This case study originally appeared on page 41 of the NCUB report Growing Value: Business University Collaboration for the 21st Century. The report is part of the Growing Value project, seeking to maximise the economic impact of the UK’s research base through university-business collaboration. Read the full report.

BG Group is building a significant business in Brazil through oil and gas reserves in the Santos Basin’s pre-salt. Brazil is a key growth asset in the Group’s portfolio, offering significant reserves, ease of access to world crude markets and a growing domestic gas market

Based on BG Group’s activity in Brazil, concession agreements have been put in place with the Brazilian Government for the sub-salt fields in Santos Basin stipulating that BG Group will allocate 1% of gross revenues from such fields to Research and Development (R&D) in Brazil. The 1% levy is a contractual obligation applied to all concessionaries whenever their oil and gas production surpasses a specific threshold by field. As a result, BG Group expects to invest approximately $2 Billion in R&D in Brazil up to 2025.

The Brazil R&D levy, as it is commonly known, is having profound consequences for how BG Group is implementing its global technology strategy. BG Group has actively embraced the opportunities that the R&D levy creates and has centralised key global technology activities in Brazil.

The construction of BG Group’s Global Technology Centre (GTC) in Rio de Janeiro’s Science Park is currently underway, with employees already working on global technology activities within the Group’s existing facilities. The GTC will play a pivotal role in identifying technology challenges faced by BG Group in Brazil and in its assets worldwide. The Centre will work to source solutions to these challenges both from within Brazil and the rest of the world.

The GTC itself will not be a research centre: there will be no labs, no white coats. Rather, the Centre will source R&D projects with partners in Brazil. The R&D Levy regulations determine that at least half the obligation is spent within Brazilian Universities and Research Institutes, whilst the other half can be spent through industry and outside of Brazil. This includes, for example, private suppliers with many of these companies now establishing research facilities in Brazil.

The GTC will coordinate dedicated BG Group Institutes within Brazilian Universities and these will look at specific fields of interest (for example, Carbonate Rocks, Gas Utilisation, Carbon Management). BG Group is developing activities to bridge the academia-industry gap in Brazil and it is actively promoting partnerships to cover levy requirements.

Through its relationships with the Brazilian Government, BG Group understands the Government’s priorities and is active in helping to establish public private partnerships in Brazil. For example, BG Group was the first company to announce its participation in President’s Dilma flagship programme “Science without Borders”, which aims to send 100,000 Brazilian students and researchers abroad. BG Group expects to contribute up to $100 Million to this programme and in implementing the partnership trainBrazilian researchers in leading Universities worldwide. The first cluster of Doctoral and Post-Doctoral students are currently being trained at the University of Aberdeen where they will focus on Sedimentology. BG Group and the National Council for Scientific and Technological Development (CNPq) will cover the full economic costs of this training. BG Group is encouraging long-lasting collaboration between UK Universities and their counterparts in Brazil.

BG Group is working in partnership with the Brazilian Government to ensure that the R&D Levy funds help to establish a broader oil and gas knowledge-base in Brazil. BG Group believes that utilising partnerships to implement the R&D Levy requirements will facilitate knowledge sharing and transfer, enabling the Brazilian industry to benefit from BG Group’s investment in R&D.

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