Wed, May 25 2011
By Brian Ellsworth
RIO DE JANEIRO (Reuters) - Concerns of mounting political interference at Brazil's state-run oil company Petrobras are spurring interest in a crop of start-ups seeking to tap the South American nation's sizable reserves.
Worried that state meddling will push Petrobras toward less profitable activities, investors are eyeing alternatives such as OGX Petroleo (OGXP3.SA: Quote, Profile, Research, Stock Buzz), which has made extensive shallow water discoveries, or start-ups HRT Participacoes (HRTP3.SA: Quote, Profile, Research, Stock Buzz) and QGEP (QGEP3.SA: Quote, Profile, Research, Stock Buzz) that are largely in the exploration phase.
Though they are dwarfed by Brazil's state-controlled behemoth, many investors say OGX and its smaller peers are more focused on profitability than Petrobras, have strong corporate governance standards and have no plans to enter refining and logistics -- activities that drag down shareholder returns.
"Petrobras continues to be a company that is highly influenced by government decisions," said Danny Rappaport, who oversees about $111 million in assets for Sao Paulo-based asset management firm InvestPort and is underweight on Petrobras.
Petrobras' American Depositary Receipts (PBR.N: Quote, Profile, Research, Stock Buzz) are down 31 percent since the start of 2010 when investors became nervous about a massive $70 billion share offering that boosted the government's stake in the company.
Brazil boasts good conditions for start-up oil companies including a stable regulatory environment and vast territory where little oil and gas exploration has taken place.
Petrobras is largely tied up with huge ultra-deep water discoveries in a region known as the subsalt. This has opened up space for new companies to explore other areas such as the Solimoes Basin in the Amazon where HRT is drilling and the Parnaiba basin where OGX has made major gas discoveries.
"In a country with 29 sedimentary basins apt for petroleum exploration, there are opportunities for small, medium and large scale oil companies," said Milton Franke, HRT's planning director.
The list of Brazilian independents is set to grow, with initial public offerings planned for British-French firm Perenco and local firm PetroReconcavo. Portugal's Galp (GALP.LS: Quote, Profile, Research, Stock Buzz) has said it plans sell shares in its Brazil unit.
NEW PLAYERS
Shares of OGX, controlled by Brazilian billionaire Eike Batista, have nearly tripled since the start of 2009, when it made a string of discoveries. The company has 10.8 billion barrels of potential oil resources.
Rappaport said his fund has replaced Petrobras shares for OGX in some portfolios -- even though OGX is not expected to begin oil output until later this year.
HRT, which expects production to start in August, last year raised $1.5 billion in a stock listing, attracting investors with oil concessions in Brazil and Namibia. JPMorgan Chase & Co. expects HRT to invest $2.2 billion by 2013.
Investment banks including Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz), Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) and Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) began coverage of HRT shortly after the company listed its shares in Sao Paulo.
QGEP, a division of the Queiroz Galvao construction group, has 12 oil prospects and four discoveries in Brazil, mostly in the Campos Basin. The company raised $900 million in an IPO in February.
But interest in the smaller firms is unlikely to significantly erode trading of Petrobras.
Combined trading of Petrobras' shares (PETR3.SA: Quote, Profile, Research, Stock Buzz)(PETR4.SA: Quote, Profile, Research, Stock Buzz) accounts for about 13 percent of average daily trading volumes in the Bovespa stock exchange. OGX makes up less than 5 percent of trading.
And the share prices of Brazilian independent oil companies are highly dependent on new discoveries, meaning they are likely to be more volatile than Petrobras shares.
OGX shares sank as much as 17 percent in a single day in April after a report showed that the company's reserves grew less than expected. One month later, its shares rose 8 percent in a single session after it announced commercial viability of two gas fields.
Government intervention has been a key factor in explaining the flagging performance of Petrobras shares.
Brazil's policy of keeping fuel prices fixed even as oil prices rise -- a key part of the government's fight against inflation -- will likely continue hampering margins.
"Before you just had one choice, now you've got companies that are alternatives investments for those that want to diversify the risk of Petrobras and stay in the same sector," said Lucas Brendler, an analyst with Geracao Futuro.
(Additional reporting and editing by Guillermo Parra-Bernal; Dave Zimmerman)
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2011-05-26
ABB is strengthening its marine presence in Brazil
ABB, the leading power and automation technology group, is planning to strengthen its marine business presence in Brazil, in order to serve the growing market in Latin America more effectively.
Latin America has quickly become a key strategic area for ABB’s marine business. Future plans, which include the establishment of a new Azipod C factory, marine service center and specialized Azipod service center, will help ABB to serve Brazil’s fast-growing shipbuilding industry and to fulfill the requirement for local content.
“ABB’s innovative solutions and quality products have won us a leading position in high value added vessel segments, such as drillships, semi-submersible rigs, offshore supply vessels and shuttle tankers”, said Heikki Soljama, head of ABB’s Marine and Cranes Business Unit.“Our portfolio fits well into Brazil’s shipbuilding plans and development, and our investments show ABB’s commitment and confidence in the Brazilian market, and we believe this will gain us a preferred position to supply thrusters for 28 drilling units for Petrobras”.
Several locations have been evaluated for setting up the new Azipod factory, including Pernambuco, Santos, and Rio De Janeiro, although the final decision has yet to be taken. The planned factory will have the annual capacity of over 30 Azipod units. The actual construction schedule will enable timely thruster delivery to Petrobras drilling units from Brazil.
A service center is also planned to be opened by 2014 in Brazil. It will have dedicated and specialized Azipod service personnel, a dedicated workshop and tooling to assist in overhauls and refurbishment. The service center will also provide spare parts for the local market.
Latin America has quickly become a key strategic area for ABB’s marine business. Future plans, which include the establishment of a new Azipod C factory, marine service center and specialized Azipod service center, will help ABB to serve Brazil’s fast-growing shipbuilding industry and to fulfill the requirement for local content.
“ABB’s innovative solutions and quality products have won us a leading position in high value added vessel segments, such as drillships, semi-submersible rigs, offshore supply vessels and shuttle tankers”, said Heikki Soljama, head of ABB’s Marine and Cranes Business Unit.“Our portfolio fits well into Brazil’s shipbuilding plans and development, and our investments show ABB’s commitment and confidence in the Brazilian market, and we believe this will gain us a preferred position to supply thrusters for 28 drilling units for Petrobras”.
Several locations have been evaluated for setting up the new Azipod factory, including Pernambuco, Santos, and Rio De Janeiro, although the final decision has yet to be taken. The planned factory will have the annual capacity of over 30 Azipod units. The actual construction schedule will enable timely thruster delivery to Petrobras drilling units from Brazil.
A service center is also planned to be opened by 2014 in Brazil. It will have dedicated and specialized Azipod service personnel, a dedicated workshop and tooling to assist in overhauls and refurbishment. The service center will also provide spare parts for the local market.
BMT Successfully Navigates Through Difficult Economic Conditions
Date: 25/05/2011 10:37
BMT Group, the international design, engineering and risk management consultancy, announced today that it has achieved strong financial results, despite a difficult year for the global economy and the maritime industry in particular. A turnover of £142m provided the group with an underlying operating profit of £11m in the year to 30 September 2010, £5.8m of which has been distributed to the staff through the company’s profit share schemes.
Comprising 23 subsidiary companies, the BMT group has successfully focused on its core maritime offering in the organisation’s three sectors of defence, energy & environment and transport. Highlights included: the development of a new and innovative Fast Landing Craft design which met the demanding requirements set out by the UK’s Ministry of Defence; successful completion of the first sustainability strategy and management framework assessment for Guangzhou Development Industry Holding Co. Ltd, a major power company in the Pearl River Delta region of China; and partnerships with a diverse range of customers including the United States Coast Guard to provide Human Factors Engineering studies to address issues in the design and operation of equipment within demanding environments.
BMT has also opened new offices in India and Brazil to better support and grow the organisation’s core businesses located in these regions and acquired the Western Australia based port and harbour engineering specialists, JFA Consultants, to further enhance its offering in the Asia-Pacific region.
Peter French, Chief Executive of BMT Group Ltd said: “The continued focus on our core business combined with the commitment and ability of our people to respond to our customers' challenges, have allowed us to weather the difficult economic conditions. That we have held our own in such a tough climate is a testament to our strength and ability to provide valued solutions, at whatever stage in the economic cycle.”
Last year marked the 25th anniversary of BMT and with it came the implementation of its sustainability strategy which is already seeing positive results within the group. It also saw the launch of BMT's philanthropic initiative, BMT Giveback, the first project of which is now underway in India.
BMT Group, the international design, engineering and risk management consultancy, announced today that it has achieved strong financial results, despite a difficult year for the global economy and the maritime industry in particular. A turnover of £142m provided the group with an underlying operating profit of £11m in the year to 30 September 2010, £5.8m of which has been distributed to the staff through the company’s profit share schemes.
Comprising 23 subsidiary companies, the BMT group has successfully focused on its core maritime offering in the organisation’s three sectors of defence, energy & environment and transport. Highlights included: the development of a new and innovative Fast Landing Craft design which met the demanding requirements set out by the UK’s Ministry of Defence; successful completion of the first sustainability strategy and management framework assessment for Guangzhou Development Industry Holding Co. Ltd, a major power company in the Pearl River Delta region of China; and partnerships with a diverse range of customers including the United States Coast Guard to provide Human Factors Engineering studies to address issues in the design and operation of equipment within demanding environments.
