobras will focus on multi-phase oil and gas flows with high CO2 content.

BN21 Ambitions

The goal of the BN21 strategy is to develop an action plan for the development of jointly needed technologies within exploration, development and production of petroleum, including sharing experiences about the interaction between universities and industry, such as the Norwegian R&D fund DEMO 2000. As part of that goal, stakeholders Statoil and Petrobras will establish Technology Target Areas for joint collaboration under areas such as subsea technology, marine geology, enhanced geology interpretation, exploitation of oil wells with nanotechnology, geoscience, enhanced oil recovery and drilling.

According to Torgeir Knutsen, assistant director general at the Norwegian Ministry of Petroleum and Energy, there is hectic level of activities related to BN21 planned this year. Among the initiatives are another research and technology conference in Rio this November, arranged by the SINOS alliance (SINTEF, Institute for Energy Technology IFE, NTNU, University in Oslo, and SINTEF Brasil), and a conference this September by the Center for Integrated Operations in the Petroleum Industry in Trondheim, where Petrobras will hold presentations and meet with Norwegian energy minister Tord Lien.

In addition, Innovation Norway’s Rio office will pursue R&D cooperative efforts on a project basis with the Brazilian research institution FINEP, while the Research Council of Norway negotiates cooperation agreements with its Brazilian counterparts FINEP and CNP (National Council for Scientific and Technological Development) for common announcements of research grants. As part of the BN21 collaboration on exchange of human resources, Norwegian Shipowners’ Association’s Brazilian subsidiary ABRAN has started a six-month pilot project to educate offshore personnel on supply ships. Its goal is to establish a training simulator centre in Rio.

Read more articles on the Norwegian Oil & Gas industry here.

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