Tuesday, June 1, 2010

BG, Petrobras Order Oil-Producing Vessel for Tupi North East


By Eduard Gismatullin

June 1 (Bloomberg) -- BG Group Plc and Petroleo Brasileiro SA signed a letter of intent with SBM Offshore NV for a long- term charter of an oil-producing vessel at the Tupi North East field as part of a plan to expand output off Brazil.

The companies including Galp Energia SGPS SA plan to pay about $3.75 billion during the 20-year charter of the floating production, storage and offloading vessel, or FPSO, to pump oil and gas off Brazil’s coast, SBM said today in a statement. “The project schedule foresees delivery of the FPSO in 34 months from the letter,” it said.

BG, Petrobras and Galp are advancing plans to pump the first oil later this year or early in 2011 from the Tupi field, the biggest discovery in the Americas since Mexico’s Cantarell in 1976. In March, they confirmed high productivity from tests at the Tupi North East well off Brazil.

The Tupi North East FPSO will be able to process 150,000 barrels a day of fluids, SBM said. The unit will be owned and operated by affiliated companies of SBM along with Queiroz Galvao Oleo e Gas SA, Nippon Yusen KK and Itochu Corp.

Total revenue from the contract excludes a capital expenditure of at least $1 billion, Quirijn Mulder, an analyst at ING Groep NV in Amsterdam, wrote today in a report.

--With assistance of Maud van Gaal in Amsterdam. Editors: Randall Hackley, Jonas Bergman

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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