OSX, Partner Sign Contract to Complete Petrobras Platforms

RIO DE JANEIRO - Brazilian shipbuilder and oil-field services company OSX Brasil SA, part of Brazilian businessman Eike Batista's industrial empire, said Tuesday it had signed a contract with a group including federal company Petroleo Brasileiro, or Petrobras, to finish work on two floating platforms.

The contract was expected after OSX executives had said in a July 27 conference call that the deal would be signed in the first week of August. Petrobras had announced in late July that OSX and consortium partner Mendes Junior had won bidding to install topside processing equipment on two floating production, storage and offloading, or FPSO, vessels.

OSX has widened its reach this year as it positions itself as a player in Brazil's naval construction and offshore oil services industry, building on the company's first contracts with sister company OGX Petroleo e Gas Participacoes S/A. OSX has also signed deals to build tankers for Kingfish do Brasil Navegacao S/A and is in talks to build drilling rigs that will be leased to Petrobras.

OSX and partner Mendes Junior, a local engineering firm, will install processing equipment on the decks of the P-67 and P-70 FPSO's, integrating the equipment with the converted oil tanker. Petrobras, BG Group and Portugal's Galp Energia will use the FPSOs to produce oil from ultra-deepwater oil fields known as the pre-salt, a cluster of oil discoveries made more than four miles deep off Brazil's southeast coast.

OSX shares were down 1.9% at 12.49 Brazilian reais ($6.18) on the Sao Paulo Stock Exchange as of 1705 GMT. The shares underperformed the broader market as measured by the Ibovespa stocks index, which was fractionally higher at 59,139 points.

Copyright (c) 2013 Dow Jones & Company, Inc.

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