DW: Deepwater Construction Vessels: Brazil with a pinch of (pre) salt?

Last week’s auction for production rights to Brazil’s 12bn barrel Libra field has dominated industry headlines. However, despite years of media and market analyst hyperbole the scale of Petrobras’ plans for its deepwater pre-salt developments still command a great deal of head scratching, said Douglas Westwood.

“For example, we at DW expect that over the next five years the Brazilian NOC will account for 35% of global demand for deepwater subsea construction vessels and more acutely 60% of dedicated flexlay vessels – that‘s serious buying power.”

Undoubtedly, many are questioning whether the supply chain will be able to support this kind of ambition – there are certainly not enough vessels currently in the market. This reality has seen Petrobras instigate a wave of newbuild orders to work on long-term construction contracts with the recently announced $1.6bn deal with Subsea 7 to provide three dedicated flex layers (Technip and SapuraKencana have similar arrangements). Whilst the long term nature of these contracts will provide the security of utilisation there is some concern that the length and relatively limited service scope may inhibit the earning potential of these high-end assets. During the difficult years between 2009-2012 Brazil was widely regarded as the lighthouse in the storm for the deepwater service industry. However, with most analysts now projecting a rapid return to prominence for African-based activity, options are opening up and with them the promise of increased profitability for EPCI contractors.

With a new supply crunch for deepwater construction vessels expected in 2016 the challenge facing Petrobras appears to be providing the commercial incentive to continue attracting those largest contractors who are willing to invest heavily in the long term whilst also managing their internal costs to avoid further development delays.

Source: DW, October 28, 2013

 

Share this article

Follow Offshore Energy Today

Events>

<< Aug 2019 >>
MTWTFSS
29 30 31 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31 1

OEE Conference & Exhibition 2019

OEE2019 is organised by Ocean Energy Europe, the industry association representing ocean energy in Europe.

read more >

Shanghai Int Petrochemical and Offshore Oil & Gas and Chemical Industry Technology and Equipment Exhibition 2019

cippe Shanghai has attracts both…

read more >

OWI LATAM 2019

Over the two-day conference, 25+ expert speakers will share exclusive insight on how to develop an integrity, production and P&A strategy…

read more >

Uganda International Oil and Gas Summit 2019

Uganda International Oil & Gas Summit will once again examine the industry’s developments…

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply