Petrobras planning PLSV charter for Santos push

Petrobras is paving the way to charter up to nine flexible pipe­laying support vessels, as the Brazilian oil giant looks to secure a new batch of deep-water specialised vessels to help in the challenge of developing its pre-salt assets in the Santos basin.

Petrobras, which already contracted six such PLSVs a year ago for a total price of $2.9 billion, received technical and commercials proposals from a few companies via its own intra-network on 1 November, according to sources.

It is understood that Subsea 7, plus the Seadrill-SapuraKencana consortium and an alliance between Technip and DOF Subsea submitted bids in the tender, although the secrecy of the process made it almost impossible to detect any potential additional players.

“Bids were submitted online, but Petrobras opted not to disclose the prices immediately. They are first going to run a technical review to qualify the offers, and only after that commercial proposals will be revealed,” said one source.

Petrobras is seeking newbuild PLSVs with different tension capacities, and has divided the tender into three packages, with charters on offer for five or eight-year periods, depending on final prices.

The first and second lots featured 550-tonne and 650-tonne vessels capable of operating in water depths of up to 3000 metres.

The third package included smaller 300-tonne units with a mandatory requirement that these vessels must be built in Brazil. The oil company’s original goal was to have all vessels manufactured in Brazil holding a high local content, but Petrobras later relaxed that rule, giving contractors the option to build the larger PLSVs abroad.

SapuraKencana chief executive Shahril Shamsuddin told Upstream that the Malaysian player and its partner Seadrill bid together for five PLSVs in the latest tender.

The duo is already building three PLSVs for Petrobras, two abroad and one 300-tonne vessel at the OSX shipyard in Rio de Janeiro state. Shamsuddin said he expects the value of fresh vessel contracts to be “similar if not bigger” than the previous awards.

Another source said the Technip-DOF Subsea bids may include some 300-tonne units with the proposed construction in the STX OSV shipyard in Rio de Janeiro, as the two companies have worked there in the past on the construction of the Skandi Vitoria and Skandi Niteroi PLSVs for Petrobras.

The bidding rules state that first delivery for the bigger vessels is scheduled for about 42 months after the signing of the contract. If a company is awarded multiple contracts, each subsequent vessel will be delivered with an interval of six months between them.

Characterised by their high pipelay tension capacities, the 550-tonne and 650-tonne PLSVs will be employed mainly to install umbilicals, flexible flowlines and risers to connect subsea wells to floating production, storage and offloading vessels in the ultra-deepwater portion of the Santos basin.

Brazil Resources: High Potential Gold Exploration Miner

The necessity to own gold and silver as a form of protection is increasing by the day. The global wave of monetary stimulus seems unstoppable. The monetary base has reached historical highs in all Western regions and politicians don’t show any sign of changing their monetary policies. The historically low interest rates (zero-interest rate policies) result in negative real rates. The trust in the financial system is fading by the day. These are only the most important elements which make much higher gold and silver prices almost a sure thing.

One characteristic of precious metals is their very high stock to flow ratio. This truly differentiates precious metals from all other commodities. As the future demand for gold is expected to increase substantially, it’s very likely that supply will not be able to meet demand. In terms of supply, the gold rich deposits have become more and more scarce. Senior miners are struggling to find new deposits. So gold in the ground has never been as important as today.

Those facts bring us to the conclusion that exploration companies that develop economically viable projects will be big winners in the years ahead. It goes without saying it will be reflected in their stock price. However, the number of exploration and development companies that will survive is estimated to be between 10% and 20%, according to expert Rick Rule. Because of this, stock picking becomes critical.

Casey Research created a framework for investors, The Eight “P’s” of Resource Stock Evaluation, which describes how to increase the success in picking the right companies to invest in. This framework is based on the analysis of eight criteria which aid in evaluating natural resource companies and measuring their quality as an investment.

