Friday, October 7, 2022

Saipem bags US$25M contract to engineer Brazil-bound FPSO

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Italian oil services company, Saipem, announced a US$25 million contract from floater operator, BW Offshore Limited, to provide early-stage engineering services on an oil production vessel for Shell’s Gato do Mato oil and gas field in Brazil.

BW issued a limited notice to proceed (LNTP) valued up to US$50 million. Saipem’s share is US$25 million.

Saipem explained that the LNTP is an important step for the project, with its team already fully mobilised to commence works.

When the LNTP is completed, Shell and its partners will look to award a lease and operate contract that will include the award of the engineering, procurement, construction, and installation (EPCI) of the floating, production, storage, and offloading (FPSO) vessel to a Saipem-BW consortium.

The vessel is expected to be delivered by 2026.

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In 2010, Shell made the Gato do Mato discovery in Brazil’s S-M-518 block, about 200 km offshore in the Santos Basin, in water depths of around 2,000 meters.

“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 along with a final investment decision to proceed by Shell and its partners,” Saipem said.

BW Offshore 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 its 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.”

Saipem is a major contractor for ExxonMobil Guyana, operator of the offshore Stabroek Block in Guyana. As with previous Guyana projects, Saipem is set to deliver a major subsea system for the country’s largest approved oil project to date – Yellowtail. The contract includes the Engineering, Procurement, Construction, and Installation (EPCI) of the Subsea Umbilicals, Risers & Flowlines (SURF).

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