Subsea 7 said yesterday it had won even more work in Brazil, this time worth more than £1billion, despite it recently saying it was difficult to operate in the country.
On June 27, the offshore engineering giant announced it had taken a hit on one of its biggest contracts – blaming weather problems and difficulties in doing business in Brazil for the cost overruns and delays it suffered on a project in the Santos Basin.
Then last week it said it had secured a five-year deal with Brazil’s Petrobras, worth nearly £300million, for project management and engineering support as well as installation of flowlines, umbilicals and equipment.
Announcing an even bigger win yesterday, the Oslo-listed group said it had landed contracts from Petrobas for the construction and operation of three flexible pipe-lay support vessels (PLSVs).
Subsea 7 said the scope of the five-year deals – worth a combined £1.07billion – was similar to that for PLSVs it already operated offshore Brazil.
They cover project management, engineering and the installation of flowlines, umbilicals and equipment supplied by Petrobras.
The three new PLSVs – to be built at the IHC Merwede shipyard in the Netherlands – will be similar in design to Subsea 7’s pipelaying vessel Seven Waves, launched in May.
Subsea 7 said they would be delivered in Q3 2016, Q4 2016 and Q2 2017, and be able to operate in water depths of up to 9,840ft.
The total cost of the ships alone, including inventories, commissioning and mobilisation to Brazil, is about £636million.
Subsea 7 chief executive Jean Cahuzac said: “We are pleased with this award, which further strengthens our presence in this key deep-water territory.
“We are comfortable with the commercial model, the risk profile, and the expected financial return of these contracts.”
Mr Cahuzac had previously said it was difficult to work in the area, given the requirement for local content and problems with administration, import restrictions and taxes.