Subsea 7 open to closing new lump sum contracts in Brazil

Subsea 7 is open to closing new lump sum contracts with Petrobras, according to the company’s director of operations, John Evans.

“We noticed an improvement in terms and conditions with Petrobras, and we are comfortable with them. Today we see things are headed in the right direction to start discussions with the company,” the executive said during an investor conference last week.

Lump sum is a contract model where the overall price charged for the product or service is determined prior to the completion of the project.

Evans’s statement was in response to an analyst’s question about the company’s willingness to participate in the SURF for Libra bid, launched earlier this month by the state-owned company.

In 2013, during a conference on the Guará-Lula NE project, the CEO of the Norwegian EPC, Jean Cahuzac, stated that Subsea 7 would not participate in new bids with this pre-salt contractual model, “unless the terms and conditions , schedule and risk profile improved significantly. ”

At the time, the company announced that project costs would be between $ 250 million and $ 300 million more expensive than originally planned, impacting its overall financial result.

Subsea 7 was one of the four specialists invited by Petrobras to participate in the bid for the Mero Field SURF in the Santos Basin pre-salt, along with Allseas, Heerema and McDermott.

Last week, the latter company declined a new bid from Subsea 7 for its acquisition, but the Scandinavian company said it was ready to submit a new offer.

“A combination with McDermott is justified by industrial logic. We would be happy to discuss our proposal with the board of McDermott, “said Cahuzac.

Should the US company accept the offer, Mero’s bid will risk only two participants, since on April 24, Heerema announced that it intends to discontinue its submarine launch activities.

Brasil Energia Petroleum has approached Petrobras to see if the company is re-evaluating its decision not to invite Saipem, Sapura and TechnipFMC to the bidding, but Petrobras declined to comment.

Source: Brazil Energy

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