BMT has also opened new offices in India and Brazil to better support and grow the organisation’s core businesses located in these regions and acquired the Western Australia based port and harbour engineering specialists, JFA Consultants, to further enhance its offering in the Asia-Pacific region.
Peter French, Chief Executive of BMT Group Ltd said: “The continued focus on our core business combined with the commitment and ability of our people to respond to our customers' challenges, have allowed us to weather the difficult economic conditions. That we have held our own in such a tough climate is a testament to our strength and ability to provide valued solutions, at whatever stage in the economic cycle.”
Last year marked the 25th anniversary of BMT and with it came the implementation of its sustainability strategy which is already seeing positive results within the group. It also saw the launch of BMT's philanthropic initiative, BMT Giveback, the first project of which is now underway in India.
2011-05-22
Petrobras to tap vast offshore reserves with "floating city" rigs
Brazilian state-controlled energy giant Petrobras, a global technology leader in the area of deepwater drilling, plans to develop reserves located far offshore in the Atlantic Ocean by deploying dozens of oil rigs that are veritable floating cities.
Following the discovery of massive, ultra-deep deposits in recent years that could lead to a drastic increase in proven reserves and transform Brazil into a major oil exporter, the company plans to put dozens of new giant oil platforms into service in the coming years.
"Each rig is an autonomous floating city with all the services, including electricity and water, and I serve in the role of mayor of one of them," Francisco Castro, manager of the P-18 platform, said during a visit by Efe to this soccer-stadium-sized production facility far out at sea.
Petrobras has a fleet of 86 fixed and 46 floating rigs that are a workplace for nearly 45,000 people, who enjoy 21 days of rest for every 14 days on board.
A total of "180 people live on my 'city.' They're replaced every 14 days and work on one of two 12-hour shifts," the manager of the P-18 said.
That platform, the world's first semi-submersible with a capacity to produce 100,000 barrels of oil and 2 million cubic meters (70.5 million cubic feet) of gas per day, began operating in 1994 and today extracts 34,000 bpd from the Campos Basin.
The floating city, anchored 117 kilometers (70 miles) off the coast of the southeastern state of Rio de Janeiro, weighs 18,347 tons, is 101 meters (110 yards) long by 88 meters (95 yards) wide and operates in a region where the water depth is 910 meters (2,980 feet).
Besides its productive infrastructure, which includes links to 14 production wells, two oil pipelines, a gas pipeline and eight anchors, the giant metal platform's four levels feature 43 cabins with 130 beds and a restaurant with a 50-person seating capacity.
The 17-year-old P-18 also is equipped with a heliport, auditorium, three TV rooms, two game rooms, an Internet cafe, a video-conferencing room, a gym and a library, as well as the different control stations.
"Despite being 100 kilometers (60 miles) offshore, we have everything we need, even a bakery and a laundry mat," Castro said.
The rig can operate autonomously because it has two electrical generators fed by the gas it extracts; a potable water-producing plant capable of supplying a 736-cubic-meter (194,440 gallon) tank and fiber-optic networks that provide telephone, Internet and TV links to the mainland.
"We don't produce the food we consume by ourselves, as that arrives by boat from the mainland once a month," the "mayor" of the floating city said, adding that Petrobras regulations prohibit fishing in drilling areas.
Discoveries of offshore ultra-deep deposits in recent years in the so-called "pre-salt" region have generated a great deal of optimism in Brazil and could drastically increase the country's current proven reserves of oil and natural gas, which totaled approximately 16 billion barrels of oil equivalent at the end of 2010.
Located in a roughly 160,000-sq.-kilometer (62,000-sq.-mile) offshore area, the pre-salt fields are estimated to contain roughly 80 billion boe and could potentially transform the South American nation into a major crude exporter.
But accessing them will be very costly and pose an enormous technical challenge because they are located at depths of up to 7,000 meters (22,950 feet) under a thick layer of salt. Drastic changes in temperature as the oil is brought to the surface also add to the technical complexity of developing those fields.
Under recent legislation, Petrobras is the operator of all projects and also can be awarded exploration contracts without a competitive bidding process.
Petrobras plans to invest $224 billion over the next five years to develop the pre-salt area and boost daily oil production from a current level of 2.4 million bpd to 4 million bpd in 2020.
Following the discovery of massive, ultra-deep deposits in recent years that could lead to a drastic increase in proven reserves and transform Brazil into a major oil exporter, the company plans to put dozens of new giant oil platforms into service in the coming years.
"Each rig is an autonomous floating city with all the services, including electricity and water, and I serve in the role of mayor of one of them," Francisco Castro, manager of the P-18 platform, said during a visit by Efe to this soccer-stadium-sized production facility far out at sea.
Petrobras has a fleet of 86 fixed and 46 floating rigs that are a workplace for nearly 45,000 people, who enjoy 21 days of rest for every 14 days on board.
A total of "180 people live on my 'city.' They're replaced every 14 days and work on one of two 12-hour shifts," the manager of the P-18 said.
That platform, the world's first semi-submersible with a capacity to produce 100,000 barrels of oil and 2 million cubic meters (70.5 million cubic feet) of gas per day, began operating in 1994 and today extracts 34,000 bpd from the Campos Basin.
The floating city, anchored 117 kilometers (70 miles) off the coast of the southeastern state of Rio de Janeiro, weighs 18,347 tons, is 101 meters (110 yards) long by 88 meters (95 yards) wide and operates in a region where the water depth is 910 meters (2,980 feet).
Besides its productive infrastructure, which includes links to 14 production wells, two oil pipelines, a gas pipeline and eight anchors, the giant metal platform's four levels feature 43 cabins with 130 beds and a restaurant with a 50-person seating capacity.
The 17-year-old P-18 also is equipped with a heliport, auditorium, three TV rooms, two game rooms, an Internet cafe, a video-conferencing room, a gym and a library, as well as the different control stations.
"Despite being 100 kilometers (60 miles) offshore, we have everything we need, even a bakery and a laundry mat," Castro said.
The rig can operate autonomously because it has two electrical generators fed by the gas it extracts; a potable water-producing plant capable of supplying a 736-cubic-meter (194,440 gallon) tank and fiber-optic networks that provide telephone, Internet and TV links to the mainland.
"We don't produce the food we consume by ourselves, as that arrives by boat from the mainland once a month," the "mayor" of the floating city said, adding that Petrobras regulations prohibit fishing in drilling areas.
Discoveries of offshore ultra-deep deposits in recent years in the so-called "pre-salt" region have generated a great deal of optimism in Brazil and could drastically increase the country's current proven reserves of oil and natural gas, which totaled approximately 16 billion barrels of oil equivalent at the end of 2010.
Located in a roughly 160,000-sq.-kilometer (62,000-sq.-mile) offshore area, the pre-salt fields are estimated to contain roughly 80 billion boe and could potentially transform the South American nation into a major crude exporter.
But accessing them will be very costly and pose an enormous technical challenge because they are located at depths of up to 7,000 meters (22,950 feet) under a thick layer of salt. Drastic changes in temperature as the oil is brought to the surface also add to the technical complexity of developing those fields.
Under recent legislation, Petrobras is the operator of all projects and also can be awarded exploration contracts without a competitive bidding process.
Petrobras plans to invest $224 billion over the next five years to develop the pre-salt area and boost daily oil production from a current level of 2.4 million bpd to 4 million bpd in 2020.
Brazil's CSN buys assets from Alfonso Gallardo
RIO DE JANEIRO (MarketWatch) -- Brazilian steelmaker Companhia Siderurgica Nacional SA (SID, CSNA3.BR), or CSN, said it agreed to acquire cement producer Cementos Balboa SA and four long steel producers in Spain and Germany from Spain's Grupo Alfonso Gallardo SLU for EUR543 million.
CSN and Alfonso Gallardo first announced they were in talks on the acquisition in December.
CSN will also take on debts worth about EUR403 million as part of the transaction, CSN said in a statement posted on its website.
The acquisition forms part of CSN's strategy to increase its cement and long products business, at the same time enhancing its international presence, CSN said in the statement.
The company recently moved into cement production in Brazil, where it will start up a long products plant in Volta Redonda, Rio de Janeiro state in the final quarter of 2012, CSN directors said on a conference call earlier this month.
CSN is one of Brazil's leading producers of flat steel, which is used in construction, home appliances and carmaking. It's moving into long products, which are more widely used in construction, due to the potential for market growth, the CSN directors said. The cement market is closely linked to the long products market, they said.
Cementos Balboa, located in Extremadura, has production capacity for 1.4 million metric tons a year of cement and 1.1 million tons a year of clinker, a base material for portland cement, CSN said. Balboa also has its own limestone and slate mines near the plant site, CSN said.
Corrugados Azpeitia SL and Corrugados Lasao SLU, two of the four steel plants to be acquired, are both located in Spain's Basque country.
Azpeitia has the capacity to produce 1.1 million tons a year of rebars, the steel bars used in reinforced concrete, while Lasao can produce 200,000 tons a year of soldered products for construction, CSN said.