We have decided to apply this “Eight P investment model” to Brazil Resources Inc. (TSX.V: BRI, OTCQX: BRIZF). Brazil Resources is a publicly listed gold exploration company which is focused on the acquisition and development of projects in emerging gold districts located in Brazil and other South American countries.

(1) People: The management team’s track record of success

Brazil Resources’ management team has held senior management positions with world class mining companies such as BHP Billiton, De Beers, Kinross, Rio Tinto and Teck. Combined, they have an abundance of experience, particularly in South America having discovered and developed over 10 Moz in Brazil.

Amir Adnani is, chairman and co-founder of Brazil Resources Inc (“BRI”).  He is also co-founder and CEO of Uranium Energy Corp (NYSE MKT: UEC), one of the newest uranium producers in North America. With Mr. Adnani’s leadership, UEC transitioned from an exploration company to a uranium producer in just five years. He provides BRI with a strong presence in the capital markets and expertise in identifying and executing strategic acquisitions.

President and CEO Stephen Swatton has over 30 years of experience in the resource sector. He was the former head of BHP Billiton’s Business Development and Technical Team Division (exploration department). Prior to this he worked as an analyst and a field geologist for companies such as Yorkton Securities and Rio Tinto. Stephen’s diverse background makes him the perfect fit to run the company’s day-to-day operations and execute its unique business strategy.

Director Mario Garnero is the chairman, founder and principal shareholder of the Brasilinvest Group, one of the largest private merchant banks in Brazil. Mr. Garnero’s intimate knowledge of the Brazilian market provides BRI with a strategic advantage based on superior access to capital, projects, and people.

Director Enzio Garayp is former exploration manager for Kinross in Brazil. He directly oversaw the 8 Moz expansion of the 15 Moz Paracatu Mine.  His extensive experience in the numerous gold fields of Brazil is a valuable asset for Brazil Resources.

It’s worth noting that BRI’s management team holds 30% of the outstanding shares, which is an obvious sign of their commitment and dedication to their company.

(2) Property: Results of drilling programs and ownership of deposits

The strategy of Brazil Resources is to grow by acquiring advanced-stage gold projects, with proven resources, at the right price. The experienced management team, their ability to access capital and the in-house technical expertise have allowed the company to, thus far, successfully execute this strategy. We believe those elements are important conditions to make the M&A strategy work.

Four of the company’s projects are located within the Gurupi Gold Belt, where significant gold deposits have been discovered over the last few decades. The projects are in the early exploration to development phase and total 26,296 hectares of land, located near properties of Kinross Gold, Luna Gold, and Jaguar Mining. The properties have good infrastructure with road access and sufficient power.

The Cachoeira Project is the company’s flagship property. Falling in line with its mandate of acquiring advanced staged gold projects, BRI acquired the Cachoeira project from Luna Gold Corp. on September 25, 2012. The Cachoeira project has an NI 43-101 indicated mineral resource of 12.5 million tonnes at 1.11 g/t Au or 446,000 ounces of gold, and an inferred resource of 5.4 million tonnes at 1.27 g/t Au, or 221,300 ounces of gold.

Brazil Resources’ team was able to acquire the Cachoeira project for roughly $18/ounce in the ground, where historical valuations for gold in Brazil range between $50-$60/ounce. The gold at Cachoeira is near surface and past and present work confirms open pit potential.

Furthermore, the company has significant exploration upside with its Artulandia project, located in the central part of Brazil in Goais state. With a land package comprising of 104,800 hectares and a low acquisition cost, the first results from the technical team seem promising.  In September, BRI announced that their samples have confirmed a copper-gold anomalous zone of approximately 1,000m by 250m, which is open in all directions. The project is in its early stages of exploration, so more research and drilling will follow to understand its full potential.

(3) Phinancing: The financing to achieve the next phase of objectives

BRI has a strategic alliance with the Brasilinvest Group, which currently manages over $6 billion within Brazil and has a track record of attracting foreign investments, having already attracted investments in excess of $16 billion. Since its founding over 35 years ago, Brazilinvest has handled transactions for global companies such as ITT-Standard Electric SA, NEC, Bombril, Fiat and Volkswagen.  The alliance between BRI and Brasilinvest Group should prove to be valuable for future financing opportunities and sets the company apart from other junior miners.

