WHAT DOES 2020

HOLD FOR THE

FPSO BRAZIL
MARKET?
WHAT DOES 2020 HOLD FOR THE FPSO BRAZIL MARKET? 2

INTRODUCTION
As the industry slowly recovers from
Operation Car Wash, adapt to new
National leadership and adjust to new
regulations, the FPSO community in
Brazil is now ready to welcome a new
era of growth and opportunities
in these deep-water fields.
2019 saw the introduction of new leadership With these investments and strategies in place,
in Brazil’s National Oil Company in the form of Brazil’s total production of oil is set to grow at an
Petrobras. According to GlobalData, Petrobras is average rate of 5% per year for the period between
expected to deploy six planned and nine announced 2020 and 2023. 4 In projected FPSO deployments,
FPSOs by 2025. GlobalData says that during the Brazil is expected to keep first place with 21 planned
2019 – 2025 period, the year 2023 will witness and announced FPSOs during the period 2019
the highest number of FPSOs deployed with four to 2025. 5
deployments. 1 Some of the key commitments
GlobalData expects Modec will follow Petrobras
include a huge $84-billion worth of investments
between 2019 and 2023, of which $68.8-billion will in the number of FPSO deployments, with four
be spent solely on exploration and production. 2 upcoming projects by 2025 with SBM Offshore
According to Petrobras, Campos and Santos basins occupying third position with three planned by 2025. 6
located offshore in Brazil have an estimated 6 billion
barrels reserve of pre salt oil. Additionally, Brazil’s
recent local content regulation implying easier and
lower requirements with reduction in fines for E&P
contracts will escalate the vessel deployment across
the country. 3

1
https://www.offshoreenergytoday.com/petrobras-brazil-top- 3
https://www.marketwatch.com/press-release/fpso-market-size- 5
https://www.offshoreenergytoday.com/petrobras-brazil-top-
fpso-deployment-charts/ current-and-future-industry-trends-2019-2025-2019-03-05 fpso-deployment-charts/
2
https://www.oedigital.com/news/462412-petrobras-a-new-era- 4
https://www.offshoreenergytoday.com/petrobras-to-spend-68- 6
Ibid;
begins 8b-on-ep-plans-to-order-7-new-fpsos/
 WHAT DOES 2020 HOLD FOR THE FPSO BRAZIL MARKET? 3

MERO PHASE 3 (LIBRA) PARQUE DAS BALEIAS INTEGRADO BACALHAU 1 (CARCARA)

SELECTED PROJECTS
FACILITY TYPE FACILITY TYPE FACILITY TYPE
FPSO newbuild FPSO conversion FPSO newbuild
OVERALL STATUS OVERALL STATUS OVERALL STATUS
Tendering Tendering Awarded (Pending FID)
OVERALL FORECAST AWARD OVERALL FORECAST AWARD OVERALL FORECAST AWARD
2020 2020 2020
OVERALL FORECAST FIRST OIL OVERALL FORECAST FIRST OIL OVERALL FORECAST FIRST OIL
2024 2023 2024
REGION REGION REGION
South America South America South America
COUNTRY COUNTRY COUNTRY
Brazil Brazil Brazil
OPERATOR OPERATOR OPERATOR
Petrobras Petrobras Equinor
OWNERSHIP STATUS OWNERSHIP STATUS OWNERSHIP STATUS
Leased Leased Owned

ITAPU (FLORIM) MERO PHASE 4 (LIBRA) SERGIPE AGUAS PROFUNDAS

FACILITY TYPE FACILITY TYPE FACILITY TYPE
FPSO conversion FPSO conversion FPSO conversion
OVERALL STATUS OVERALL STATUS OVERALL STATUS
Tendering Planned Planned
OVERALL FORECAST AWARD OVERALL FORECAST AWARD OVERALL FORECAST AWARD
2020 2021 2021
OVERALL FORECAST FIRST OIL OVERALL FORECAST FIRST OIL OVERALL FORECAST FIRST OIL
2024 2025 2025
REGION REGION REGION
South America South America South America
COUNTRY COUNTRY COUNTRY
Brazil Brazil Brazil
OPERATOR OPERATOR OPERATOR
Petrobras Petrobras Petrobras
OWNERSHIP STATUS OWNERSHIP STATUS OWNERSHIP STATUS
Leased Leased Leased
WHAT DOES 2020 HOLD FOR THE FPSO BRAZIL MARKET? 4

2019 UPDATES
Last year IHS Markit Brazil noted that the Brazilian market began 2019 free from
most of the uncertainties that concerned operators and suppliers in recent years.
The international offshore market was also in a growth trend, with enough room
for investments and activity to recover.