The Alfonso Gallardo assets to be acquired in Germany are long products producer Stahlwerk Thuringen GmbH, which has capacity to produce 1.1 million tons a year of steel profiles in Unterwellenborn, and Gallardo Sections, a steel products distributor, CSN said.
The acquisitions are subject to approval by anti-trust authorities, CSN said
CSN and Alfonso Gallardo first announced they were in talks on the acquisition in December.
CSN will also take on debts worth about EUR403 million as part of the transaction, CSN said in a statement posted on its website.
The acquisition forms part of CSN's strategy to increase its cement and long products business, at the same time enhancing its international presence, CSN said in the statement.
The company recently moved into cement production in Brazil, where it will start up a long products plant in Volta Redonda, Rio de Janeiro state in the final quarter of 2012, CSN directors said on a conference call earlier this month.
CSN is one of Brazil's leading producers of flat steel, which is used in construction, home appliances and carmaking. It's moving into long products, which are more widely used in construction, due to the potential for market growth, the CSN directors said. The cement market is closely linked to the long products market, they said.
Cementos Balboa, located in Extremadura, has production capacity for 1.4 million metric tons a year of cement and 1.1 million tons a year of clinker, a base material for portland cement, CSN said. Balboa also has its own limestone and slate mines near the plant site, CSN said.
Corrugados Azpeitia SL and Corrugados Lasao SLU, two of the four steel plants to be acquired, are both located in Spain's Basque country.
Azpeitia has the capacity to produce 1.1 million tons a year of rebars, the steel bars used in reinforced concrete, while Lasao can produce 200,000 tons a year of soldered products for construction, CSN said.
The Alfonso Gallardo assets to be acquired in Germany are long products producer Stahlwerk Thuringen GmbH, which has capacity to produce 1.1 million tons a year of steel profiles in Unterwellenborn, and Gallardo Sections, a steel products distributor, CSN said.
The acquisitions are subject to approval by anti-trust authorities, CSN said
2011-05-19
Company formed to own Brazilian drillships
A newly formed company, Sete Brasil S.A. (Sete BR), São Paulo, Brazil, will own and manage seven offshore drillships that will be built at Brazil’s Estaleiro Atlântico Sul (EAS) shipyard, according to an announcement by oil giant Petrobras.
Petrobras will own less than a 10% share in Sete Brasil. The remainder of the company will be owned by banks and pension funds.
During the event, Petrobras' CEO Jose Sergio Gabrielli de Azevedo emphasized the "great challenges and opportunities this new company will face, capable of transforming the oil and gas industry in Brazil. This is a company with enormous potential, not only because of demand from Petrobras, but also from the entire industry."
EAS will build the drillships—the first ever built in Brazil—under a contract awarded to the shipyard this past February. The value of the contract to build the seven drillships is $4.6 billion, about $662 million per ship. The drillships will be deployed in 2015 for Petrobras' long-term drilling program for pre-salt wells.
Partners in EAS include the Brazilian groups Camargo Corrêa, Queiroz Galvão, and PJMR, along with Korea’s Samsung Heavy Industries.
Besides Azevedo, others on hand at the announcement included Petrobras CFO Almir Barbassa, Sete CEO João Carlos Ferraz, and representatives from the Santander, Bradesco, BTG Pactual, and Caixa Econômica Federal banks, as well as Previ, Petros, Funcef, Valia, and Lakeshore Financial Partners Participações.
Capital for Sete BR will be provided by the partners, and long-term funding from the Brazilian National Development Bank (BNDES), which will finance the Brazilian part of the goods and services required to build each drillship. Funding will also be provided by export credit agencies in countries producing the imports required, as well as the commercial banks.
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Petrobras will own less than a 10% share in Sete Brasil. The remainder of the company will be owned by banks and pension funds.
During the event, Petrobras' CEO Jose Sergio Gabrielli de Azevedo emphasized the "great challenges and opportunities this new company will face, capable of transforming the oil and gas industry in Brazil. This is a company with enormous potential, not only because of demand from Petrobras, but also from the entire industry."
EAS will build the drillships—the first ever built in Brazil—under a contract awarded to the shipyard this past February. The value of the contract to build the seven drillships is $4.6 billion, about $662 million per ship. The drillships will be deployed in 2015 for Petrobras' long-term drilling program for pre-salt wells.
Partners in EAS include the Brazilian groups Camargo Corrêa, Queiroz Galvão, and PJMR, along with Korea’s Samsung Heavy Industries.
Besides Azevedo, others on hand at the announcement included Petrobras CFO Almir Barbassa, Sete CEO João Carlos Ferraz, and representatives from the Santander, Bradesco, BTG Pactual, and Caixa Econômica Federal banks, as well as Previ, Petros, Funcef, Valia, and Lakeshore Financial Partners Participações.
Capital for Sete BR will be provided by the partners, and long-term funding from the Brazilian National Development Bank (BNDES), which will finance the Brazilian part of the goods and services required to build each drillship. Funding will also be provided by export credit agencies in countries producing the imports required, as well as the commercial banks.
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OGX declares two Parnaiba fields commercial
HOUSTON, May 17 -- OGX SA, Rio de Janeiro, has declared commercial the California and Fazenda Sao Jose accumulations discovered on the PN-T-68 block in northeastern Brazil’s onshore Parnaiba basin.
The two fields are expected to reach output of 201 MMcfd of natural gas by 2013 to be preferentially provided to power plants to be built by MPX Energia SA, an EBX group company, in association with Petra Energia SA, both of whom are partners of OGX on the PN-T-68 block.
OGX said it has identified the presence of hydrocarbons in the 1-OGX-34-MA and 3-OGX-38-MA wells on the same block 260 km southwest of Sao Luis (OGJ Online, Sept. 2, 2010).
The OGX-34 well, on the Bom Jesus prospect, discovered 23 m of net gas pay in the Devonian Poti and Cabecas formations. The OGX-38 well, the first Fazenda Sao Jose appraisal well, encountered 43 m of net gas pay in Poti and is still drilling.
OGX, which obtained the Parnaiba concessions 20 months ago, said Gaviao Azul (California) and Gaviao Real (Fazenda Sao Jose) will be the company’s first gas fields. Brazil’s ANP is analyzing OGX’s development plans.
MPX has acquired the site to build a power plant on the PN-T-68 block and has obtained an installation license for 1,863 Mw. MPX has initiated the environmental licensing process for the development of an additional 1,859 Mw in the region.
OGX Maranhao Petroleo e Gas Ltda., an entity controlled by OGX SA 66.6% and MPX Energia SA 33.3%, is block operator with 70% interest, and Petra Energia SA owns 30%.
The two fields are expected to reach output of 201 MMcfd of natural gas by 2013 to be preferentially provided to power plants to be built by MPX Energia SA, an EBX group company, in association with Petra Energia SA, both of whom are partners of OGX on the PN-T-68 block.
OGX said it has identified the presence of hydrocarbons in the 1-OGX-34-MA and 3-OGX-38-MA wells on the same block 260 km southwest of Sao Luis (OGJ Online, Sept. 2, 2010).
The OGX-34 well, on the Bom Jesus prospect, discovered 23 m of net gas pay in the Devonian Poti and Cabecas formations. The OGX-38 well, the first Fazenda Sao Jose appraisal well, encountered 43 m of net gas pay in Poti and is still drilling.
OGX, which obtained the Parnaiba concessions 20 months ago, said Gaviao Azul (California) and Gaviao Real (Fazenda Sao Jose) will be the company’s first gas fields. Brazil’s ANP is analyzing OGX’s development plans.
MPX has acquired the site to build a power plant on the PN-T-68 block and has obtained an installation license for 1,863 Mw. MPX has initiated the environmental licensing process for the development of an additional 1,859 Mw in the region.
OGX Maranhao Petroleo e Gas Ltda., an entity controlled by OGX SA 66.6% and MPX Energia SA 33.3%, is block operator with 70% interest, and Petra Energia SA owns 30%.
2011-05-17
BP Gets Going In Brazil
BP recently announced that the Brazilian National Petroleum, Natural Gas and Biofuels Agency has approved its bid to purchase ten exploration and production blocks in Brazil from Devon Energy. [1] BP had declared its decision to buy the assets from Devon in March 2010, and had been waiting for the regulatory approvals from ANP since then. [2]
The third largest of the six oil & gas ‘supermajors’, BP competes with oil & gas heavy-weights including Exxon Mobil, Royal Dutch Shell, Chesapeake, Anadarko and Chevron.
The BP-Devon Deal
The $7-billion deal between BP and Devon was for the latter’s assets in Brazil, Azerbaijan and the U.S. deepwater Gulf of Mexico. The assets included exploration blocks in Brazil’s prolific Campos basin, where BP could capitalize on its deepwater mining expertise.
The deal was in-line with the interests of both companies, as BP continues to focus on leveraging the strength of its deepwater operations, while Devon Energy decided to divest its deepwater and international assets in November 2009 to focus on onshore exploration and production in the U.S. and Canada.
Impact of the Deal on BP
The transaction in Azerbaijan was completed in August 2010. [3] BP raised its interest in the Azeri-Chirag-Gunashli development in the Caspian Sea to 39.77% as a result of the deal. BP has been operating the ACG oil field since 1997.
