As the Army wanted a competing design to Bernardini’s, Engesa drafted its own plans, but it soon began to eye the overseas market. Saudi Arabia needed replacements for its 800 M-60s and AMX-30s, offering to pay several billion dollars for around 700 tanks. The UAE wanted 300 tanks. Greece, Turkey and Oman also had a demand in this area. The Saudis sought the Leopard II but as Germany would not sell to non-NATO countries they instead opened an international competition which Engesa entered with its ‘’”Osório”’’, named after the Marquess of Herval and patron of national cavalry. The Saudis called it Al Fahd after their king. From its outset the Osório broke the Army’s weight, simplicity and nationalization requirements. Nonetheless, it received official support and there was still some level of interest, to the point that two versions were made, one for export and one for internal demand.
This was now the most complex and ambitious project Engesa ever took, and it had no prior experience in the MBT field.
Its commitment now absorbed most of its financial resources and prime manpower, to the detriment of other projects, stability and ultimately its survival. Porsche was approached at first for a joint design, but the German government blocked this move. The military provided technicians and made its property available for tests. CAD-CAM was used to speed up the design process.
Engesa knew national industry couldn’t provide all of a MBT’s components and so had to resort to foreign technology. Only the chassis and the armor were Brazilian. The latter was originally discussed with Chobham but after their refusal it was made nationally (with some British help) among Engesa, CTex, Usiminas and Eletrometal; it was multi-layered and had good defensive angles at the front. The designer’s aim was to make it survivable to a direct 120 mm hit. It was tested with simulated 105 mm and 120 mm fire. Reactive armor was considered but not implemented. There was also NBC protection.

The engine was MWM GmbH’s TBD 234 V12, with an output of 1.014 hp; others from MTU or Rolls-Royce were also considered. The transmission was ZF Friederichschafen AG’s LSG3000, which was later used in the C1 Ariete. Both of these components were built within the country by subsidiaries of their foreign owners. Others were imported: Diehl BGT provided the treads and Dunlop, the same suspension used in the Challenger 1.
The most important foreign component was the turret provided by Vickers. Its design process took as its starting point previous Vickers prototypes, particularly the Mark 7/2, but had the Osório in mind and was followed closely by Engesa engineers Ricardo Schiesser and Mário Santiago. It had a French 120mm GIAT smoothbore gun and SFIM VS580 VICAS periscopes, one with a laser telemeter for the gunner and another with panoramic view for the commander. Also present were Dutch Philips UA9090 night vision views with thermal imaging for both commander and gunner. The modern fire control system included a 16-bit Marconi AFCS ballistic computer and sensors for atmospheric conditions, vehicle and projectile speed and so on. The gun was stabilized; altogether this meant the Osório could, as the newest and best tanks of its age, accurately fire at night while moving.
Another British component was Racal’s Savior radar and laser warning system, which could detect the direction and distance of enemy radiation and display it in screens for the commander and driver; complementing it were four 66mm smoke grenade launchers.
This was the EE-T2 model for export. For the Brazilian army, a simpler and cheaper alternative ($3,242 mil in 1993 dollars, compared to the T1’s $3,404, though in the Saudi contract it was sold for a third of that) was offered, the T1. Its main difference was its Royal Ordnance 105mm L7 rifled gun, more in line with what was common in tanks at the time. It also lacked thermal imaging and had overall weaker fire control.