Brazil: Lupatech Signs 2 Contracts With Petrobras Worth Combined US$779

Lupatech S.A.,leading manufacturer of industrial valves in Mercosur, producer of equipment for the oil and gas sector and leader in Latin America in anti-corrosion systems for pipelines, announces it has signed two new contracts with Petroleo Brasileiro SA (Petrobras), with the approximated value of US$779 million (R$1.45 billion, as per the exchange rate of R$1.8654 per US dollar), to provide specialized offshore services related with well workover (intervention and recovery) and chartering of semi-submersible platforms.

For the Contracts execution it is planned the chartering of two semi-submersible platforms for the light workover operation in water depth of 1,100 meters to 2,500 meters, including services of risers completion, installation and de-installation of wet christmas trees, installation of subsea equipments using ROV’s (Remote Operated Vehicles), dissociation of hydrates and operations of coiled tubing, slick line and wireline in oil and gas wells, and also water injection wells.

The Contracts, in line with other services already provided by Lupatech, open new business opportunities for the Company to provide specialized technical services for the oil & gas sector, as well as its participation in the selective market of operations with service platforms of specialty services, adding pioneer technology with significant value added. The Contracts will use state-of-the-art technology solutions provided by Lupatech, emphasizing the application of fiberglass coating in pipes (liners).

The Contracts were originated in biddings won by a wholly owned subsidiary of the Company, Lupatech Equipamentos e Serviços para Petróleo Ltda. (formerly Gasoil Servicos Ltda.) on December 2nd, 2009 and are divided into lot A and lot B.

Lupatech will perform the services in concession areas of Petrobras in Brazilian waters (offshore), with a tenor of five (5) years from the beginning of operations, being possible to renew the Contracts for five (5) more years.

About lot A: the lot A comprehends the services mentioned above in water depth up to 1,100 meters. The maximum period to startup operations, after the signing of the contract, is 700 days, with estimated total revenue of US$376 million for a period of five years.

About lot B: the lot B comprehends the services mentioned above in water depth up to 2,500 meters. The maximum period to startup operations, after the signing of the contract, is 800 days, with estimated total revenue of US$403 million for a period of five years.

To perform the services of lot A and lot B Lupatech will invest about US$100 million in the acquisition of specialized equipments for handling completion risers, as well as in Drill Pipe Risers. The investments will be financed mainly by credit lines that the Company is negotiating with multilateral agencies and development banks.

Nestor Perini, Lupatech’ CEO, emphasized that investments made in recent years enabled Lupatech to compete in the market with highest degree of specialization. “It was thinking on the huge market potential Brazil represents that in recent years we have made investments of nearly R$1 billion in the diversification of products and services offered to the oil and gas market. The demands that will arise with the production in the Pre-Salt fields and simultaneously in shallow water creates additional opportunities and we will pursue them as a way to accelerate the process of creating value for Lupatech”.

Lupatech S.A. has three business segments: Energy Products, Flow Control and Metallurgy. The Energy Products Segment offers high value-added products and services for the Oil & Gas sector, including deepwater platform anchoring ropes, valves, oil wells completion tools, tube coating, natural gas compressors, sensors and services through the “Lupatech MNA”, “Lupatech CSL”, “Lupatech Tecval”, “Lupatech Oil Tools”, “Lupatech Esferomatic”, “Lupatech Oil & Gas Services”, “Lupatech Tubular Services”, “Lupatech Monitoring Systems”, “Aspro”, “Sinergás” and “Norpatagonica” brands. The Flow Control Segment heads the national rankings in the production and sale of industrial valves, primarily for the chemical, petrochemical, pharmaceutical, pulp and paper and construction industries, under the “Lupatech Valmicro”, “Lupatech Mipel”, “ValBol” and “Jefferson” brand names. The Metallurgy Segment is among the international leaders in the development and production of parts, complex parts and sub-assemblies, mainly for the global auto industry. It employs the precision casting and steel injection processes, techniques that it pioneered in Latin America. It also produces high-corrosion-resistant cast-alloy housings for industrial valves and pumps, chiefly for applications in the oil and gas industry under the “Microinox”, “Steelinject” and “Itasa” brands.

[mappress]

Source:Lupatech , June 7, 2010: