Bureaucracy prevents investment in small oil and gas companies in Brazil

Micro, small and medium enterprises supplying the oil and gas industry are dying on the beach when it comes to obtaining funds from BNDES (National Bank for Economic and Social Development), a government bank.

With no experience or accounting advice or legal, these companies often take up to eight months to complete the process, when they do.

MSMEs account for 85% of companies in the sector, according to a study issued by the bank itself, but the lack of funding leads companies to not achieve their goals and further complicates the development of the sector, especially with regard to local content requirements for oil, experts say.

The direction of BNDES said it has taken steps to assist MSMEs to obtain the resources, but the difficulties are great. Because of this, disbursements to the sector this year should not reach the R$ 700 million number provided earlier.

Of the nine companies that got funding from the BNDES P & G program (for promoting the oil and gas industry supply chain) in the last 12 months, seven are considered large or medium-large.

According to bank data, together they managed to raise R$ 645.4 million for investments, while the only two small and medium raised only R$ 55.8 million -8.64% of the total.

Among the big companies that got financing are Odebrecht Oil & Gas, Techint, Prysmian, Georadar, Ruhrpumpen, Brasco and Lupatech.

Source: http://www1.folha.uol.com.br/mercado/1168675-burocracia-trava-investimento-em-pequenas-empresas-do-petroleo.shtml

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Joe Cloud
Dutch, American, Brazilian... lived there for 5 years and owns property in Brazil. Out of the country for a few years now and would like to go back, however current circumstances tell me it's not the right time.

Published by Joe Cloud

Dutch, American, Brazilian... lived there for 5 years and owns property in Brazil. Out of the country for a few years now and would like to go back, however current circumstances tell me it's not the right time.