RIO DE JANEIRO - Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, confirmed late Monday that it will start building four oil platforms in China instead of Brazil, but denied that the shift means the company will not meet strict requirements to use local goods and services.
Petrobras said that work to convert oil tankers into the P-67, P-75, P-76 and P-77 platforms would start in China, but that the work represented less than 3% of the value of the contracts to build the floating production, storage and offloading vessels, or FPSOs. The conversion, however, will be completed in Brazil, Petrobras said. The P-67 platform is part of an order for eight replicated FPSOs, while the other three platforms will be used to produce oil from areas transferred to the company from the government.
Earlier Monday, the local O Estado de S. Paulo newspaper had reported that Petrobras shifted construction of the FPSOs overseas amid concerns that local shipyards would not meet deadlines to complete construction and cause production delays. Petrobras is currently struggling with stagnant oil production because of maintenance shutdowns at aging offshore platforms and declining output at mature fields.
Concession contracts in Brazil require companies to use a certain percentage of local goods and services, part of a government strategy aimed at creating a robust oilfield-services sector to accompany development of recently discovered offshore oilfields. Petrobras plans to spend $237 billion through 2016 to develop the fields, where oil was discovered under a thick layer of salt miles under the seabed off Brazil's southeast coast.
"The index of contracted local content is immutable, and Petrobras is not trying to alter it," the company said.
Copyright (c) 2012 Dow Jones & Company, Inc.
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