Petrobras forecasts huge jump in crude exports

Brazil’s Petrobras expects oil exports to rise by 46% by 2014 and to more than triple by the end of the decade as it brings its huge subsalt fields onstream.

Crude shipments will reach 734,000 barrels per day within three years and 1.735 million bpd by 2020, according to Petrobras marketing official Leoncio Ackstein who was speaking at a conference in Singapore.

Exports will rise from a projected 505,000 bpd this year to 534,000 bpd. The oil will come from the 849,000 bpd of the company’s 11 export grades of crude it projects it will produce next year. Petrobras’ output is currently just shy of 2 million bpd.

The company expects production to reach 2.8 million bpd in 2014 and rocket to near 5 million bpd by the end of the decade.

Petrobras is targeting Asian markets for its expanding oil output as more subsalt projects such as the giant Lula field ramp up towards full production. Asian countries, particularly China, are positioning themselves to capture a significant slice of the expected boom in exports once Petrobras develops its subsalt reserves.

China has already signed a loans-for-oil deal with Petrobras and its oil companies have expressed interest in partnering with Petrobras in future subsalt exploration blocks still to be auctioned off by the Brazilian government.

On a visit to Brazil this year, US President Barack Obama also said the US wanted to be a major customer for Brazilian oil. Obama has come under attack for giving Petrobras US$2 billion in financing via the US Import-Export Bank to allow it buy equipment and services in the US for its ultra-deep sea drilling campaign while at the same time opposing relaxing strict regulations inhibiting deep-sea drilling off the US coast.

Technip and Global Industries Agree to Merge

Date: 09/12/2011 16:01
Technip announced Monday an agreement to acquire the entire share capital of Global Industries and reinforce its leadership in the fast-growing subsea segment of oil services. The two companies have entered into a definitive merger agreement whereby Technip will pay US$8.00 per Global Industries share. The transaction values Global Industries at US$1,073 million (EUR768 million at current exchange rates), including approximately US$136 million of net debt. The Board of Directors of Global Industries has unanimously approved the transaction.


The transaction price represents a 55% premium to Global Industries' share closing price on September 9, 2011, the last day prior to announcement of the transaction. The transaction is to be funded using existing cash balances and credit facilities.


Global Industries brings to Technip its complementary subsea know-how, assets and experience, comprising 2,300 employees operating 14 vessels, including notably two newly-built leading edge S-Lay vessels, as well as strong positions in the Gulf of Mexico (US and Mexican waters), Asia-Pacific and the Middle East.


Technip's global presence, world-class technologies, assets and services and strong project management track record will realize the full value and potential of Global Industries' know-how, assets and experience, and broaden opportunities for Global Industries' employees.


The acquisition of Global Industries reinforces Technip's leadership in the fast-growing subsea market. Strong revenue synergies are expected as the acquisition will substantially increase Technip's current capabilities and expand its addressable market by around 30% in deep-to-shore subsea infrastructure. Cost synergies are estimated to be at least US$30 million.


Given the anticipated synergies, the transaction is expected to be accretive to Technip's earnings per share by around 5 to 7% in 2013.


The transaction is expected to close early in 2012. The management teams of Global Industries and Technip will work closely together to define the integration plan. Thierry Pilenko, Chairman and Chief Executive Officer of Technip, said:


"The acquisition of Global Industries reinforces Technip's leadership in Subsea, one of our three market segments alongside Onshore and Offshore. The subsea market looks likely in 2011 to show a record amount of orders for our industry and our own backlog at end-June 2011 is above its previous peak. We see that our customers continue to firm up a substantial number of large offshore developments with Brazil, the Gulf of Mexico, West Africa and Asia Pacific leading the way to drive future growth. Our investment in Global Industries substantially expands our addressable market in subsea. Global Industries' capabilities, know-how and experience, notably in S-Lay and Heavy Lift, add to our already unique vertically integrated range of products and services, enabling us to offer our clients greater value in the execution of complex projects from deep-to-shore. We expect that the application of Technip's own skills in offshore and subsea developments, its commercial footprint and its project management experience will drive a rapid deployment of the Global Industries teams and assets on customer projects. The transaction is expected to meet our hurdle rate, create value for Technip's shareholders, and raise earnings per share starting by around 5 to 7% in 2013."