However, the ANP put the deal in Brazil on hold – admittedly to see how BP contains the oil spill in the Gulf of Mexico – and finally cleared it now seeing BP’s response to the world’s largest accidental oil spill.
With the Brazilian deepwaters showing a lot of promise in terms of oil & gas reserves, BP’s exploration in the area is expected to primarily add to the company’s oil production capacity in the years to come.
The third largest of the six oil & gas ‘supermajors’, BP competes with oil & gas heavy-weights including Exxon Mobil, Royal Dutch Shell, Chesapeake, Anadarko and Chevron.
The BP-Devon Deal
The $7-billion deal between BP and Devon was for the latter’s assets in Brazil, Azerbaijan and the U.S. deepwater Gulf of Mexico. The assets included exploration blocks in Brazil’s prolific Campos basin, where BP could capitalize on its deepwater mining expertise.
The deal was in-line with the interests of both companies, as BP continues to focus on leveraging the strength of its deepwater operations, while Devon Energy decided to divest its deepwater and international assets in November 2009 to focus on onshore exploration and production in the U.S. and Canada.
Impact of the Deal on BP
The transaction in Azerbaijan was completed in August 2010. [3] BP raised its interest in the Azeri-Chirag-Gunashli development in the Caspian Sea to 39.77% as a result of the deal. BP has been operating the ACG oil field since 1997.
However, the ANP put the deal in Brazil on hold – admittedly to see how BP contains the oil spill in the Gulf of Mexico – and finally cleared it now seeing BP’s response to the world’s largest accidental oil spill.
With the Brazilian deepwaters showing a lot of promise in terms of oil & gas reserves, BP’s exploration in the area is expected to primarily add to the company’s oil production capacity in the years to come.
2011-05-14
Saipem has been awarded new offshore pipeline engineering and construction contracts in China and Brazil
Wed, 11 May 2011
Saipem has been awarded new E&C Offshore contracts worth in excess of $1 billion in China and Brazil. The offshore activities for both the contracts will be performed mainly by the newly-built and highly-specialized Saipem FDS 2 vessel, in different periods between 2012 and 2013.
In China, Husky Oil China Ltd awarded Saipem the contract for the Liwan 3-1 Field – Deepwater EPCI. The scope of work includes the engineering, procurement, construction and installation of two 22 inch diameter 79-kilometres-long pipelines, umbilicals, along with the transport and installation of a subsea production system linking the wellheads to a processing platform.
The Liwan 3-1 gas field, is located in the Block 29/26 in the South China Sea in 1500 metres water depth and approximately 300 kilometres south of Hong Kong. It represents the first offshore field developed in deep water in the South China Sea.
In Brazil, the Brazilian oil company Petrobras has awarded Saipem an EPIC contract for the Guara & Lula-Northeast gas export pipelines, in the Santos Basin, approximately 260 kilometres off the coasts of the Rio de Janeiro and São Paulo States, in water depths of between 2,100 and 2,200 metres.
The contract encompasses the transportation, installation and pre-commissioning of two export sealines, as well as the engineering, procurement and construction of related subsea equipment: the first line, 18 inch in diameter and 54-kilometres-long, will connect the Guara FPSO vessel (Floating Production Storage and Offloading) to a subsea gathering manifold in the Lula field; the second line, 18 inch in diameter and 22-kilometres-long, will connect the Lula-Northeast FPSO to the same manifold in the Lula field.
Saipem is organised into two Business Units: Engineering & Construction and Drilling, with a strong bias towards oil & gas related activities in remote areas and deepwater. Saipem is a leader in the provision of engineering, procurement, project management and construction services with distinctive capabilities in the design and execution of large-scale offshore and onshore projects, and technological competences such as gas monetisation and heavy oil exploitation.
In China, Husky Oil China Ltd awarded Saipem the contract for the Liwan 3-1 Field – Deepwater EPCI. The scope of work includes the engineering, procurement, construction and installation of two 22 inch diameter 79-kilometres-long pipelines, umbilicals, along with the transport and installation of a subsea production system linking the wellheads to a processing platform.
The Liwan 3-1 gas field, is located in the Block 29/26 in the South China Sea in 1500 metres water depth and approximately 300 kilometres south of Hong Kong. It represents the first offshore field developed in deep water in the South China Sea.
In Brazil, the Brazilian oil company Petrobras has awarded Saipem an EPIC contract for the Guara & Lula-Northeast gas export pipelines, in the Santos Basin, approximately 260 kilometres off the coasts of the Rio de Janeiro and São Paulo States, in water depths of between 2,100 and 2,200 metres.
The contract encompasses the transportation, installation and pre-commissioning of two export sealines, as well as the engineering, procurement and construction of related subsea equipment: the first line, 18 inch in diameter and 54-kilometres-long, will connect the Guara FPSO vessel (Floating Production Storage and Offloading) to a subsea gathering manifold in the Lula field; the second line, 18 inch in diameter and 22-kilometres-long, will connect the Lula-Northeast FPSO to the same manifold in the Lula field.
Saipem is organised into two Business Units: Engineering & Construction and Drilling, with a strong bias towards oil & gas related activities in remote areas and deepwater. Saipem is a leader in the provision of engineering, procurement, project management and construction services with distinctive capabilities in the design and execution of large-scale offshore and onshore projects, and technological competences such as gas monetisation and heavy oil exploitation.
Trelleborg acquires business enabling further expansion in offshore oil and gas in Brazil
Through its Trelleborg Engineered Systems business area, Trelleborg has signed an agreement to acquire a business in the offshore oil and gas industry in Brazil from a subsidiary of Veyance Technologies Inc. The business focuses on specially designed oil hoses for surface and deep-sea applications for the strongly growing offshore oil and gas extraction industry in Brazil.
“This represents a step in our quest to strengthen our presence in Brazil in the offshore oil/gas industry,” says Lennart Johansson, President of the Trelleborg Engineered Systems business area. “The acquired operation complements our current technology in oil hoses and is thus an excellent addition to our product portfolio, globally as well as in Brazil. Our customers are moving more and more of their production to Brazil and it is crucial to ensure that we have manufacturing close to their units.”
The plant is located in Santana de Parnaiba, close to São Paulo. Trelleborg will take over the lease on the facility, which is 15,000 m2, acquire the existing equipment and assume responsibility for the some 100 employees. The seller is Veyance Technologies do Brasil Produtos de Engenharia Ltda.
The acquisition is expected to be finalized in the first quarter of 2011, and will be followed by investments in supplementary production equipment. It is anticipated that production can commence gradually as of the second half of 2011. The purchase consideration is approximately SEK 40 M and Trelleborg will initially invest approximately SEK 25 M during 2011. A successive positive earnings effect is forecast from the second half of 2012.
2011-05-13
Siemens secures contract to supply power solutions for FPSO project in Brazil
Siemens Energy has secured several contracts for the supply of topside solutions including power generation , water injection and power distribution packages for a Brazilian Floating, Production, Storage and Offloading, or FPSO, project. .
Purchaser for the power generators and power distribution systems is Singapore-based Jurong Shipyard Pte Ltd. and Wasco through its subsidiary Gas Services International Pte Ltd for the water injection package. The FPSO is scheduled to start operation in early summer 2012 and will produce from the Tiro and Sidon fields located in the south Santos basin off the coast of Brazil. .
Jurong Shipyard has been contracted by the Norwegian company Teekay Petrojarl Production AS to carry out the necessary modifications to the FPSO Cidade de Itajai (previously FPSO ARCII). Teekay will operate the FPSO on a contract with Petrobras. .
Siemens' scope of supply for the vessel encompasses two SGT-400 power generation units, the sulfate removal unit (SRU) and an E-house. The E-house contains the medium- and low-voltage switchgear units, transformers, the variable-frequency drives and the associated facilities for power management in a purpose designed, ventilated container. It weighs approximately 420 tons, is 13 meters long, 13 meters wide and 15 meters high. .
The FPSO will also be equipped with water injection facilities in order to boost oil recovery from the reservoirs. Siemens will supply the key elements for this system in skid format, including the sulfate removal membrane, SRU feed pumps, chemical cleaning and reverse osmosis. The water injection system will be designed to handle 638 cubic meters per hour. The FPSO Cidade de Itajai will have a production capacity of 80,000 barrels/day of oil and a storage capacity of approximately 650,000 barrels. .
"By supplying topside solutions for FPSOs we are reducing interfaces and can support our customers to increase reliability in project execution and system operations," said Tom Blades, CEO of Siemens Energy Oil and Gas Division..
Purchaser for the power generators and power distribution systems is Singapore-based Jurong Shipyard Pte Ltd. and Wasco through its subsidiary Gas Services International Pte Ltd for the water injection package. The FPSO is scheduled to start operation in early summer 2012 and will produce from the Tiro and Sidon fields located in the south Santos basin off the coast of Brazil. .
Jurong Shipyard has been contracted by the Norwegian company Teekay Petrojarl Production AS to carry out the necessary modifications to the FPSO Cidade de Itajai (previously FPSO ARCII). Teekay will operate the FPSO on a contract with Petrobras. .