In May 2011, 3.8 million shares were offered during the initial public offering. The IPO was completed at $0.65 per share, as the company raised $2.5 million. A second round of financing was completed at a share price of $1.10. Both financings did meet the intended target.

In these tough market conditions, where it is common practice for junior mining companies to issue warrants during financings, the fact that BRI has no warrants speaks to the caliber of management and the confidence investors have in the company.

The company currently holds a cash position of $7.2 million, as of Aug. 31 202, and no debt.

(4) Paper: The owners of the shares

30% of shares are held internally by management and 35% are held by institutional investors:

The KCR Fund, which is a private investment fund managed by well-known natural resource investors, Rick Rule, Doug Casey and Marin Katusa, are the largest shareholders of BRI, owning 16% of the company.

The Brasilinvest Group, one of the largest private merchant banks in Brazil, owns roughly 12%.  To the best of our knowledge, BRI is the only junior exploration company that has a bank as a major shareholder and a strategic relationship.

In addition, the company maintains a tight capital structure with only 39.8 million shares outstanding and no warrants.

(5) Promotion: The ability to reach out to investors

The ability to garner attention from resource investors is a function of having a well-respected track-record and a following.  Under Amir Adnani’s leadership, UEC transformed from grassroots exploration into the world’s newest uranium producer in five years.  This reputation has led to support from thousands of shareholders including institutions like Blackrock and Oppenheimer.   Additionally, Amir has been recognized by Casey Research as their “NexTen”, which showcases a group of rising executives with a history of success in the mining industry and the expectation that they will realize even greater success.  Amir’s track record and following has, and will continue to, attract the attention of resource investors to Brazil Resources.

All of this has led to strong attention for BRI from respected financial newsletter writers and analysts such as Mine2Capital in Canada, Mickey Fulp, James West, and Jay Taylor in the US, as well as other newsletter writers in Switzerland and Germany who have initiated coverage of BRI and include the Company in their model portfolios.

Finally, as Chairman of the Brasilinvest Group, Mr. Mario Garnero is strongly tied to both the political and private sectors in Brazil. He provides BRI with an opportunity to also build strong ties within the country.

(6) Politics: Risk of the political environment of mining operations

The projects are located in Brazil which is a politically stable and mining friendly jurisdiction. The country has much more political stability than most of the other countries in South America. The country offers an established legal system, reasonable infrastructure and skilled personnel. Brazil is a mining friendly country, with little threat to nationalization.

Foreign investments in Brazil have increased tremendously in recent years, going up fivefold since the beginning of the past decade, reaching 67 billion dollar in 2011, based on figures of the World Bank.

The country is preparing the 2014 World Cup soccer and the 2016 Olympics, which is attracting international attention and significant foreign investment.

(7) Push: Triggers that will move the stock higher

We discussed the ongoing plans of BRI with their investment department. It appears that the company plans to fast pace its growth by continuing its strategy of acquiring projects with proven resources. BRI is dedicated to acquire additional properties which have relatively low capital requirements which they can take into production in the near-term to generate cash flow.

The company is moving swiftly on its flagship property, Cachoeira, by hiring an engineering firm to begin environmental permitting and better understand economics. BRI is dedicated to becoming a mid-tier producer in less than five years.

News about the upcoming drill results from the other exploration projects in the company’s portfolio (Montes Aureos, Trinta and Maua in the Gurupi Gold Belt district) could push the stock higher.

(8) Price: The price at which gold or silver ounces are being valued

The overall strategy of the company is to acquire projects with proven resources (as discussed in point 2), because this market is not rewarding exploration risk. This strategy not only aids in keeping the cost per ounce of gold down, but also allows the company to develop projects with a low CAPEX. An example of this is the way Cachoeira was acquired. The company was able to acquire the project at about $18 an ounce. That’s extremely low as historically gold ounces in the ground in Brazil are valued at approximately $50-$60.

