A vessel worth 21.7 billion sets a new record! Sembcorp Marine wins FPSO order from Petrobras

2022-10-09 09:00

Following last week's US\$2.8 billion order from Keppel Offshore & Marine, Sembcorp Marine, another major Singaporean offshore and marine company, has also received a contract for a floating production, storage, and offloading vessel (FPSO) from Petrobras, Brazil's national oil company. The contract, valued at over US\$3 billion, sets a new record for FPSO order value.

On October 5, Sembcorp Marine announced that its wholly-owned subsidiary, Sembcorp Marine Rigs & Floaters, had won the engineering, procurement, and construction (EPC) contract for Petrobras' P-82 FPSO through international bidding. The contract is worth approximately US\$3.05 billion (approximately RMB 21.704 billion). This is Sembcorp Marine's largest contract from Petrobras, adding over S\$4.25 billion to its order book of approximately S\$2.52 billion as of June 30, 2022.

The FPSO is expected to be delivered in the first half of 2026 and put into operation within the same year. This is the third of the world's largest FPSOs for the Buzios oil field, following Petrobras' orders for similar vessels, P-80 and P-83, from Keppel Offshore & Marine in late August and September.

The P-82 will be able to process 225,000 barrels of oil and 12 million cubic meters of natural gas per day, with a water injection capacity of 250,000 barrels per day and a storage capacity of 2 million barrels of oil. It will become one of the largest FPSOs in Brazil and worldwide. This is part of Petrobras' new generation of production facilities, featuring high capacity and carbon dioxide emission reduction technology.

William Gu, head of Sembcorp Marine Rigs & Floaters, said: \"We are grateful to Petrobras for selecting Sembcorp Marine for this landmark project. Sembcorp Marine has a complete EPC newbuild execution capability, built on a strong track record of delivering floating production facilities to FPSO operators and oil majors. Combined with our advanced shipyard facilities in Singapore and Brazil, we are fully capable of undertaking a complex project like the P-82.\"

Wong Weng Sun, President and CEO of Sembcorp Marine, said: \"We are very pleased to receive this contract and support Petrobras in developing its FPSO fleet in Brazil. We have been supporting Petrobras for the past few decades and appreciate Petrobras entrusting Sembcorp Marine with another project - the P-82.\"

It is understood that Sembcorp Marine has delivered 13 FPSOs/floating storage and offloading vessels (FSOs)/floating production units (FPUs) to Brazilian waters to date. The most recent delivery was in September 2019, when Sembcorp Marine's wholly-owned subsidiary, Estaleiro Jurong Aracruz (EJA), delivered the newly built FPSO P-68, currently deployed in the ultra-deepwater Berbigão and Suru oil fields in the Santos Basin, Brazil. EJA is expected to deliver another newly built FPSO, P-71, in the fourth quarter of 2022, to be deployed in the Itapu oil field.

It is understood that Petrobras launched international tenders for the P-80 and P-82 in April last year. Keppel Offshore & Marine signed the EPC contract for the P-80 in August this year, for approximately US\$2.9 billion. Petrobras also intended to award the P-82 contract to Keppel Offshore & Marine, but due to bidding rules requiring that the P-80 and P-82 be provided by different shipyards, the P-82 contract was ultimately awarded to Sembcorp Marine.

In late September, Petrobras also signed an EPC contract with Keppel Offshore & Marine for the P-83, for approximately US\$2.8 billion. Including the latest P-83, Petrobras has invested US\$8.75 billion (approximately RMB 62.265 billion) this year in ordering three FPSOs, all from Singaporean shipbuilders.

In April this year, Keppel Corporation and Sembcorp Marine reached a final agreement. Keppel Offshore & Marine and Sembcorp Marine are expected to complete their merger by the end of this year, creating a world-leading company focused on clean solutions for the offshore renewable energy, new energy, and offshore and marine industries. Temasek Holdings, Singapore's sovereign wealth fund, will be the largest shareholder in the merged entity.

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