Siemens' scope of supply for the vessel encompasses two SGT-400 power generation units, the sulfate removal unit (SRU) and an E-house. The E-house contains the medium- and low-voltage switchgear units, transformers, the variable-frequency drives and the associated facilities for power management in a purpose designed, ventilated container. It weighs approximately 420 tons, is 13 meters long, 13 meters wide and 15 meters high. .
The FPSO will also be equipped with water injection facilities in order to boost oil recovery from the reservoirs. Siemens will supply the key elements for this system in skid format, including the sulfate removal membrane, SRU feed pumps, chemical cleaning and reverse osmosis. The water injection system will be designed to handle 638 cubic meters per hour. The FPSO Cidade de Itajai will have a production capacity of 80,000 barrels/day of oil and a storage capacity of approximately 650,000 barrels. .
"By supplying topside solutions for FPSOs we are reducing interfaces and can support our customers to increase reliability in project execution and system operations," said Tom Blades, CEO of Siemens Energy Oil and Gas Division..
2011-05-10
Taim Weser has been chosen by LLX
Taim Weser has been chosen by LLX, part of the EBX group, to design, manufacture, supply and implement transport systems and iron ore stockyard machinery for the new project of the Brazilian group, the port known as the “Superporto Sudeste”, a modern port terminal in the Sepetiba Bay, at Itaguaí, 80 km from Rio de Janeiro. TW’s order includes supplying a complete conveyor belt system and four combined stacker/reclaimer machines.
BP is to acquire majority of CNAA
BP is to acquire majority (83%) control of the Brazilian ethanol and sugar producer Companhia Nacional de Açúcar e Álcool (CNAA). The $680m deal will increase BP’s overall Brazilian production capacity to around 1.4bn litres of ethanol equivalent per year (9m barrels). BP will operate two ethanol mills, in Goiás and Minas Gerais states. A third CNAA mill is currently under development in Minas Gerais state.
2011-05-09
Growing Giants: Brazil’s Braskem Aims For Global Leadership
Braskem, Brazil’s largest chemical company, has been pumping up its international presence with the goal of becoming a global leader in sustainable chemicals by 2020, according to the company’s CEO, Carlos Fadigas, who rang the closing bell at the New York Stock Exchange today.
Braskem has been quietly expanding over the years, acquiring 12 companies, including U.S.-based Sunoco Chemicals last year, for $350 million in shares. Today it owns 31 facilities in Brazil and in the U.S. While its stock climbed over 98% over the last 12 months (Braskem is listed in the NYSE, Brazil’s BM&FBovespa and Madrid’s Latibex) the company pulled in revenues of $15.8 billion in 2010.
Thanks to its “solid balance sheet” (its net debt to EBITDA in 2010 was 2.56x) and investment grade rating by Moody’s, Fadigas told a group of reporters at the NYSE this morning that he sees more opportunities in the horizon for acquisitions in the United States, Mexico and Canada. “We believe there’s some consolidation that should happen over time in the United States,” said Fadigas.
The past couple of years have presented great opportunities for companies in emerging markets with an appetite for growth to find deals in developed markets. As Brazil’s Finance Minister Guido Mantega said during a summit yesterday, emerging markets are out of the 2008 financial crisis — developed markets are not (yet). (Read Mantega: Inflation Under Control In Brazil As QE2 Pressures Real)
Some Brazilian companies and private investors that have taken advantage of the deals available in developing markets include JBS, which has become the world’s largest meat producer in the process, and a group of Brazilian billionaire bankers (Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira) who bought Burger King last year.
Aside from a strong balance sheet, Fadigas said Braskem is reaping benefits in multiple fronts. Among them is a burgeoning middle class with an appetite for plastic. Braskem, which produces over 15 million tons of thermoplastic resins and other petrochemical products annually, says Brazil will need a new thermoplastic plan per year until 2020. It also expects its partnership with Brazil’s national oil and gas company, Petrobas (which holds a 47% stake in Braskem) to be advantageous, especially as gas supply from pre-salt exploration grows. A third benefit, according to Fadigas, are Brazil’s abundant raw materials. Thanks to the country’s sugarcane plantations, Braskem is able to produce “green” polyethylene from sugar cane-based ethanol.
Braskem has been quietly expanding over the years, acquiring 12 companies, including U.S.-based Sunoco Chemicals last year, for $350 million in shares. Today it owns 31 facilities in Brazil and in the U.S. While its stock climbed over 98% over the last 12 months (Braskem is listed in the NYSE, Brazil’s BM&FBovespa and Madrid’s Latibex) the company pulled in revenues of $15.8 billion in 2010.
Thanks to its “solid balance sheet” (its net debt to EBITDA in 2010 was 2.56x) and investment grade rating by Moody’s, Fadigas told a group of reporters at the NYSE this morning that he sees more opportunities in the horizon for acquisitions in the United States, Mexico and Canada. “We believe there’s some consolidation that should happen over time in the United States,” said Fadigas.
The past couple of years have presented great opportunities for companies in emerging markets with an appetite for growth to find deals in developed markets. As Brazil’s Finance Minister Guido Mantega said during a summit yesterday, emerging markets are out of the 2008 financial crisis — developed markets are not (yet). (Read Mantega: Inflation Under Control In Brazil As QE2 Pressures Real)
Some Brazilian companies and private investors that have taken advantage of the deals available in developing markets include JBS, which has become the world’s largest meat producer in the process, and a group of Brazilian billionaire bankers (Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira) who bought Burger King last year.
Aside from a strong balance sheet, Fadigas said Braskem is reaping benefits in multiple fronts. Among them is a burgeoning middle class with an appetite for plastic. Braskem, which produces over 15 million tons of thermoplastic resins and other petrochemical products annually, says Brazil will need a new thermoplastic plan per year until 2020. It also expects its partnership with Brazil’s national oil and gas company, Petrobas (which holds a 47% stake in Braskem) to be advantageous, especially as gas supply from pre-salt exploration grows. A third benefit, according to Fadigas, are Brazil’s abundant raw materials. Thanks to the country’s sugarcane plantations, Braskem is able to produce “green” polyethylene from sugar cane-based ethanol.
2011-05-05
Brazil's Congress Won't Approve Mines Laws This Year
RIO DE JANEIRO -(Dow Jones)- Brazil's Chamber of Deputies is unlikely to approve the country's proposed new mining code this year and new legislation that could boost mining royalties is still further off, a mining sector lawyer said late last week.
Discussions on proposals already made for the new mining law bill will be protracted due to the impractical nature of some proposals and the need for consistency, including in tax rules, for investors in the capital-intensive mining industry, said Carlos Vilhena, partner and head of mining practices at Pinheiro Neto Advogados, based in Brasilia.
Brazil's President Dilma Rousseff, as a former mines and energy minister, is likely to want to have greater personal involvement in elaboration of the new code, the legal specialist said during an mining sector congress organized by CRU Group in Rio de Janeiro.
The proposed new laws for the mining sector include fixed time periods for mining concessions, special rules for mining of so-called strategic minerals such as uranium and rare earths, and minimum investments in exploration. The minimum exploration investments requirement is "a retrograde step," according to Vilhena, as it tends to be very difficult to control, and police, the exact level of investments at the exploration stage, as progress depends on the degree of success in drilling work, he said.
"Nothing will happen (with the new mining bill) this year," Vilhena said. "The bill needs to go from the (mines and energy) ministry to the presidency and then on to congress. There could be a proposal to congress this year. However, the royalties issue is still a long time off."
The new legislation will be divided into three sections: the mining code establishing basic operational rules for the sector, rules for the sector's institutional framework and legislation on royalties, the lawyer said.
President Rousseff is unlikely to want any discrimination between Brazilian and foreign-owned companies investing in the Brazilian mining sector, nor will she seek to boost state control in the sector so as not to interfere with the sector's healthy investment levels, according to Vilhena. According to Brazilian Mining Institute Ibram, $62 billion is already committed to the sector from local and international investors in projects to be developed over the next four years.
Brazil is the world's biggest producer of niobium, producing 98% of global supplies, the second biggest in iron ore with 20% of the total produced, and the third biggest in bauxite, contributing 17%, according to sector figures.
Deciding on mining royalties levels in Brazil will meanwhile involve political negotiations between Brazilian states and municipalities, which receive most of the funds paid in royalties, Vilhena said.
"Brazil's mining royalties are low compared to other countries," Vilhena said. "But overall, considering other taxes, Brazil has a very high tax burden." A general tax reform in Brazil has been debated since the 1990s without any conclusion, he noted.
Edmo Chagas, analyst with BTG Pactual, said at the event that he believes Brazilian mine royalties will rise to 6%-8% from the current ceiling of 3%, affecting companies' earnings before interest, taxes, depreciation and amortization performance and forcing them to seek more efficiency, for instance in shipping practices, to maintain their competitiveness, he said. An integrated iron ore mining and steelmaking company would see its margins fall 5% if royalties were to increase to that level, he said.
Discussions on proposals already made for the new mining law bill will be protracted due to the impractical nature of some proposals and the need for consistency, including in tax rules, for investors in the capital-intensive mining industry, said Carlos Vilhena, partner and head of mining practices at Pinheiro Neto Advogados, based in Brasilia.
Brazil's President Dilma Rousseff, as a former mines and energy minister, is likely to want to have greater personal involvement in elaboration of the new code, the legal specialist said during an mining sector congress organized by CRU Group in Rio de Janeiro.
