Pushed by pre-salt development, which requires newbuild cutting-edge drillships, semisubmersibles, and supply vessels, just to name a few, the Brazilian Shipbuilding Sector is Likely to Hire 17K Pros.This hiring need was widely publicized in the mainstream Brazilian press on the same day that Ms. Dilma Rousseff commemorated her victory in the presidential run-off and secured another four years in office.

A political move, maybe, and backed by the big media, perhaps. After all, the shipbuilding sector is one of the pillars of the Brazilian leftist ruling administration. And capitalizing on inflated job creation announcements is a well-trodden strategy of government officials.

But the underlying premise is on point here. Few will argue against the fact that to get oil and gas out of the pre-salt layers deep in the Brazilian seabed, not only will more cutting-edge gear be required, but skilled people must be deployed in greater numbers as well.

"Labor" is not the biggest problem, as availability is in relatively good supply. The lack of "skilled labor" is the real problem. The bulk of the available workforce is just labor, not labor honed and ready to tackle the great challenges facing the Brazilian O&G sector as it builds out capacity. This post is a mix of facts to my knowledge of the ship and rig building industry in Brazil and also reflects some of my opinions on what is worked and what has not.

Sugar Cane Field Handlers Put on Steel Processing and Manufacturing

One of the first attempts to address this ongoing labor issue in Brazil was made in 2003-2006, by the Lula administration, the predecessor of Dilma Rousseff. Luís Inácio Lula da Silva intended to start a huge shipbuilding enterprise in his home state of Pernambuco, in northeastern Brazil, a state with no shipbuilding history and a rather a rural province.

No skilled labor could ever be found there, as opposed to in the state of Rio de Janeiro, which hosted large builders in the past. So sugar cane field handlers were recruited to be trained into shipbuilding workers.

Estaleiro (Shipyard) Atlântico Sul came on stream, teaming up with Samsung, the technology partner in the venture.

Both strived to put together the necessary skills into the minds of hundreds of field handlers, recruited as an alternative to shipbuilding labor.

The lack of expertise, along with the poor educational background of the would-be floater makers backfired, and later on, this impacted on Samsung´s call to walk away.

The PROMINP Program

Designed back in 2003, with the intent of opening doors to the local oil and gas supply chain and placing it among first class worldwide vendors, the Lula administration, hand-in-hand with Petrobras, created what is recognized as the PROMINP program. The acronym stands for “the National Oil and Gas Industry Mobilization Program”.

From that time on, Petrobras started to give out orders for new buildings to local shipbuilders.

Realizing that skilled labor was in short supply, the PROMINP program started to offer training schools for would-be ship and rig building workers, technicians and engineers alike. Programs were also offered to broaden the expertise of those already working in the field.

The training schools attracted thousands, perhaps millions, and although well designed, they are limited to offering basic skills, not delving into the particulars of sophisticated equipment and systems.

Applicants, after becoming workers, need a continuous hands-on attitude to catch up with technical and schedule requirements.

Taking the Matter into The Industry's Own Hands

Big industry interests soon realized they could not sit back and wait for the government's help. Several decided to take the matter into their own hands by finding ways to procure the expertise required by the workforce to stand up to the current industry requirements.

That included shipbuilders, vendors and designers alike. Now this effort may have been no big deal for the heavyweights in the industry to decide to undertake, but it is quite a tough situation for less well-capitalized players.

Nevertheless, sitting idle was no longer the game, action was necessary.

Estaleiro Atlântico Sul teamed up with Japan´s IHI (Ishikawajima Harima Heavy Industry), for technology transfer and shipbuilding expertise.

Training schools were set up at the shipbuilding facilities and the shipyard started recruiting labor with previous experience in the industry. IHI transferred specialized personnel to Brazil, who continuously monitor the project’s progress and also provide training.

Engineers, managers and other key people often fly to Japan to spend some time at IHI - a strategy aimed at putting together the required skill set, management approach and building expertise in their minds.

Enseada Indústria Naval, a major rig and ship building enterprise between local majors Odebrecht, UTC and OAS, together with Japan´s Kawasaki Heavy Industry followed a similar path of Atlântico Sul.

Enseada is up against the huge challenge of delivering seven drillships to Petrobras-controlled Sete Brasil by 2022 - the first ship is scheduled for delivery in 2016.

Other big shipbuilders, one way or another, are seeking international partners to tackle the challenge of delivering the orders on schedule and with the necessary quality standards.

Overcoming the challenge is much harder work for less well-capitalized players, like local manufacturers and service providers. These companies are attempting to provide training to their workforce in any way they can afford, or outsourcing projects and services.

Political or Pragmatic

Although the efforts by the industry at large deserve some kind of credit, a more pragmatic approach should be adopted by the government, Petrobras and industry players.

Many of the big shipyards are government designed enterprises, employing, many times, people based on their political credentials rather than on their skills and job experience, often inflating offices and industrial sites with unskilled people and adding no value and costs to the already expensive projects.

The local content policy often plays out as a roadblock, limiting the industry investment capacity, extending deadlines and adding cost as opposed to value to major projects.

That being said, an extensive review of the objectives of such policy and how can it actually help the Brazilian industry should be exercised, with the necessary discretion to aim at actually playing in favor, not against, Brazil.

The focus is to be on what needs to be done and who is really necessary, no matter what the tradeoff may be.

It seems quite straightforward, but political will and determination are necessary to make tough calls, which may hurt or be contrary to someone else´s interests.

Final Words

This post is a mix of facts to my knowledge in the ship and rig building industry in Brazil and also reflects some of my opinions. 

I have not attempted to write an extensive survey-based piece, but rather to provide a fairly accurate picture to Oilpro readers. 

Statistics and the intricacies of the industry are not readily available which, along with limited time, do not allow the publication of a more detailed post. 

I welcome your comments, as many of you may be in possession of more detailed information on this matter or may wish to enhance the discussion.