The partial sinking of two power generation modules on their way for integration with the Petrobras-owned P-71 floating production, storage and offloading vessel risks scuppering a mooted plan to start producing from the Lula West field by 2022.

The modules in question were being transported from the southern Brazilian state of Santa Catarina — where they were assembled by a joint venture between Brazilian companies DM Construtora and TKK Engenharia — and were on their way to the Jurong Aracruz integration yard in Espirito Santo, farther north.

The modules were aboard the Locar V barge and being towed by the TS Favorito tug vessel when the incident occurred at a location about 120 kilometres off the port of Itajai.

An initial report by agents representing the tug owner Tranship Transportes Intermodais stated that the barge and its cargo were partially sunk.

This information was verified by inspections by remotely operated vehicle (ROV), organised by oil company Petrobras, acting in co-operation with the Brazilian navy, federal environmental agency Ibama and with contractors Jurong, Locar Guindastes e Transportes and Tranship .

"(Petrobras) has set up a commission of investigation to identify the causes of the accident and is evaluating the alternatives of replacement of the modules for the P-71 platform," the company said.

"Preliminary analysis indicates that even if the modules are totally lost it will be possible to mitigate the impact of the accident on the conclusion of construction and assembly work of the unit.

"Petrobras is making every effort to ensure that there is no delay in the planned start-up date of the P-71 platform, nor any loss of revenue for the consortium," it added.

Some local reports suggested that replacement modules could be ordered in China, where the P-71 hull is still under construction at the CIMC Raffles shipyard.

The P-71 FPSO was originally intended to produce on the Sururu pre-salt oilfield, in the Santos basin, but was one of six highly-standardised Petrobras floaters affected by a major re-scheduling in 2015, when it became clear that Brazil’s local content programme had run into serious delays.

This mitigation effort saw much of the work transferred from Brazil to Asian shipyards and three of the six FPSO units are now in production.

Additionally, topsides integration work for the P-68 and the P-70 is now very close to completion, with first oil at the Berbigao and Atapu fields expected later this year.

Unlike the other five units, Petrobras has not yet allocated a production start-up date for the P-71 FPSO, and Lula West has emerged as a likely alternative location to Sururu.

Plans to switch the location of the P-71 were discussed after Petrobras and partners in the Lula field, including Galp Energia and Anglo-Dutch supermajor Shell, saw encouraging results from an extended well test at Lula West.

In contrast, similar tests on Sururu suggested challenges of reservoir tightness, Upstream was told.

Chinese yard CIMC Raffles is expected to deliver the floater hull in the second half of 2019 and Galp told investors in February that Lula West could start producing by 2022, although the Portuguese company did not state explicitly that this plan rested on deployment of the P-71.

No location or first oil date for the P-71 was included in Petrobras’ 2019-2023 business plan, so delay to this project may not necessarily affect the company’s medium target of increasing its oil and gas production at a rate of 5% per annum.

"Petrobras is mobilising all the resources it has at its disposal to mitigate the possible effects resulting from this accident and will inform the market if there are any significant impacts on its 2019-2023 Business and Management Plan," the company said.

As with others in the series, the P-71 FPSO will have capacity to process 150,000 barrels per day of oil. It will handle up to 6 million cubic metres per day of natural gas and be fitted with a spread-mooring system.

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Lula West plans hit after modules 'partially sunk'