The proposed new laws for the mining sector include fixed time periods for mining concessions, special rules for mining of so-called strategic minerals such as uranium and rare earths, and minimum investments in exploration. The minimum exploration investments requirement is "a retrograde step," according to Vilhena, as it tends to be very difficult to control, and police, the exact level of investments at the exploration stage, as progress depends on the degree of success in drilling work, he said.
"Nothing will happen (with the new mining bill) this year," Vilhena said. "The bill needs to go from the (mines and energy) ministry to the presidency and then on to congress. There could be a proposal to congress this year. However, the royalties issue is still a long time off."
The new legislation will be divided into three sections: the mining code establishing basic operational rules for the sector, rules for the sector's institutional framework and legislation on royalties, the lawyer said.
President Rousseff is unlikely to want any discrimination between Brazilian and foreign-owned companies investing in the Brazilian mining sector, nor will she seek to boost state control in the sector so as not to interfere with the sector's healthy investment levels, according to Vilhena. According to Brazilian Mining Institute Ibram, $62 billion is already committed to the sector from local and international investors in projects to be developed over the next four years.
Brazil is the world's biggest producer of niobium, producing 98% of global supplies, the second biggest in iron ore with 20% of the total produced, and the third biggest in bauxite, contributing 17%, according to sector figures.
Deciding on mining royalties levels in Brazil will meanwhile involve political negotiations between Brazilian states and municipalities, which receive most of the funds paid in royalties, Vilhena said.
"Brazil's mining royalties are low compared to other countries," Vilhena said. "But overall, considering other taxes, Brazil has a very high tax burden." A general tax reform in Brazil has been debated since the 1990s without any conclusion, he noted.
Edmo Chagas, analyst with BTG Pactual, said at the event that he believes Brazilian mine royalties will rise to 6%-8% from the current ceiling of 3%, affecting companies' earnings before interest, taxes, depreciation and amortization performance and forcing them to seek more efficiency, for instance in shipping practices, to maintain their competitiveness, he said. An integrated iron ore mining and steelmaking company would see its margins fall 5% if royalties were to increase to that level, he said.
2011-05-04
Petrobras lets subsea system contract for Congro, Corvina fields
HOUSTON, May 4 -- Petroleo Brasileiro SA (Petrobras) let a $130 million to FMC Technologies Inc. for the supply of two subsea separation and boosting systems for Congro and Corvina fields, which lie off Brazil in the Campos basin.
In addition to a subsea gas-liquid separation and boosting system for each field, FMC will also supply two subsea manifolds for handling the production and gas lift injection for 10 wells. Other equipment includes two subsea boosting module stations, pipeline tie-in equipment and subsea control systems.
FMC said the control system incorporates an innovative subsea robotics technology, designed by Schilling Robotics, to operate the manifold and separation station valves. FMC will engineer and manufacture the equipment at its Rio de Janeiro facility.
FMC noted that the Congro and Corvina project is FMC’s fourth subsea processing installation in Brazil, following Phases I and II of Shell’s Parque das Conchas (BC-10) field, and the heavy oil separation and water reinjection system for Petrobras’s Marlim field.
The company added that this project will allow Petrobras to demobilize one existing production platform and replace it with the two subsea separation systems.
In addition to a subsea gas-liquid separation and boosting system for each field, FMC will also supply two subsea manifolds for handling the production and gas lift injection for 10 wells. Other equipment includes two subsea boosting module stations, pipeline tie-in equipment and subsea control systems.
FMC said the control system incorporates an innovative subsea robotics technology, designed by Schilling Robotics, to operate the manifold and separation station valves. FMC will engineer and manufacture the equipment at its Rio de Janeiro facility.
FMC noted that the Congro and Corvina project is FMC’s fourth subsea processing installation in Brazil, following Phases I and II of Shell’s Parque das Conchas (BC-10) field, and the heavy oil separation and water reinjection system for Petrobras’s Marlim field.
The company added that this project will allow Petrobras to demobilize one existing production platform and replace it with the two subsea separation systems.
Technip May Spend $1.5 Billion Cash Pile on Dividend Brazil
Technip SA (TEC), Europe’s second-largest oilfield-services provider, may spend “hard-earned” cash on raising dividends and investment in Brazil, and will consider acquisitions, the company’s chief financial officer said.
“The amount of cash that we can truly call our own has grown” to about 1 billion euros ($1.5 billion), Julian Waldron said in an interview in Paris last week. “We’ve worked very hard to get the company’s balance sheet to where it is today.”
Technip, which makes equipment for oil and gas exploration and builds liquefied natural gas installations, is seeking to broaden the range of its services to producers including Exxon Mobil Corp. (XOM), Royal Dutch Shell Plc, Total SA (FP) and Saudi Aramco. Increasing investment and shareholder payouts are higher priorities than carrying out any large-scale acquisition, Waldron said.
“If there are opportunities we don’t rule them out,” the CFO said. “If one comes up at least we know we have the balance sheet. I think we would have shareholders’ support to do something.”
Technip built up its cash reserves after working through a series of orders that soured when oil prices jumped, pushing up labor and construction costs and leading to 2008 provisions on Qatar and Asia-Pacific contracts. Chief Executive Officer Thierry Pilenko has since pledged to shield the company from exposure to the building industry.
Share Performance
Investors rewarded Technip’s improved prospects, pushing the share price up 7.2 percent this year. The company joined the benchmark CAC 40 index in 2009 and was the best performer that year when the stock price more than doubled. It raised the dividend for 2010 by 10 cents to 1.45 euros a share.
Technip, whose competitors include Saipem SpA and General Electric Co.’s Wellstream Holdings, bought offshore wind energy cable installer Subocean Group earlier this year and two Brazilian-flagged pipelay vessels last year. These “small” purchases successfully tested Technip’s ability to react “very fast” with cash offers for assets, said Waldron, who was educated at Cambridge in Britain and came to Technip from Thomson SA, the French electronics company now called Technicolor.
Last month, the company reported an 8.8 percent increase in first-quarter profit. The market for flexible pipelines made by Technip for offshore oil exploration and production is growing at a pace that is “probably beyond our expectations,” Pilenko said on a conference call with analysts at the time. “Very large” contracts for the equipment may be awarded in Brazil.
Brazilian Prospects
Technip will raise investment in the next few years in Brazil, where planned expansion of energy output from offshore discoveries offers the most growth “visibility” compared with other regions like the Gulf of Mexico, Ghana, India and the Arctic, Waldron said.
In Brazil, the French company is expanding a manufacturing plant for flexible pipes, betting that last year’s order from Petroleo Brasileiro SA (PETR4) to supply a pilot system for the deep offshore Tupi field will grow.
“Under a really aggressive case, the potential is for twice worldwide installed capacity just for Brazil alone,” Waldron said of the technology. “Under a more reasonable case you are still at a multiple of what is available in Brazil today, substantially above anything that could be produced out of today’s world capacity.”
The oil services company also plans to bid for a contract for two 550-ton flexible pipelay vessels for Brazilian offshore fields and is expanding installations at Angra Porto.
“The amount of cash that we can truly call our own has grown” to about 1 billion euros ($1.5 billion), Julian Waldron said in an interview in Paris last week. “We’ve worked very hard to get the company’s balance sheet to where it is today.”
Technip, which makes equipment for oil and gas exploration and builds liquefied natural gas installations, is seeking to broaden the range of its services to producers including Exxon Mobil Corp. (XOM), Royal Dutch Shell Plc, Total SA (FP) and Saudi Aramco. Increasing investment and shareholder payouts are higher priorities than carrying out any large-scale acquisition, Waldron said.
“If there are opportunities we don’t rule them out,” the CFO said. “If one comes up at least we know we have the balance sheet. I think we would have shareholders’ support to do something.”
Technip built up its cash reserves after working through a series of orders that soured when oil prices jumped, pushing up labor and construction costs and leading to 2008 provisions on Qatar and Asia-Pacific contracts. Chief Executive Officer Thierry Pilenko has since pledged to shield the company from exposure to the building industry.
Share Performance
Investors rewarded Technip’s improved prospects, pushing the share price up 7.2 percent this year. The company joined the benchmark CAC 40 index in 2009 and was the best performer that year when the stock price more than doubled. It raised the dividend for 2010 by 10 cents to 1.45 euros a share.
Technip, whose competitors include Saipem SpA and General Electric Co.’s Wellstream Holdings, bought offshore wind energy cable installer Subocean Group earlier this year and two Brazilian-flagged pipelay vessels last year. These “small” purchases successfully tested Technip’s ability to react “very fast” with cash offers for assets, said Waldron, who was educated at Cambridge in Britain and came to Technip from Thomson SA, the French electronics company now called Technicolor.
Last month, the company reported an 8.8 percent increase in first-quarter profit. The market for flexible pipelines made by Technip for offshore oil exploration and production is growing at a pace that is “probably beyond our expectations,” Pilenko said on a conference call with analysts at the time. “Very large” contracts for the equipment may be awarded in Brazil.
Brazilian Prospects
Technip will raise investment in the next few years in Brazil, where planned expansion of energy output from offshore discoveries offers the most growth “visibility” compared with other regions like the Gulf of Mexico, Ghana, India and the Arctic, Waldron said.
In Brazil, the French company is expanding a manufacturing plant for flexible pipes, betting that last year’s order from Petroleo Brasileiro SA (PETR4) to supply a pilot system for the deep offshore Tupi field will grow.
“Under a really aggressive case, the potential is for twice worldwide installed capacity just for Brazil alone,” Waldron said of the technology. “Under a more reasonable case you are still at a multiple of what is available in Brazil today, substantially above anything that could be produced out of today’s world capacity.”
The oil services company also plans to bid for a contract for two 550-ton flexible pipelay vessels for Brazilian offshore fields and is expanding installations at Angra Porto.
2011-05-03
Country manager appointed for Harris Pye Ltda Macae Rio de Janeiro
Tuesday, 03 May 2011
Alex McAndrew (52) has been appointed Country Manager for Harris Pye Brasil Ltda, based in Macaé in Rio de Janeiro state, Brazil, with responsibility for all operations from budget through to client satisfaction at the rapidly expanding offshore and marine engineering facility.
Opened in 2001 to serve Harris Pye Group clients involved with exploration and production in Brazil’s deepwater areas, the facility has moved four times during the decade due to expansion, has recently taken on an additional fabrication facility and is actively look for new premises to ensure it continues to meet, and surpass, client expectations.
Harris Pye Brasil is currently undertaken a three month programme of alongside repairs and upgrades to Transocean’s rig Deep Water Discovery at Angra dos Reis; and the manufacture, installation and commissioning of two steam boiler houses for Brasdrill/Diamond Offshore Drilling; and had a riding crew onboard Navis Drilling’s rig Blacford Dolphin during its tow from Cape Town to Brasil in August and September 2001. It also regularly provides repair teams and equipment for clients including Navis Drilling, Modec, Saipem, SBM, Teekay Petrojarl and Transocean.
The Harris Pye Group, headquartered in Barry, South Wales and with 17 companies, workshops and facilities in 14 countries around the world, recorded its best-ever order intake in 2010, breaking through the £100m mark worldwide; added to which, Q1 of 2011 has seen every station - including Harris Pye Brasil - report their busiest first quarter ever.
Alex McAndrew has a long association with the offshore oil and gas industry, and will be on the Harris Pye stand at OTC 2011 (Stand 6119) to renew acquaintances built up over the past 30+ years.
Most recently he worked with SLP Engineering and then C&D Group on the design, construction and then outfitting of a 180-person living quarters for the redevelopment of the BP Valhall field. Prior to that he worked for Allseas, Harris Pye Marine, Buckie Shipyard, BUE Caspian, Dubai Drydocks, Tees Dockyard, Rosyth Royal Dockyard (Babcock), Cleveland Bridge and Engineering and Scott Lithgow.
“I am delighted to have returned to Harris Pye and to be working in such an exciting offshore region,” says Alex McAndrew. “Recent discoveries of large offshore oil deposits are set to transform Brazil into one of the largest oil producers in the world; and, as the Harris Pye Group knows from its work around the world, exploration and production in ever-deeper waters holds its own challenges, needing innovative solutions and the fast turnaround on which we here at Harris Pye Brasil – backed by the Group’s global expertise - thrive.
“Brazil's oil production has risen steadily in recent years, with the country's oil production in 2010 about 150,000 bbl/d (6 percent) higher than in 2009 – we will be expanding to keep pace with what is going on in the waters off Brazil, and look forward to bringing our expertise to many challenging projects in the coming months and years.”
Alex McAndrew (52) has been appointed Country Manager for Harris Pye Brasil Ltda, based in Macaé in Rio de Janeiro state, Brazil, with responsibility for all operations from budget through to client satisfaction at the rapidly expanding offshore and marine engineering facility.
Opened in 2001 to serve Harris Pye Group clients involved with exploration and production in Brazil’s deepwater areas, the facility has moved four times during the decade due to expansion, has recently taken on an additional fabrication facility and is actively look for new premises to ensure it continues to meet, and surpass, client expectations.
Harris Pye Brasil is currently undertaken a three month programme of alongside repairs and upgrades to Transocean’s rig Deep Water Discovery at Angra dos Reis; and the manufacture, installation and commissioning of two steam boiler houses for Brasdrill/Diamond Offshore Drilling; and had a riding crew onboard Navis Drilling’s rig Blacford Dolphin during its tow from Cape Town to Brasil in August and September 2001. It also regularly provides repair teams and equipment for clients including Navis Drilling, Modec, Saipem, SBM, Teekay Petrojarl and Transocean.
The Harris Pye Group, headquartered in Barry, South Wales and with 17 companies, workshops and facilities in 14 countries around the world, recorded its best-ever order intake in 2010, breaking through the £100m mark worldwide; added to which, Q1 of 2011 has seen every station - including Harris Pye Brasil - report their busiest first quarter ever.
Alex McAndrew has a long association with the offshore oil and gas industry, and will be on the Harris Pye stand at OTC 2011 (Stand 6119) to renew acquaintances built up over the past 30+ years.
Most recently he worked with SLP Engineering and then C&D Group on the design, construction and then outfitting of a 180-person living quarters for the redevelopment of the BP Valhall field. Prior to that he worked for Allseas, Harris Pye Marine, Buckie Shipyard, BUE Caspian, Dubai Drydocks, Tees Dockyard, Rosyth Royal Dockyard (Babcock), Cleveland Bridge and Engineering and Scott Lithgow.
“I am delighted to have returned to Harris Pye and to be working in such an exciting offshore region,” says Alex McAndrew. “Recent discoveries of large offshore oil deposits are set to transform Brazil into one of the largest oil producers in the world; and, as the Harris Pye Group knows from its work around the world, exploration and production in ever-deeper waters holds its own challenges, needing innovative solutions and the fast turnaround on which we here at Harris Pye Brasil – backed by the Group’s global expertise - thrive.
“Brazil's oil production has risen steadily in recent years, with the country's oil production in 2010 about 150,000 bbl/d (6 percent) higher than in 2009 – we will be expanding to keep pace with what is going on in the waters off Brazil, and look forward to bringing our expertise to many challenging projects in the coming months and years.”
World oil market held in Houston
Date: 05/03/2011 11:47
In 2010, despite the climate of apprehension of the accident at BP's Gulf of Mexico, the event was not overshadowed his brilliance. And this year under the impact of the death of Osama Bin Laden and expectations about how the market will behave before the event, the Offshore Technology Conference (OTC), the largest global event in the oil industry is being held this week in Houston, Texas.
Despite the theme of this year's OTC to be "Diversity in Energy, Resources and People", with a strong focus on education and research and development, the Conference reiterates the debate over the Gulf of Mexico, intensifying the security issue offshore. Even at the fair since it could be seen in the presentation of the companies to put greater emphasis on offshore equipment and services aimed at improving safety and reducing environmental impact.
Also in the event, Brazil has an important role, not more focused on Petrobras, as occurred in previous years. In this edition, all the Brazil Pavilion, which attracts hundreds of vendors in the chain of oil, in addition to the National Petroleum Agency (ANP), and various associations such as IBP, Onip, Abemi Abimaq and this under the eyes of foreigners interested in watching closely the promising Brazilian market for oil and gas.
The event runs until this Thursday (5) with a comprehensive technical program and exhibition of nearly 2,500 representatives from 40 countries, designing the presence of 72,000 visitors. Complete schedule and more information: www.otcnet.org/2011
In 2010, despite the climate of apprehension of the accident at BP's Gulf of Mexico, the event was not overshadowed his brilliance. And this year under the impact of the death of Osama Bin Laden and expectations about how the market will behave before the event, the Offshore Technology Conference (OTC), the largest global event in the oil industry is being held this week in Houston, Texas.
Despite the theme of this year's OTC to be "Diversity in Energy, Resources and People", with a strong focus on education and research and development, the Conference reiterates the debate over the Gulf of Mexico, intensifying the security issue offshore. Even at the fair since it could be seen in the presentation of the companies to put greater emphasis on offshore equipment and services aimed at improving safety and reducing environmental impact.
Also in the event, Brazil has an important role, not more focused on Petrobras, as occurred in previous years. In this edition, all the Brazil Pavilion, which attracts hundreds of vendors in the chain of oil, in addition to the National Petroleum Agency (ANP), and various associations such as IBP, Onip, Abemi Abimaq and this under the eyes of foreigners interested in watching closely the promising Brazilian market for oil and gas.
The event runs until this Thursday (5) with a comprehensive technical program and exhibition of nearly 2,500 representatives from 40 countries, designing the presence of 72,000 visitors. Complete schedule and more information: www.otcnet.org/2011
Petrobras will launch bid for another four FPSOs
Petrobras is expected to launch later this year bids for the purchase of four vessels-FPSO to operate in areas of the onerous assignment. The statement was made shortly by the president of the state Gabrielli in conference during the Offshore Technology Conference (OTC).
"The first area to receive the Franco FPSO will be located around the field of Lula, in the Santos Basin. The expectation is that the area to start producing in 2015, " said Petrobras president.
Franco will be the main area of operation, accounting for 3,058 billion from 5 billion barrels of oil equivalent transferred by the government during the process of capitalization of the state.
"The first area to receive the Franco FPSO will be located around the field of Lula, in the Santos Basin. The expectation is that the area to start producing in 2015, " said Petrobras president.
