Eric Watkins
Senior Correspondent
LOS ANGELES, Mar. 8 -- Brazil's state-owned Petroleo Brasileiro SA (Petrobras) has announced the signing of contracts worth $910 million to finance its Director Plan for Flow and Treatment of Oil (PDET) for the Campos basin.
The aim of the financial arrangement is to improve the flow of crude oil at five of Petrobras's offshore platforms located in the Campos basin, at Roncador, Marlim Sul, and Marlim Leste fields.
Petrobras said PDET Offshore, a locally based joint venture comprised of Mitsubishi (60%) and Marubeni (40%), would undertake the project and sign the financing contracts.
Project details
The PDET project, forecast to start commercial operations in December 2006, envisages the construction and installation of a fixed jacket-type platform (PRA-1); 2 monobuoys, connected to PRA-1 through subsea oil lines; and other ancillary equipment.
The project will allow the supply of shuttle tankers, to be connected to PRA-1, that will deliver the oil produced on P-51, P-52, P-53, P-55 and RO-4 platforms to Petrobras's coastal terminals and, from there to Brazilian refineries, or directly for export to other countries.
Petrobras said the PDET project is expected to increase the flow capacity to as much as 630,000 b/d of the oil from the Campos basin. In a statement, it said the project would "decisively" contribute in allowing it to fulfill Brazilian oil demand and to export the surplus.
The Campos Basin is the country's most prolific oil region, producing more than 80% of Brazil's 1.5 million b/d and, according to the US Energy Information Administration, it "has underpinned Brazil's recent increases in crude oil output."
But EIA also notes that delays in bidding and in construction of offshore oil production platforms were the main reasons behind Petrobras's failure in meeting its oil production target for 2003.
"In late 2002, the federal government adopted new regulations requiring oil companies in Brazil to devote a percentage of their investments to purchase goods and services provided by domestic firms, also known as local content requirements," EIA said.
Regarding platform construction, companies were required to build or to assemble a large part of their platforms in Brazil, with a large percentage of the parts manufactured domestically.
Construction delays
As a result, according to EIA, "Petrobras consequently had to delay its tender for P-51 (Marlim Sul field) and P-52 (Roncador field), planned for February 2003, in order to incorporate these new requirements in its bidding process."
Petrobras awarded contracts for P-52 and P-51 units in December 2003 and June 2004, respectively. The intention of the local content requirement is to create more jobs and develop local expertise, as most oil platforms and rigs in Brazil were previously built abroad.
Construction delays were responsible for pushing back the start up dates of Petrobras' P-43 (Barracuda) and P-48 (Caratinga), originally scheduled for the end of 2003, until fall 2004.
The construction of the P-50 floating, production, storage, and offloading unit for Albacora Leste field was also reportedly behind schedule, pushing back the original start up date of 2004 to late 2005, EIA said.
In connection with its new financial arrangements, Petrobras underscored the number of jobs and the local content of the PDET project.
"It is estimated that with the implementation of the project, around 8,000 direct jobs will be created in Brazil during the phase of construction of the assets, including the 2 monobuoys, the platform, its jacket and modules, and that the Brazilian content in equipment and services will be around 65% of the total cost," Petrobras said in a statement.
It said PDET financing is to be provided by the Japan Bank for International Cooperation, $491.4 million, and the Mitsubishi-Marubeni JV, $91million. The financiers also include a pool of commercial banks.
