Halliburton Co. is close to finalizing a $2.5 billion contract that may be the biggest ever awarded to a single contractor for engineering, procurement, installation, and construction of an offshore project.
The company reached agreements in late January with Barracuda & Caratinga Development Corp. (BCDC) on pricing, an execution plan, and a delivery schedule for development of two deepwater fields in the Campos basin about 80 km off Brazil.
It also will be the largest project financed with foreign capital in Brazil, officials say.
The BCDC consortium was formed in 1998 by Mitsubishi Corp. and includes Itochu Corp., Deutsche Morgan Grenfell, Merrill Lynch, Industrial Bank of Japan Ltd., and Banque Paribas. Debt financing is to be repaid by production.
Negotiation of remaining contract issues is expected to be completed in late February. The contract is slated to be signed in late March, subject to completion of financing.
Two Halliburton business units-Brown & Root Energy Services and Halliburton Energy Services-will cooperate on that project, with construction of 51 wells; fabrication and installation of flowlines and risers; and the commissioning, start-up, and operational support of Barracuda and Caratinga fields.
State-owned Petroleo Brasileiro SA in 1998 signed a project financing agreement with the Mitsubishi-led bank group for development of the two fields (OGJ, Sept. 21, 1998, p. 41). Petrobras started up production from the two fields in 1997 from a pilot system installed in Barracuda (OGJ, Oct. 7, 1997, Newsletter).
Under the contract, Halliburton also will build and install two floating production, storage, and offloading vessels (FPSOs) for the two fields. Each FPSO will have a storage capacity of 2 million bbl of oil and a production capability of 150,000 b/d.
At least 40% of the value of the FPSO work will be done in Brazil, says Halliburton.
Petrobras will provide the offshore rigs and management for drilling operations.
Halliburton officials declined to discuss other details of the project pending completion of negotiations.
However, other industry sources earlier indicated that Barracuda field, in 2,573 ft of water, would require 39 subsea wells and either a spar or tension-leg platform, at an estimated total cost of $1.5 billion.
Another 22 subsea wells-12 producers and 10 injectors-would be required for the Caratinga field, in 3,396 ft of water.