Franco will be the main area of operation, accounting for 3,058 billion from 5 billion barrels of oil equivalent transferred by the government during the process of capitalization of the state.
2011-05-02
BHP and Vale give OK for $3.2bn Brazil expansion
May 2, 2011
BHP Billiton and Brazil's Vale have given the go-ahead for a $US3.5 billion ($A3.2 billion) expansion of their jointly owned Samarco iron ore pellets operation in Brazil.
The expansion will increase Samarco's annual iron ore pellet production capacity by 8.3 million tonnes to 30.5 million tonnes.
The cost of the expansion is higher than the $US2.86 billion originally flagged. And first production of the high-value steel-making raw material is now expected in the first half of 2014 compared with the original target of late 2013.
Advertisement: Story continues below The expansion project involves building additional mining capacity and a third concentrator at the Germano mine, a third (400-kilometre) slurry pipeline and a fourth pellet plant/upgraded ship loading capacity on the coast.
BHP Billiton president of iron ore Ian Ashby said Samarco was a low-cost supplier of iron ore pellets and during the past several years had increased its iron ore resource base.
''This investment builds on its resource and operational strengths and will further improve Samarco's competitiveness and market position,'' Mr Ashby said.
This follows Samarco's most recent expansion, which was completed just ahead of the September 2008 start to the global financial crisis. Samarco responded to the slump in demand by slashing production, leaving only the new (third pellet plant) on line.
Demand has rebounded strongly, reflected in seaborne trade in iron ore pellets fetching more than $US200 a tonne.
Samarco is one of many expansions that BHP has said would consume up to $US80 billion in capital expenditure in the next five years.
The big-ticket items for the group remain the expansions at its Pilbara iron ore operations and the Olympic Dam copper/uranium/gold project in South Australia.
BHP Billiton and Brazil's Vale have given the go-ahead for a $US3.5 billion ($A3.2 billion) expansion of their jointly owned Samarco iron ore pellets operation in Brazil.
The expansion will increase Samarco's annual iron ore pellet production capacity by 8.3 million tonnes to 30.5 million tonnes.
The cost of the expansion is higher than the $US2.86 billion originally flagged. And first production of the high-value steel-making raw material is now expected in the first half of 2014 compared with the original target of late 2013.
Advertisement: Story continues below The expansion project involves building additional mining capacity and a third concentrator at the Germano mine, a third (400-kilometre) slurry pipeline and a fourth pellet plant/upgraded ship loading capacity on the coast.
BHP Billiton president of iron ore Ian Ashby said Samarco was a low-cost supplier of iron ore pellets and during the past several years had increased its iron ore resource base.
''This investment builds on its resource and operational strengths and will further improve Samarco's competitiveness and market position,'' Mr Ashby said.
This follows Samarco's most recent expansion, which was completed just ahead of the September 2008 start to the global financial crisis. Samarco responded to the slump in demand by slashing production, leaving only the new (third pellet plant) on line.
Demand has rebounded strongly, reflected in seaborne trade in iron ore pellets fetching more than $US200 a tonne.
Samarco is one of many expansions that BHP has said would consume up to $US80 billion in capital expenditure in the next five years.
The big-ticket items for the group remain the expansions at its Pilbara iron ore operations and the Olympic Dam copper/uranium/gold project in South Australia.
Vale approves expansion of Samarco
Vale S.A. (Vale) informs that its Board of Directors has approved Samarco's fourth pellet plant project.
The project encompasses the construction of a fourth pellet plant with capacity of 8.3 Mtpy, increasing Samarco's iron ore pellets capacity to 30.5 Mtpy, the enlargement of the Ponta Ubu maritime terminal in the state of Espírito Santo, Brazil, and of mining and processing capacity at the Germano mine, in the state of Minas Gerais, Brazil, and a third line of the 396-kilometer iron ore pipeline linking the mine to the pellet plant. The start-up is scheduled for the first half of 2014 and the total investment is estimated at US$ 3.0 billion1, which is not part of Vale's own capital expenditures program.
The third line of the slurry pipeline will add 20 Mtpy to the current capacity, which will not only provide transportation for the project but will leave room for further expansions. All installation licenses required to proceed with the project implementation were already granted by the competent government authorities.
1 Capex estimate based on Vale's assumptions, including the evolution of the BRL/USD exchange rate. Vale has a 50% interest in Samarco, with the remaining 50% held by BHP Billiton
The project encompasses the construction of a fourth pellet plant with capacity of 8.3 Mtpy, increasing Samarco's iron ore pellets capacity to 30.5 Mtpy, the enlargement of the Ponta Ubu maritime terminal in the state of Espírito Santo, Brazil, and of mining and processing capacity at the Germano mine, in the state of Minas Gerais, Brazil, and a third line of the 396-kilometer iron ore pipeline linking the mine to the pellet plant. The start-up is scheduled for the first half of 2014 and the total investment is estimated at US$ 3.0 billion1, which is not part of Vale's own capital expenditures program.
The third line of the slurry pipeline will add 20 Mtpy to the current capacity, which will not only provide transportation for the project but will leave room for further expansions. All installation licenses required to proceed with the project implementation were already granted by the competent government authorities.
1 Capex estimate based on Vale's assumptions, including the evolution of the BRL/USD exchange rate. Vale has a 50% interest in Samarco, with the remaining 50% held by BHP Billiton
Offshore-driller Peregrine files for bankruptcy
Peregrine I LLC, the operator of an offshore-drilling vessel that is backed by units of General Electric GE +0.73% and Norwegian investment bank Pareto Securities, sought Chapter 11 bankruptcy protection.
Peregrine I reported assets and debts each in the range of $100 million to $500 million in its Chapter 11 petition, which court papers show the Cayman Islands company filed Monday with the U.S. Bankruptcy Court in Wilmington, Del.
Peregrine I's attorney didn't return a call seeking comment Tuesday.
The company listed EFS-M Inc., a unit of GE Energy Financial Services, and Pareto World Wide Offshore AS among its equity holders. Its two other equity holders are MMEER Cayman Management Ltd. and Investorprosjekt XXXIII AS, another Paredo unit.
Pareto World Wide Offshore invests in offshore oil-drilling projects. Christa Bowers, a spokeswoman for GE Energy Financial Services of Stamford, Conn., which targets capital-intensive energy assets, said Tuesday that Peregrine's bankruptcy filing was prompted by its inability "to continue to meet all the obligations necessary for the continued operation of the ship."
When asked what GE Energy Financial Services's role would be in the bankruptcy, Bowers said the company is now "considering all available options."
GE Energy Financial Services in December 2007 announced it would invest $54 million and co-finance Mike Mullen Energy Equipment Resource Inc.'s acquisition of Peregrine I, a deepwater oil-drilling vessel based in the Atlantic Ocean, off Brazil's coast. According to a press release, another GE affiliate arranged a $259 million senior debt facility in connection with that deal. Bowers declined to comment on the amount owed under the loan.
GE Energy Financial Services said WestLB AG served as agent for that loan, and the German bank is among the bank lenders listed in Peregrine I's bankruptcy petition. Other international banks are also listed as participants in that loan, including Banco Bilbao Vizcaya Argentaria (BBA), HSH Nordbank AG, Santander Asset Finance PLC and Sumitomo Mitsui Banking Corp.
Peregrine I's Chapter 11 case, numbered 11-11230, has been assigned to Judge Mary F. Walrath.
Peregrine I reported assets and debts each in the range of $100 million to $500 million in its Chapter 11 petition, which court papers show the Cayman Islands company filed Monday with the U.S. Bankruptcy Court in Wilmington, Del.
Peregrine I's attorney didn't return a call seeking comment Tuesday.
The company listed EFS-M Inc., a unit of GE Energy Financial Services, and Pareto World Wide Offshore AS among its equity holders. Its two other equity holders are MMEER Cayman Management Ltd. and Investorprosjekt XXXIII AS, another Paredo unit.
Pareto World Wide Offshore invests in offshore oil-drilling projects. Christa Bowers, a spokeswoman for GE Energy Financial Services of Stamford, Conn., which targets capital-intensive energy assets, said Tuesday that Peregrine's bankruptcy filing was prompted by its inability "to continue to meet all the obligations necessary for the continued operation of the ship."
When asked what GE Energy Financial Services's role would be in the bankruptcy, Bowers said the company is now "considering all available options."
GE Energy Financial Services in December 2007 announced it would invest $54 million and co-finance Mike Mullen Energy Equipment Resource Inc.'s acquisition of Peregrine I, a deepwater oil-drilling vessel based in the Atlantic Ocean, off Brazil's coast. According to a press release, another GE affiliate arranged a $259 million senior debt facility in connection with that deal. Bowers declined to comment on the amount owed under the loan.
GE Energy Financial Services said WestLB AG served as agent for that loan, and the German bank is among the bank lenders listed in Peregrine I's bankruptcy petition. Other international banks are also listed as participants in that loan, including Banco Bilbao Vizcaya Argentaria (BBA), HSH Nordbank AG, Santander Asset Finance PLC and Sumitomo Mitsui Banking Corp.
Peregrine I's Chapter 11 case, numbered 11-11230, has been assigned to Judge Mary F. Walrath.
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