Brazilian state-controlled oil company Petrobras has decided to split contracting of the integration work on two major floating production, storage and offloading vessels designed to operate in the Santos basin pre-salt province, meaning a consortium formed by Technip and Techint is now well-placed to snatch a slice of the billion-dollar-plus prize.
Petrobras disclosed in late 2012 the bids in a tender covering integration and construction of topsides modules for the P-74 and P-76 FPSOs.
Brazilian shipyard EBR — formed by Toyo Engineering and Setal — finished ahead with a bid of $1.34 billion covering both units.
EBR also submitted individual proposals of $740.8 million each for the P-74 and P-76, placing it in front of the competition as well.
However, it is understood that Petrobras discussed in a recent board meeting it would be extremely risky to award a single contract to EBR, given the amount of work to be done and because EBR is relatively new to the offshore construction market.
The group is investing about 1.2 billion reais ($588 million) to build a shipyard in Rio Grande do Sul state that will be capable of performing integration services on two FPSOs simultaneously when fully operational in 2014.
One well-informed source said Petrobras had fears that EBR was not going to be able to carry out both integration jobs in time and for such a low cost, and for that reason, the oil company opted to break the contract in two in an effort to split the risks, even though it recognised it will end up paying more for the two floaters.
EBR is now expected to keep the P-74 in its pocket, while Technip-Techint will grab the P-76 having finished second in the individual competition with an offer of $899.1 million for the unit.
Engevix offered $956.9 million for the P-74 and $928.9 million for the P-76.
The Andrade Gutierrez-GDK alliance bid $983.4 million for each FPSO, the Quip group proposed $988 million for the P-74 and $991 million for the P-76, while Jurong finished in last place with individual proposals of $1.63 billion.
One source said Brazilian engineering companies Andrade Gutierrez and GDK will file an appeal to try to prevent Technip and Techint from getting the P-76, arguing they were runner-up if the joint bid is taken into account.
Andrade Gutierrez-GDK offered $1.69 billion to carry out the integration of both FPSOs, which would mean individual bids of around $850 million, slightly less than proposed by Technip-Techint.
However, GDK recently asked for bankruptcy protection in a court in Bahia state in an attempt to reorganise its finances, which according to a source, could weaken any plea to invalidate the Technip-Techint bid.
Technip and Techint are proposing the P-76 integration work should take place at the Paranagua yard, in southern Parana state.
The FPSOs will be deployed on unlicensed acreage in the Santos basin.
The P-74 will be installed in the giant Franco pre-salt area in 2016, while the P-76 will produce first oil from the Tupi North-East accumulation in 2017.
Each floater will have capacity of 150,000 barrels per day of oil and 7 million cubic metres per day of natural gas.