Petrobras Could Cancel P-61 Platform Tender

RIO DE JANEIRO (Dow Jones Newswires), Dec. 19, 2008

Brazilian state-run energy giant Petroleo Brasileiro could cancel a tender for the P-61 oil platform after prices came in higher than expected, the local Estado news agency reported Friday.

According to the report, which cited unnamed sources close to the bids, the bids for the Tension Leg Platform, or TLP, rig were high enough to eliminate any cost savings from installing the integrated platform.

The lowest P-61 bid was from Modec Inc., which pegged construction costs at $1.72 billion, sources told Estado. Floatec posted a bid of $1.96 billion, while SBM's bid was $2.08 billion.

The P-61 platform would have been the first TLP installed in Brazil, destined for production at the Papa Terra field in the Campos Basin. Integrated TLP-type platforms, which are common in the Gulf of Mexico, includes drilling and production equipment that allows more efficient development of oil deposits.

The rig was seen as a key to trimming the costs of developing Brazil's promising subsalt oil reserves. Petrobras primarily uses production platforms such as floating production, storage and offloading ships, or FPSOs.

FPSOs typically are connected to production equipment anchored on the seabed via flexible lines. TLPs include such production equipment on the platform itself, which allows the rig to quickly shift position should a well become compromised.

That's important for the subsalt deposits, where wells drilled through the shifting salt layer could collapse because of the inconsistent geological nature. Oil found in Brazil's subsalt area lies at a water depth of more than 2,000 meters, as well as under an additional 5,000 meters of sand, rock and salt.

Petrobras also opened tenders for the P-63 FPSO platform, with the lowest bid coming from shipbuilder Quip at $1.65 billion. The company will likely convert an existing tanker hull in Asia, then install production components at its yard in Rio Grande do Sul.

The P-63 will have installed capacity to process 180,000 barrels of crude and 1 million cubic meters of natural gas a day. The FPSO is also destined for the Papa Terra field, operating in 1,200 meters of water.  

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