Contractors dispute Petrobras ruling over PLSV tender results

A pair of offshore service providers is contesting the results of Brazilian oil giant Petrobras’ major tender for the contracting of flexible pipelaying support vessels to operate in the South American nation.

Last October, Petrobras received bids from Subsea 7, DOF Subsea and Sapura Navegacao in a tender that called for the charter of an unspecified number of PLSVs to enter operation by July 2023, or 180 days after signing of the contract.

According to documents obtained by Upstream, the Petrobras bidding committee only qualified the vessels proposed by Sapura, stating they “satisfied all the bidding rules”, but labelled the units offered by DOF and Subsea 7 as “under analysis”.

DOF was the sole bidder in Lot A, which called for the supply of Brazilian-flagged vessels with high-load capacity and designed to operate in ultra-deep waters.

The company, through its wholly owned subsidiary Norskan Offshore, proposed the Skandi Acu vessel at a dayrate of $366,746.

According to DOF, the reason given by Petrobras to place the Skandi Acu under analysis was due to the fact the vessel would not be available in the contractual window required by the oil giant.

DOF argued the Skandi Acu vessel could meet Petrobras’ requirements as per the tender rules that give companies more flexibility to manage its contracts.

Sapura came out top in Lot B, which featured the same vessel specifications as Lot A but for foreign-flagged units.

Sapura offered the Sapura Onix vessel for a dayrate of $273,829. It was followed by Subsea 7 with the Seven Cruzeiro vessel for $293,047. Sapura also offered the Sapura Jade vessel for $294,112, while DOF again proposed the Skandi Acu vessel for $344,384.

DOF and Subsea 7 have since filed separate appeals disputing Petrobras’ decision to qualify both Sapura vessels in Lot B.

DOF also said the Sapura Onix and Sapura Jade vessels should have fallen at the same hurdle as the Skandi Acu, as the two Sapura PLSVs have contracts with Petrobras expiring in October 2023 and March 2024, respectively.

Petrobras also requested smaller vessels to operate in relatively shallow waters in the other two lots of the tender, with Lot C being for local and Lot D for foreign-flagged units.

Sapura was the only participant in Lot C with the Sapura Esmeralda with a dayrate of $212,300. There was the same situation with Lot D, with Subsea 7 offering the Seven Cruzeiro for $293,047.

Subsea 7 used similar arguments as DOF in its own letter, saying the Sapura Esmeralda, which was qualified by Petrobras in the tender, is on hire with the Brazilian state-controlled oil company until August 2024.

Unfairness claim

However, Subsea 7 went further and claimed Petrobras allowed a contractual amendment in the Sapura Esmeralda charter.

Subsea 7 contended that such an amendment of terms was unfair to other companies because it would allow Sapura to terminate the existing Sapura Esmeralda contract without penalties, paving the way for the company to secure a new deal in any upcoming Petrobras tender.

In its 10-page appeal, Subsea 7 argued that by allowing the Sapura Esmeralda vessel to compete, Petrobras “violated the equality and competitiveness” in the tender.

The Petrobras bidding committee clarified that the Sapura Esmeralda contract has that particular cancellation option and therefore Subsea 7 cannot compare it to other charters.

Petrobras offered three-year charters in each lots of the tender. If Sapura is awarded all three contracts it would result in a combined value of more than $850 million.

Petrobras has a fleet of 16 PLSVs in Brazil — one with TechnipFMC, three with Subsea 7, and six each with Sapura and a pairing between TechnipFMC and DOF.