01-12-2017

Odebrecht Oil & Gas revives FPSO drive

Upstream - Fabio Palmigiani / Rio de Janeiro

Brazilian contractor looking to use co-operation with Teekay to increase floater contracts.

BRAZILIAN contractor Odebrecht Oil & Gas (OOG) is betting on its partnership with Canadian player Teekay Offshore to snatch more contracts for the supply of floating production, storage and offloading vessels in Brazil and abroad. The 50:50 OOGTK joint venture was formed early in the decade in an attempt to meet the expected growing demand for FPSOs, and in six years of existence, the companies have delivered two floaters for Petrobras.

The duo has so far focused on mid-sized FPSOs, but soon hopes to start building and operating larger units. “The original strategy of our partnership was to aim at smaller FPSOs that we knew was a niche market, outside the main focus of the big floater contractors, and where we could add value and be more competitive,” said OOG superintendent director of offshore integrated services Jorge Luiz Mitidieri.

“However, the joint venture is now starting to display stronger appetite for larger FPSOs of at least 100,000 barrels per day of oil.” After building the 80,000 bpd Cidade de Itajai FPSO for the Bauna field and the flagship 50,000 bpd Pioneiro de Libra FPSO for the soon-to-be-renamed Mero field, OOGTK believes it is ready for a bigger challenge. “We are going to analyse project by project. The ideal scenario for us would be to secure next a 100,000 bpd FPSO and then, in two or three years, start building a slightly larger unit,” Mitidieri told Upstream.

Petrobras recently announced plans to launch tenders next year for two FPSOs, one unit for the revitalisation of the Marlim field and another for an integrated development of the Parque das Baleias complex. Upstream understands each floater will be able to handle 100,000 bpd. “A project like Marlim or Parque das Baleias would be the icing on the cake. An FPSO with a processing plant of about 17,000 tonnes would be a dream project for us following Pioneiro de Libra,” Mitidieri added.

“We see competition from the likes of Bumi Armada and Exmar, but our main rival in Brazil is BW Offshore, because they are also familiar with the local market and, like us, have contracts with Petrobras.” OOG and Teekay are also looking for opportunities outside Brazil, with an agreement to potentially bid together for offshore projects in West Africa as well as Mexico. According to Mitidieri, the partnership does not extend to the North Sea. Mitidieri said: “Our plan is to bid together again. We have been operating Cidade de Itajai for four and a half years and we will be operating Pioneiro de Libra for 12 years. The partnership is working and we want to keep growing, so if it ain’t broke, don’t fix it.”

He added OOGTK intends to diversify its client base by competing in tenders from operators other than Petrobras. “We have a long-term project. Even though we are initially aiming to win contracts in Brazil with Petrobras, we are actively pursuing
other clients to optmise our portfolio and expand our operations abroad,” Mitidieri said. “If we win an FPSO contract with a company like Shell or Total in Brazil, for example, this will boost our chances of securing a similar contract with these companies abroad. Working with other operators will also increase our expertise.”

However, one major obstacle for OOG in its quest for growth is that the company remains barred from signing new contracts with Petrobras. OOG was blacklisted by the oil giant nearly three years ago in the wake of the Car Wash corruption scandal. “We still believe OOG is fit to participate in Petrobras’ bidding processes, but we remain out, even though the company was not involved in any of the crimes investigated in the Car Wash probe. We are blacklisted because our parent, the Odebrecht Group, is blocked,” said Mitidieri.

Late last year, the Odebrecht conglomerate agreed to pay 6.7 billion reais ($2.06 billion) as part of a leniency deal to settle corruption charges in Brazil, the US and Switzerland. “In theory we are clean, but Petrobras is conducting its own due diligence process. The problem is that if we remain barred for too long, we will not be able to participate in upcoming FPSO tenders in partnership with Teekay. They will have to bid alone,” said Mitidieri. Despite being temporarily out of Petrobras’ vendors list, Mitidieri said OOG was invited to bid in a recent Shell tender to charter a drilling rig for its Parque das Conchas development in the Campos basin off Brazil.

Output under way at Pioneiro de Libra

BRAZIL’S Petrobras has started output from the much-anticipated Libra pre-salt area in the Santos basin via the Pioneiro de Libra floating production, storage and offloading vessel, writes Fabio Palmigiani. The FPSO, able to handle 50,000 barrels per day of oil and 4 million cubic metres per day of natural gas, began its first 12-month extended well test in Libra from well 3-RJS-739A in the north-western section of the block. “The goal of this production test is to evaluate the dynamic behaviour of the oil reservoir and deepen the knowledge on the characteristics of the deposit,” Petrobras said.

The test, the first in a series to take place in Libra, is also aimed at supporting the development and optimisation of all subsequent production units to be installed in the area, according to Petrobras. All gas will be reinjected once well 3-RJS-742 is linked to the FPSO. In the meantime, market regulator ANP authorised Petrobras to flare up to 105,000 cubic metres per day in the first six months of the test. Petrobras has so far drilled 12 wells in Libra, most in the north-western section, where the company intends to file its declaration of commerciality and rename it as the Mero field.

The $1 billion dynamically-positioned FPSO — a 50:50 joint venture between Teekay Offshore and Odebrecht Oil & Gas — is chartered for 12 years. The first EWT was meant to start in July, but an incident during the pull-in operation of the electro-hydraulic umbilical of the oil production well forced Petrobras to postpone it until everything was sorted. Petrobras operates the Libra production sharing contract with a 40% stake and is partnered by European players Shell and Total on 20% each and Chinese companies China National Petroleum Corporation and China National Offshore Oil Corporation on 10% each.

Source: Upstream