Petrobras and Modec negotiate Búzios V

1/18/19/19

After stopping negotiations with Exmar, the state company tries to reduce the daily rate offered by the Japanese company

The long story of the charter of the FPSO of Búzios at last is coming to an end. Petrobras will hold the first direct negotiation meeting with Modecom Friday, the company that presented the second best price in the tender for the contracting of the production unit.

In practice, the meeting will determine whether Petrobras will continue to negotiate with the Japanese company in an attempt to revise the daily bid rate of US $ 815 thousand, or if the bidding commission will launch a new tender to charter the FPSO for the transfer of rights assignment.

The meeting was scheduled almost three months after the oil company asked Modec to revalidate its proposal.

Under the agreement, Petrobras would avoid launching a new tender, already under the rules of the State Law (13,303 / 2016) – in a process that could drag on for months – while Modec would guarantee a new FPSO contract with characteristics similar to the units that are under construction for Petrobras. The market questions, however, its ability to perform so many contractss.

Despite the interest of both parties, the mission will not be easy. The oil company will try to bring the price to a level close to the rate offered by Exmar, but Modec tends not to be so malleable in the negotiation, since the difference between the two proposals is significant.

Exmar offered a daily rate of US $ 635 thousand, but could not present financing, which made it impossible to sign the contract. Petrobras also detected a compliance problem with the Belgian group, and the Board of Directors was not comfortable in approving the contract in the face of uncertainty as to the actual capacity to execute the work due to the company’s lack of experience with FPSOs.

The commercial proposals of the tender, launched in May 2017, were opened in June of last year. At the time, both Exmar and Modec presented a proposal with high and low national content, as foreseen by the public notice. However, as the price with the highest local commitment was not above Petrobras’ budget, the second envelope was not opened.

According to a high-ranking source from the state-owned company, Exmar has already been excluded from the proceeding not only because it did not provide the guarantee of financing, but because the expiry date of its proposal has already expired. Companies have not held any kind of negotiations since the end of last year.

Exmar even hired Doris to do the FPSO engineering project. The French company had been carrying out the work, but at the beginning of the year, it paralyzed the activities for lack of payment, dismissing the team.

A source linked to Exmar says, however, that the financing is due to be closed by the end of February.

The company planned to build the Búzios V FPSO from a new hull and divide the work between China and Brazil. Búzios V would be Exmar’s first FPSO, which operates only one such unit in Libya. The group has experience in the area of ​​gas vessels, with more than eight FLNGs in the pipeline.

The Búzios V FPSO will be installed in the northern part of the field and will have the capacity to produce 180 thousand bopd and process 12 million m³ / day of gas. The charter term is 21 years, with the possibility of extension for an equal period.

Due to the delay in the process of chartering the production unit, Petrobras ended up reviewing the start date of the project in the Business Plan 2019-2023, released at the end of last year. Instead of 2020, as originally planned, the first oil of the fifth module of Búzios was postponed to 2021.

Source: Brazil Energy Magazine

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