Petrobras on $3.46 billion FPSO hull spree

Petrobras and its partners have signed contracts worth $3.46 billion with Brazil’s Engevix Engenharia S.A. They cover the construction of eight FPSO hulls at the Rio Grande Naval Hub, which is based on the Estaleiros Rio Grande shipyard with its 133 m x 350 m dry dock and giant gantry crane,

The FPSO’s (floating, production, storage and offloading units) based on the hulls will serve as production platforms in the first phase development for the pre-salt area in the Santos Basin.

The hulls have been ordered as part of a new strategy for the construction of production units, designed to simplify projects and standardize equipment. Producing identical hulls in series will accelerate the construction phase, and allow economies of scale and cost optimization.

Each FPSO will be able to process up to 150,000 barrels of oil and 6 million cubic meters of gas per day. All units are expected to start operating by 2017 and to reach the production targets set in Petrobras’ Business Plan for the pre-salt area. The expectation is that the platforms will add about 900,000 barrels of oil per day to domestic production when operating at maximum capacity.

The local content in the hulls is expected to reach around 70 percent. The first steel shipments will take place in January, and hull constructions will start in March. The first two hulls will be delivered in 2013, and the others in 2014 and 2015.

Six of the eight units, six will be operated by the consortium formed for Block BM-S-11, where the Tupi and Iracema areas are located. The two others will be operated by the consortium formed for Block BM-S-9, where the Guara and Carioca fields are located.

The Block BM-S-11 consortium is operated by Petrobras (65%), in partnership with BG E&P Brasil Ltda. (25%), and Galp Energia (10%). The Block BM-S-9 consortium is operated by Petrobras (45%), in partnership with BG E&P Brasil Ltda. (30%), and Repsol Brasil S.A. (25%).

November 14,2010