Brazil: SBM Offshore Receives Two LOIs for 20 Year FPSO Charter and Operation

SBM Offshore N.V. announced that one of its Affiliates and Queiroz Galvao Oleo e Gas S.A. (QGOG), have received two Letters Of Intent (LOI), one from Guara BV and one from BM-S-9 Consortium, established by the companies Petroleo Brasileiro S.A. – Petrobras (Operator, 45%), BG E&P Brasil LTDA (30%), and Repsol Sinopec Brasil S.A. (25%) for a twenty year charter and operation of an FPSO for the Guara Norte development in the pre-salt area, offshore Brazil.

The Guara Norte field is located in block BM-S-9 in the Santos basin at approximately 300 kilometres offshore and 2,300 metres water depth. The FPSO will include topside facilities to process 150,000 bpd of production fluids, associated gas treatment for 6,000,000 Sm3/d with compression and carbon dioxide removal, hydrogen sulphide removal, and a water injection facility for 180,000 bpd.

It is the intention that the unit will be owned and operated by a consortium in which SBM Offshore’s shareholding will not be less than 49.5% and not exceed 62.25%.

The project schedule foresees delivery of the FPSO in 35 months from LOI.

The non-discounted total of the revenues payable under this contract to the consortium, excluding escalation and bonus, amounts to approximately US$ 4.5 billion.

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Source: SBM Offshore, August 11, 2011; Image: Petrobras.