Execution of contract

The Brazilian energy company Petrobras announced that together with partners BG, Galp Energia, and Repsol, and through its Tupi-BV and Guará-BV affiliated companies, it signed two contracts with the Brazilian outfit Engevix Engenharia S.A. for the construction of eight hulls for the platforms to be used in the first phase of the production development for the pre-salt area in the Santos Basin.

These units are part of the new strategy for the construction of production units, designed to simplify projects and standardize equipment. Producing identical hulls in series will accelerate the construction phase, and allow economies of scale and cost optimization.

Each platform, all of which FPSOs (floating, production, storage and offloading units) will be able to process up to 150,000 barrels of oil and 6m cum of gas per day. All units are expected to start operating by 2017 and to reach the production targets set in Petrobras’ Business Plan for the pre-salt area. The expectation is that these platforms will add about 900,000 barrels of oil per day to domestic production when operating at maximum capacity.

The hulls will be built at the Rio Grande Naval Pole (state of Rio Grande do Sul), with local content expected to reach around 70%. The first steel shipments will take place in January, and hull constructions will start in March. The first two hulls will be delivered in 2013, and the others in 2014 and 2015.

Of the eight units, six will be operated by the consortium formed for Block BM-S-11, where the Tupi and Iracema areas are located. The two others will be operated by the consortium formed for Block BM-S-9, where the Guará and Carioca fields are located. The Block BM-S-11 consortium is operated by Petrobras (65%), in partnership with BG E&P Brasil Ltda. (25%), and Galp Energia (10%). The Block BM-S-9 consortium is operated by Petrobras (45%), in partnership with BG E&P Brasil Ltda. (30%), and Repsol Brasil S.A. (25%).