Remazel Engineering expanding role offshore

Remazel Engineering is looking to play its part in the offshore development boom in Brazil and the Far East.

The company, a specialist designer and builder of winches, mooring and pipe-laying/handling systems, previously worked exclusively for Saipem, with headquarters in nearby Milan. But following the strategic agreement signed last year, it is now free to pursue other clients and partners, which today include SBM and Chinese shipbuilding group COSCO.

Remazel equipment is installed on Saipem's entire fleet of drilling rigs, FPSOs and heavy-lift/pipelay vessels. This includes the newly-built pipelayer Castorone, for which the company supplied a 750-t double capstan/storage A&R winch and associated 750-t retractable sheave. Remazel is also designing the traveling arm winch for the planned giant J-lay tower, which will be added if Saipem is awarded a contract for a major new pipeline in the Mediterranean Sea.

The company was formed following a merger between Rema Engineering and Zambetti e Lumina. "Historically, our core business has been for pipelay vessels," said Remazel Sales Director Paolo Zani. "We can supply all equipment involved in the firing line, from the A&R winch to the stinger system. Today our equipment covers pipelay vessels, FPSOs, and drilling units as well with a wide portfolio of products we can offer." Saipem's always looking for a high level of equipment reliability, and in our case strong machines offering a high degree of redundancy.

"However, this was also presenting a problem for us as we looked to branch out, because the philosophy of other operators and installation contractors was different. The market was looking for more tuned products, and sometimes less customized but always with a high level of reliability. Our machines, by comparison, were bulkier being heavier-duty and the market approach we had since last year has obliged us to go through an intensive design review to reduce the costs but keeping the reliability and the performances at the top. And this will help us also with Saipem which of course remains as our primary client."

Following relaxation of the strategic agreement, Remazel embarked on an intensive marketing campaign focused on Brazil, China, North Europe, and Southeast Asia centered by Singapore. In June 2011 it formed a joint venture in Singapore called Rematech Offshore with three British companies specializing in complimentary equipment to Remazel's for floating production systems – offloading technology, drag chains, swivel stacks for turrets, and diverless bend stiffeners connectors. This provided the clout to bid to contractors in the region such as MODEC for FPSO offloading or Jurong for mooring systems. Remazel also appointed representative agents in Brazil and Houston.

Remazel equipment is installed on Saipem's entire fleet of drilling rigs, FPSOs and heavy-lift/pipelay vessels.

"This produced results," Zani explained, "as from the beginning of 2012 we started receiving enquiries from the big clients of the offshore market, such as Technip, SBM, Allseas, and from Singapore for several projects. We already got the order for some of them and we are now negotiating other important contracts, we are confident to progressively increase our market position."

In the middle of last year, Remazel also received an order from Brazilian shipbuilder Ecovix for eight identical mooring systems and fairleads for the presalt Tupi and Guara FPSOs under construction for Petrobras. The contract, valued approximately at $100 million, was subsequently changed due to local content requirements, and Remazel has been appointed as engineering advisor by Ecovix. "Now the situation is changed and we are discussing the possibility to enter again into the contract in a more direct way. If we are successful, we will produce some of the equipment items at our plant in Costa di Mezzate, and the rest in Brazil with final assembly at the Rio Grande do Sul Shipyard." Total weight of the consignment is over 6,000 metric tons. The equipment must be adapted to fit a very narrow space on deck. "We have to find a solution for the chain locker and storage, and we have to develop a mooring procedure to pay chain in and out. If we are successful, the first units would need to be delivered between June and November next year, a very tight schedule. To do this, we will need to bring in sub-suppliers in Italy and Brazil, and we will also need to open a local plant in Brazil, and to train a local workforce."

