Prysmian Cables & Systems has signed a four-year frame agreement with Petrobras for the design and supply of flexible pipes for offshore oil & gas extraction. Initial supply value is $135 million with significant potential development. This agreement represents a major step forward in the expansion of Prysmian's operations in the Oil Gas & Petrochemical (OGP) services industry, confirming its commitment to invest in value-added businesses with higher profitability and levels of technology. The addition of Flexible Pipes to its current production of both steel and thermoplastic umbilicals will enable the Company to offer a comprehensive range of SURF products (Subsea Umbilicals, Risers and Flowlines) meeting the needs of the OGP industry.
Prysmian will invest around $110 million for the construction of a new plant in Brazil. The new plant production capacity will be partly covered by the first supply agreement with Petrobras, allowing capacity for potential business development in the future. The new plant will complement the one dedicated to the production of subsea umbilicals opened in Brazil in early 2007.
In particular, Prysmian will supply Petrobras with a wide range of dynamic risers and static flowlines, covering up to 6" diameter pipes to be installed at great depths. Prysmian will develop this range of Risers and Flowlines through a series of Technical Cooperation Agreements (TCA's) with Petrobras, the first of which was signed in January of this year. Valerio Battista, CEO of Prysmian S.p.A., commented on this major breakthrough: "We are delighted to further strengthen our 30 year-long relationship with Petrobras; this agreement is witness to our long term commitment to the key Brazilian market and specifically to Petrobras. In addition to this initial supply, the Technical Cooperation Agreements with Petrobras will allow Prysmian to further expand its range of products, with a strong potential for sales' growth in the upcoming four year period".
Prysmian's Industrial cables business in 2007 recorded sales for 795 million Euro, with OGP products representing over 25%. Prysmian's OGP product offering includes Airguard and umbilical technologies, together with a range of submarine power cables; Onshore and Offshore cables to BS, IEC and NEK standards; optical fibers and telecom cables, as well as a comprehensive range of connectivity components (joints, glands and accessories) for all technologies. The newly developed Flexible Pipes will move Prysmian even further in to the higher-end sector.
To further strengthen its market position and to follow customers closely, Prysmian recently opened a new office in Houston staffed by a dedicated team of sales and product engineers. Thanks to this new "business hub", Prysmian has further reinforced its commitment to both the domestic and the international markets managed by Houston based oil companies, EPC's and distributors. Recent successes include contracts to supply umbilicals for StatoilHydro and Anadarko Petroleum Corporation's Peregrino development off the coast of Brazil, as well as steel tube umbilicals for Petrobras' Plangas project.
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