Report: Samsung, Hyundai, Daewoo gearing up for Petrobras FPSO tender

Three consortia including Asian shipyards are preparing to compete to build Brazil’s Petrobras’ first two in-house platforms in more than seven years, according to four people familiar with the tender who declined to be named as the information is private.

Samsung Heavy Industries Co, Hyundai Heavy Industries Holding Co Ltd and Daewoo Heavy Industries & Machinery Ltd have formed separate consortia that are expected to bid after seven months of preparations, the sources said. Offers are due on Monday, Feb. 1.

Samsung and Petrobras declined to comment. Daewoo and Hyundai did not immediately respond to comment requests.

The competition marks Petrobras’ comeback as a key market for Asian shipyards.

Similarly sized units have cost before around $1.7 billion each to be built, one of the sources said. Petroleo Brasileiro SA, as the state-controlled company is known, is hiring units able to produce 180,000 barrels per day and 7.2 cubic meters of gas, each.

The platforms are effectively massive ships with deep-water drilling equipment that are vital for offshore oil exploration. They are known as FPSOs, or a floating production storage and offloading units.

The debate on where Petrobras should build its own platforms has been a key issue in presidential campaigns over the past two decades in Brazil.

Construction of the hull is labor-intensive, leading past administrations to create domestic-content rules. Those have been eased after a corruption scandal, although the exact local content percentage will only be known once a winner is selected.

Brazil’s biggest-ever corruption investigation – known as Carwash – exposed multi-billion dollar bribe payments from Petrobras suppliers aimed at securing contracts, including for platform construction in Brazil and in Asia.

Buried in debt, Petrobras spent more than seven years only leasing its platforms, using long-term contracts that can be amortized over 20 years. Dutch-based SBM Offshore NV and Japan’s Modec Inc split the biggest contracts.

Modec and SBM were pre-qualified to participate but have dropped out of the competition, preferring the leasing model in which they can use their own engineering instead of Petrobras’, like the current bid.

By Sabrina Valle and Marta Nogueira;

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