In January this year, the company signed a cooperation agreement with COSCO to jointly develop a new site near Nantong in China. "COSCO is preparing a factory naming COSCO Heavy Industry Co. (CHIC) which will fabricate our machines, starting by the end of 2013. We will train their workforce in fabrication and assembly, initially with relatively easy items such as mooring systems, then moving onto more complex items such as winches. The joint venture is not bidding at present for offshore projects, but if we do win an order, we would fabricate initially in Italy then start production in China for the need of Chinese offshore market. In parallel Remazel is developing sales and marketing in China, approaching all the offshore-specialist shipyards directly."

Remazel, with a permanent staff of approximately 100 employees, focuses on high technology equipment with a strong engineering content not only for the offshore industry but also for the onshore market with the design and fabrication of equipment for power plants.

Petrobras Enlists Citi to Sell Houston-Area Refinery

By Ben Lefebvre and Ryan Dezember

Petroleo Brasileiro SA has enlisted Citigroup Inc. to shop its Houston-area refinery as the Brazilian state-run oil company continues to shed assets to help fund offshore drilling back home, according people with knowledge of the sale effort.

A sale of the 100,000-barrel-a-day refinery will likely result in a loss for the company, known as Petrobras, which paid nearly $1.2 billion for the facility, one of these people said.

Petrobras acquired a 50% stake in the refinery in 2006, paying a subsidiary of Belgian commodities trader Transcor Astra Group S.A. about $360 million. Then, after a lengthy legal battle with its partner, Petrobras acquired the 50% it didn’t already own in July. Petrobras paid $820.5 million, with $466 million set as the value of the property and the remainder covering legal fees and interest expenses.

The price has prompted Brazilian lawmakers to question the purchase, according to local media outlets, which last week reported that the Brazilian Congress would call on a Petrobras executive to answer questions about the deal. On Tuesday a spokeswoman said the company was “unaware of any request to appear before Brazil’s Congress at this time.”

Still, the refinery could hold allure to some, primarily because of its location, said Morningstar analyst Allen Good.

Located it in Pasadena, Texas, just south of Houston, it is well positioned to receive the growing crude supplies coming out of shale formations in south and west Texas, Mr. Good said. And its location on the Houston Ship Channel connects it to important export markets, he said.

More than half of the Pasadena refinery’s output is gasoline, a fuel for which demand is rising in Latin American countries.

Petrobras is in the early stages of an effort to divest some $15 billion of assets before 2017 as it looks to raise money to fund development of its prolific yet expensive-to-drill fields deep off Brazil’s coast. Petrobras has said it plans to spend $237 billion developing those so-called subsalt fields.

Late Monday, Petrobras announced the sale of a 40% stake in an offshore block in Brazil to oil producer OGX Petroleo e Gas Participacoes for $270 million. In the U.S., Petrobras has hired Morgan Stanley to help it find a buyer for a stake in its Gulf of Mexico fields, which could bring in up to $4 billion, The Wall Street Journal earlier reported.

Meanwhile, the mandate to sell the refinery marks another success for Citigroup’s energy bankers, who are having a banner year in what has been the best year on record for oil and gas mergers and acquisitions by dollar volume.

Citigroup leads other financial institutions, advising on $101.3 billion worth of announced oil and gas deals this year, according to data provider Dealogic. In all, there have been nearly $296 billion worth such deals, excluding spin-offs and repurchases, meaning Citi has had a hand in roughly 31% of the year’s global oil and gas transactions, according to Dealogic.

Petrobras postpones bids in tender for FPSOs

Brazil’s Petrobras has postponed to early 2013 the opening of commercial bid documents covering integration work and construction of topsides modules for the first two floating production, storage and offloading vessels to be deployed on open acreage in the Santos basin pre-salt province.

Petrobras received bids from seven contractors to carry out integration of the P-74 and P-76 FPSOs on 14 September and was planning to reveal prices publicly on 8 November, but it is understood the company will now wait until next year to make its move.

