Italian oilfield services firm Saipem has confirmed it has recently been awarded a limited notice to proceed (LNTP) by BW Offshore, for the early-stage engineering services for the supply of an FPSO unit to be supplied to Shell for the development of the Gato do Mato field offshore Brazil.
The oil and gas field is located around 200 km offshore Brazil in the Santos Basin, in water depths of around 2,000 meters.
The LNTP is valued at up to $50 million. Saipem’s share is worth approximately $25 million.
Upon completion of the LNTP, Shell and its partners target to award a lease and operate contract which will include the award of the engineering, procurement, construction, and installation (EPCI) of the FPSO to a consortium between Saipem and BW Offshore, with expected delivery in 2026.
“The award is subject to the parties finalising the commercial and pricing terms of the contract in view of the current inflationary supply chain market and a final investment decision to proceed by Shell and its partners,” Saipem said.
BW Offshore has previously said that the FPSO lease and operate contract would have a firm period of 18 years with seven years of options.
The company said it would replicate the Barossa project model, bringing in equity partners, and “take it one step further by partnering with Saipem for the EPCI phase to add execution capacity and capabilities.”