$455MM in Brazil Contracts Go to Oilfield Services Trio

$455MM in Brazil Contracts Go to Oilfield Services Trio
First oil from Bacalhau is projected for 2024. PHOTO SOURCE: Equinor

Equinor (NYSE: EQNR) reported Tuesday that Baker Hughes (NYSE: BKR), Halliburton (NYSE: HAL) and Schlumberger (NYSE: SLB) have won contracts for drilling and well services on the Bacalhau field offshore Brazil.

The Bacalhau operator holding a 40-percent working interest, Equinor announced the three contracts valued at $455 million on behalf of partners Exxon Mobil Corp. (NYSE: XOM) (40 percent) and Petrogal Brasil (OTCMKTS: GLPEY) (20 percent). The operator added the contracts have a firm period of four years and two two-year options.

“Brazil is a core area for Equinor, and Bacalhau is an important asset in the Brazilian pre-salt Santos area,” remarked Trond Bokn, Equinor’s acting senior vice president for project development. “Together with our partners we are currently maturing the project towards a final investment decision (FID) which is planned in 2021.”

According to Equinor, Baker Hughes’ contract scope covers drilling services and completion. Halliburton’s scope includes intervention service and liner hanger, and Schlumberger will provide wireline services, the operator noted. The firm noted the majority of services will be performed in Brazil, helping the three contracts to achieve an estimated average local content of 74 percent.

“The awards build further on our positive cooperation experience with the three selected suppliers in our projects worldwide,” commented Peggy Krantz-Underland, Equinor’s chief procurement officer. “They will be efficient to ensure safe and efficient drilling and well operations on the Bacalhau field.”

Since 2016 Equinor has served as operator of the Bacalhau field, which Petrobras (NYSE: PBR) discovered four years earlier. The field sits in 6,756 feet (2,050 meters) of water 115 miles (185 kilometers) offshore from Ilhabela, a city in Brazil’s Sao Paulo state. Equinor pointed out that first oil is planned for 2024, with a Phase 1 development capacity of 220,000 barrels per day.

Early this year, Schlumberger reported that it – along with Subsea 7 (OTCMKTS: SUBCY) – had won the contract for Bacalhau’s subsea production system (SPS) and subsea umbilicals, risers and flowlines (SURF). MODEC (TYO: 6269) will supply a newbuild floating production, storage and offloading vessel for the project.

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