According to sources, the decision was taken because Petrobras wants first to have a glimpse of the bids to be submitted on 14 December in another tender, this time for the integration and construction of topsides modules for the P-75 and P-77 floaters.

All four units will be installed on unlicensed acreage, including three at the giant Franco area and one, P-76, at the Tupi North-East accumulation. Each FPSO will have capacity of 150,000 barrels per day of oil and 7 million cubic metres per day of gas.

Quip, Jurong Shipyard, Engevix, CMO Construcao e Montagem and EBR, plus the Andrade Gutierrez-GDK and the Technip-Techint consortia presented offers in the first tender.

As part of the Quip group, only Queiroz Galvao, IESA and Camargo Correa took part in the bid, as the other partner, UTC Engenharia, is in the process of leaving the alliance.

Petrobras gave contractors three alternatives to bid in the tender. The first and second options allowed companies to submit offers solely for the P-74 and P-76, respectively, while the third option featured the possibility of a joint bid for the integration of the two units.

One source told Upstream that Petrobras has technically qualified the Technip-Techint bid for the P-76, also approving the proposals handed out by Jurong, CMO and Engevix for the P-74 or P-76, given it is unknown at this point as to exactly which unit each contractor bid for.

Petrobras also qualified the joint offers presented by EBR, Quip and Andrade Gutierrez-GDK, but has disqualified the Engevix bid for the two FPSOs on technical grounds.

CMO is proposing that FPSO integration takes place at its shipyard in the Suape area, in the north-east state of Pernambuco, near the Estaleiro Atlantico Sul facility. Jurong offered its new shipyard in Espirito Santo state.

Quip, Engevix and EBR have presented their respective shipyards in southern Rio Grande do Sul state, while Andrade Gutierrez-GDK is working to take the contract to a facility in Bahia state.

The Technip-Techint consortium offered the Paranagua yard, in Parana state, as the location for the integration of the FPSO. While the market eagerly waits for Petrobras to reveal the prices, many contractors are already preparing to bid in the second tender for the P-75 and P-77 floaters.

New players that are expected to feature this time include OSX, Mendes Junior, Keppel Fels and the Enseada do Paraguacu consortium made up of Brazilian engineering companies Odebrecht, UTC and OAS.

However, sources said that Petrobras will postpone the date for the delivery of bids from 14 December to sometime during the first quarter, likely stalling the entire process even further.

Despite the delays, sources agree that Petrobras should be able to have the four FPSOs operational as scheduled — the P-74 and P-75 in late 2016, and the P-76 and P-77 throughout 2017.

Meanwhile, Enseada do Paraguacu is already working on the conversion of the four FPSO hulls at the Inhauma drydock facility in Rio de Janeiro state.

Wärtsilä gensets and thrusters for Brazil drillships

 Wärtsilä, has been awarded a further order as part of the ongoing Brazilian program to build a number of drill units (DRUs) to serve its offshore oil industry. This latest in a series of contracts won by Wärtsilä is to supply complete mechanical packages, comprising the generating sets and thrusters, for three new drillships to be built by Brazilian shipyard ECOVIX (Engevix Construções Oceânicas S. A.). The vessels will be employed in Brazil's pre-salt offshore oil fields.

The three new drill ships will each be powered by six Wärtsilä 32 generating sets and will feature six Wärtsilä underwater demountable thrusters. The special requirements stipulated by the Brazilian authorities have all been met. Delivery of the equipment will begin in 2013.

Wärtsilä says that its extensive experience in supplying state-of-the art vessel propulsion solutions for complex offshore projects is seen as being a key factor in the award of this and previous related contracts within the framework of the DRU program. The programme involves significant investments in highly advanced special purpose vessels. The risks associated with project completion deadlines need, therefore, to be mitigated to the maximum possible extent. Of the contracts thus far awarded as part of Brazil's DRU program, Wärtsilä has been the most selected project partner.

