Petrobras Starts Work on First Transfer-Rights Area Platform

RIO DE JANEIRO - Brazilian state energy company Petroleo Brasileiro S/A, or Petrobras, said Tuesday that it had started work to convert an oil tanker into the first floating production platform to be installed at an offshore oil field transferred to the company by the government.

The Very Large Crude Carrier will be converted into the P-74 floating production, storage and offloading vessel, or FPSO, Petrobras said. The ship was moved into a dock at the recently refurbished Estaleiro Inhauma on Monday, the company said.

The tanker conversion will be the first of its type to be carried out in Brazil as local shipbuilders ramp up operations to meet demand for tankers, support vessels, drilling rigs and production platforms. Inhauma, which in the 1980s was the world's second-largest shipyard, is part of a rebirth of Brazil's shipbuilding industry driven by development of recently discovered oil fields off Brazil's Atlantic coast.

The transfer-rights area is an important part of Petrobras's development of the Santos Basin presalt region, a cluster of oil discoveries made under a thick layer of salt more than four miles below the ocean's surface. As part of the company's 2010 share offer and capitalization, the government gave Petrobras the right to produce up to 5 billion barrels of crude oil from highly prospective areas close to the original presalt finds.

The P-74 is the first of four FPSOs that will be built at Inhauma specifically for the transfer-rights area, Petrobras said. The conversion is expected to be completed by June 2014. A consortium formed by local construction firms Norberto Odebrecht, OAS Ltda., UTC Engenharia SA and technical partner Kawasaki Heavy Industries Ltd. will handle the $1.7 billion job to convert the tanker and subsequent conversions for the P-75, P-76 and P-77 FPSOs.