Modec wins Petrobras contract

RIO DE JANEIRO — The Japanese firm Modec said Tuesday that it won a contract with Petrobras to build a floating production and storage facility that will drill for oil off the coast of Brazil in the nation's giant Tupi field.

Mitsui Ocean Development & Engineering Co., or Modec, a Tokyo-based provider of floating production systems said it will deliver the vessel at the end of 2010 as part of a 15-year contract. The company did not say how much the deal was worth, and officials from Brazil's state-run Petroleo Brasileiro SA, or Petrobras, did not comment.

Modec said it plans to convert a used crude tanker ship into a production and storage facility capable of processing 100,000 barrels of oil per day.

Petrobras discovered the ultra-deep Tupi field last year, saying it could contain 8 billion barrels of recoverable light crude, and since then several other deep-water finds raise the possibility of recovering more than 55 billion barrels of oil, analysts said. The company has refused to forecast how big the finds might be.

The Tupi field lies under 2,140 meters (7,020 feet) of water, more than 3,000 meters (almost 10,000 feet) of sand and rocks, and a 2,000-meter (6,600-foot) layer of salt in what is known as the Santos basin.

In May, President Luiz Inacio Lula da Silva said Petrobras will spend US$5 billion to build 146 ships and plans to hire 40 deep-water drilling rigs and platforms to develop its deep-water oil finds. Analysts have said the additional equipment could cost an extra US$15 billion.

The contract represents a significant milestone for Modec in its efforts to partner with Petrobras "to start to develop the vast pre-salt reserves of the Santos Basin," said Rick Hall, president of Modec International Inc.

Brazil was the world's 13th-largest oil producer in 2006, according to the most recent data available from the U.S. Department of Energy. But if the pre-salt reservoirs are confirmed, analysts say they could transform the nation into a major oil exporter.

Petrobras' American depository shares ended up 0.1 percent Tuesday afternoon in New York, at US$51.54.

Back To Top