"The emergence of Wärtsilä as the partner most frequently specified in the DRU program is no coincidence. Our experience as a global leader in systems integration, and our successful track record in providing total integrated solutions for the most demanding and difficult offshore applications, adds real value regarding the project completion targets," says Magnus Miemois, Vice President, Solutions, Wärtsilä Ship Power.

Braskem IDESA begins construction of the structures for the Ethylene XXI Project

Release date- 12112012 - BRASKEM IDESA, a joint venture in Mexico formed by Braskem and Grupo Idesa, has begun building the structural components of the Ethylene XXI Project, which is the largest petrochemical project under construction in the Americas.

The first columns and beams that will support the equipment and tubing have begun to be installed. Once the complex is inaugurated, which is slated for mid-2015, Braskem will consolidate its regional leadership and become the largest polyethylene producer in North America as well.

Following the conclusion of earthmoving works and the progress achieved on installing the foundation piles and foundations, the project has entered a new phase involving the construction of the structures that will support the equipment. The electromechanical assembly phase is expected to begin in the first quarter of 2013. The construction project, which was begun in 2011, continues in line with the initial timetable.

BRASKEM IDESA recently announced that it entered into a contract worth over US$2.7 billion with the joint venture formed by Odebrecht (40%), Technip (40%) and ICA Fluor (20%) for the engineering, procurement and construction (EPC) phases of the complex.

The Ethylene XXI project, which includes an ethane cracker and three polymerization plants, will have annual polyethylene production capacity of more than one million tons. The project's construction is aligned with the Mexican government's strategy of increasing its industrial development in the region.

About Braskem Idesa

Created in 2010, Braskem Idesa S.A.P.I. is a joint venture between Braskem S.A. (Brazil), the largest petrochemical producer in the Americas, and Grupo Idesa, Mexico's leading petrochemical producer. The companies are jointly developing the Ethylene XXI project, which consists of the construction and operation of a petrochemical complex producing polyethylene located in the Mexican state of Veracruz. The project will require investment of US$3.2 billion and will begin operating in 2015.

Brazilian construction group Odebrecht expects to post turnover of US$1 billion in Mozambique in 2020

Brazilian construction group Odebrecht expects to post turnover in Mozambique in 2020 of US$1 billion, said the group’s director for southeast Africa, speaking to financial news agency Reuters.

“In the next few years there will be significant developments in logistics for the coal and natural gas industries, and this is our main area of interest,” said Miguel Peres, adding that the company currently posts turnover of US$150 million per year in Mozambique.

Brazilian group Vale and Anglo-Australian group Rio Tinto, amongst others, are making significant investments in coal mining in the Moatize region, in Tete province, and transporting the coal from the mines produced is the main hurdle they are now facing.

The government and the private sector have announced projects to expand the current railroads and ports and two build other from scratch, and it is in precisely this area that Odebrecht plans to operate.

Peres said that a visit to the mines proved that there was coal everywhere that cannot be carried away due to a lack of transport capacity.

Odebrecht, which has been in the Mozambican market since 2006, has over 2,000 people on its payroll in the country, 80 percent of which are Mozambican.

Sembcorp Marine Bags $806.4M Drillship Order from Sete Brasil

Sembcorp Marine, through its wholly-owned subsidiary Jurong Offshore, said Thursday in a statement that it has secured a drillship contract worth $806.4 million from Sete Brasil Participacǒes. The contract will be for the design and construction of a drillship based on Jurong Shipyard's proprietary Jurong Espadon drillship design.

The drillship, scheduled for delivery no later than the third quarter of 2016, is the seventh unit of a series of drillships that Sembcorp Marine’s subsidiaries have secured since February.

Maybank's analyst Yeak Chee Keong noted in an offshore and marine sector update issued earlier in November that Sembcorp Marine "should continue to win good orders as long as fundamentals in the offshore oil and gas sector remain intact."

Yeak however also pointed out that one of the risk factors that could affect Sembcorp Marine’s future performance is competition from both the traditional South Korean shipyards and the emerging Chinese shipyards.