Traditional suppliers Odebrecht and SBM returned
to Petrobras’s approved vendor list in July and
October, respectively, owing to agreements with the
Brazilian Federal Prosecutor’s Office. Their return
gave Petrobras more options for several projects
in the pipeline. Several of the suppliers suspended
were highly skilled, and their presence now, when
investments are expected to return, are welcome.
With the election of Bolsonaro, the market
reached an end of great uncertainty regarding
the maintenance of recent regulatory changes
in the oil market. In particular, periodic bid rounds
and the adjustments in local content requirements
for older contracts and new bid rounds will remain.
WHAT DOES 2020 HOLD FOR THE FPSO BRAZIL MARKET? 5

2020
How then is 2020 shaping up for the FPSO Brazil market? The FPSO Brazil Congress
team spoke with Carlos Rocha, Director IHS Markit, to find out.

After new opportunities on the table in the
Brazilian upstream segment in 2018, the market
began to return with new contracts closed in 2019.
Four platforms started production in 2019, all of
them owned units contracted in 2010 and 2012,
during the Petrobras effort to stimulate the national
construction industry. In addition the third wellhead
platform of Peregrino, an Equinor operated field, was
installed. This fixed unit is projected to have first oil
by the end of this year.
Three new bidding rounds were scheduled
to take place in 2020: 17th concession round, 7th
PSA round and the rebid for the two blocks that did
not receive an offer in the TOR surplus bid. However,
the two bidding rounds with areas inside the presalt
polygon will be postponed (7th round and TOR
surplus). The Government may wait concerning
the possibility to change the pre salt law.

Currently under discussion is the possibility

GUEST CONTRIBUTOR to change the pre salt law to allow some
blocks in the pre salt polygon to be offered
Carlos Rocha in a concession contract, depending on the
Director, IHS Markit feasibility of each regime.
WHAT DOES 2020 HOLD FOR THE FPSO BRAZIL MARKET?
FPSO BIDS CLOSED IN 2019
Modec won the construction
of two more units, FPSO
Almirante Barroso (Buzios V)
and FPSO Anita Garibaldi
(Marlim 1)
Yinson, a new player in
the Brazilian market, won
the FPSO Ana Neri (Marlim 2).
The company was also
awarded the FPSO to be
installed in the Parque das
Baleias complex, and is
to close the contract with
Petrobras after a long
period of negotiation.
SBM closed a deal with
Petrobras to supply
a FPSO for the Mero project,
FPSO Sepetiba. The hull is
being constructed in Asia
using the Fast4ward model.
6
BW Offshore farmed in the
Maromba field from Petrobras
and may relocate its vessel,
FPSO Berge Helene, after
a refurbishment.
WHAT DOES 2020 HOLD FOR THE FPSO BRAZIL MARKET?
GLOBAL REACH
Companies are becoming busier with many orders
worldwide. Together, the two major companies,
Modec and SBM, won 10 platform construction
since 2017. Modec has four ongoing FPSOs for
Brazilian market, one for Mexico and another for
Australia. SBM has one unit for Brazil and signed
a long-term agreement with ExxonMobil for
platforms to Liza project in Guyana under a Build-
Operate-Transfer (BOT) contract with a short lease
term. And there are more to come: Modec closed
the deal with Equinor for the FEED of Carcará project
(now Bacalhau) in Brazil and may end negotiations
regarding platform construction this year. Also, there
are some open tenders in the market for Mero 3,
Itapu, Gato do Mato and Atlanta.
7
In the meantime the FPSO construction
market is reheating, new types of contracts are
already becoming a reality. Petrobras has already
announced that will contract a FPSO under an EPC
contract again and the possibility to contract one
of its projects under a BOT agreement, ExxonMobil
and SBM closed BOT contract for its platforms
to be deployed in Guyana, Modec and Equinor may
close a BOT contract for Carcará unit in Brazil,
among others.
To find out more about the market in Brazil
join us at the FPSO Brasil Congress 2020,
the largest FPSO-dedicated Congress the
Brazilian community has ever seen. We will
be bringing fresh eyes and new participants
ranging from project development and
execution through to operations, focusing
on new topics like contracting models, the
increasing emergence of EPCs, operational
readiness, digital FPSOs, and maximizing
local industry capacity.

ACCELERATING FPSO GROWTH 9-11 NOVEMBER 2020

IN THE BRAZILIAN SEAS RIO DE JANEIRO, BRAZIL
Local Industry Capacity | Project Execution &
Development | Operational Readiness & Excellence FPSOBRAZILCONGRESS.IQPC.SG