Petrobras Boosts Shipbuilding in Brazil

This week, Petrobras signed with Hidrovia South American Logistics S.A., in a ceremony held at the Company’s main office, in Rio de Janeiro, the six remaining contracts for the EBN2 Program (Brazilian Shipping Companies). The hiring is for the chartering of six Panamax-class vessels, of 63,500 dwt each.

Five will transport light products (such as gasoline and diesel), and one dark products (oil, for example).

Hidrovia South American Logistics SA belongs to the NSAL group (Navios South American Logistics Inc.), an association between NAVIOS (Navios Maritime Holdings Inc.) and Argentine group Horamar.

The EBN involves chartering vessels built by Brazilian companies in shipyards located in Brazil for fifteen-year terms. It also requires that the vessel be registered under the Brazilian flag for the duration of the contract. There were two phases: EBN1 and EBN2. Nineteen vessels were chartered in the first, and 20 in the second.

The program is part of a series of Petrobras initiatives designed to boost shipbuilding in Brazil, and the 39 vessels will be built in Brazilian shipyards in the period ranging from 2011 to 2017.

Under this initiative, Petrobras helps revitalize of the rigger industry in Brazil, bringing domestic alternatives to meet the demand for coastal transportation, a strategic activity that not only accounts for 80% of Petrobras’ shipping operations, but also reduces exposure to international freight market volatility.

The EBN is aligned with Petrobras’ guideline to invest and act in partnership with domestic businesses to develop the country. It is estimated that the program will help create about 30,000 direct and indirect jobs during vessel construction and in excess of 2,000 permanent jobs over the life of the ships.

The expectation, from the standpoint of the broader shipping industry in Brazil, is the creation of a significant community of owners of bulk liquid vessels sailing under the Brazilian flag, initially focusing on coastal sailing and, in the future, enabling the riggers also to operate in the long-haul international routes that are connected to the Brazilian market.

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Source: Petrobras, May 30 , 2011.