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Brazilian Government Photo: Ricardo Stuckert

October 11, 2005

Brazil launches tanker building program

Brazilian President Luiz Inacio Lula da Silva yesterday formally launched a $1.1 billion tanker building program. It will see Transpetro, the tanker subsidiary of national oil company Petrobras build 26 ships in Brazilian yards.

Yesterday's ceremonies marked the opening of bidding on 10 Suezmax tankers, five Africamax tankers, four Panamax tankers, four products tankers, and three LPG tankers. Eleven shipbuilding consortia that qualified to bid were given formal letters of invitation to participate. They include partnerships between Brazilian yards and international yards such as Aker, Mitsui and Hyundai.

Brazil's National Economic and Social Development Bank (BNDES) will finance up to 90% of the expenses to build the first ships. The resources will come from the Ministry of Transportation's Merchant Marine Fund. The repayment period is 20 years, at an annual interest rate of 4%.

The shipyards that win the bids will receive 15-20% of the cost of each ship in advance. It is expected that around 20 thousand direct jobs will be created.