Rendering of the P-57 FPSO

RIO DE JANEIRO (Dow Jones)–Brazilian state-run energy giant Petroleo Brasileiro (PBR), or Petrobras, is expected to receive up to $7 billion worth of bids to complete eight offshore oil platforms in a tender this week, local business daily Valor Economico reported Monday.

The bids will cover modules and integration for eight floating production, storage and offloading vessels that will be installed at pre-salt fields in the Santos Basin, where a cluster of oil discoveries was made more than four miles under the sea. Brazil has said the deposits could contain 50 billion barrels of oil.

Eight hulls are currently under construction at a shipyard in Rio Grande do Sul state, at a cost of about $3.46 billion. The next contract, valued at between $5 billion and $7 billion, will install and integrate production modules on the hulls, Valor said. The eight FPSOs are clones, numbered P-66 to P-73, designed to cut costs and speed construction. The first platform, the P-66 FPSO, is expected to be completed by November 2013.

The bids are expected to be turned in Tuesday, Valor said.

The FPSOs will be installed at Petrobras-operated fields in the BM-S-9 and BM-S-11 blocks in the Santos Basin. BG Group (BG.LN), Galp Energia (GALP.LB) and Repsol YPF (REP) are also partners in the fields.

Newspaper website: www.valor.com.br

-By Jeff Fick, Dow Jones Newswires

Husky SeaRose FPSO

Harland and Wolff Heavy Industries Ltd (H&W) has been awarded the contract for the drydocking and service of the SeaRose Floating Production Storage and Offloading (FPSO) vessel.

The 272-metre long, 46-metre wide SeaRose FPSO is located at the White Rose oil field, 350km off the Newfoundland coast, operated by Husky Oil.

H&W will dedicate its smaller 335m x 50m Belfast Repair Dock and 432m Repair Quay to the project during May and June 2012.   This intense period of activity will be preceded by a dedicated team planning and co-ordinating all activities, starting immediately.   The integrated project team will be made up of owner and H&W personnel along with key contractors and vendors.

”H&W, along with our key contractors, are pleased to have secured the SeaRose FPSO project and to demonstrate the capabilities of the UK Oil & Gas supply chain,” said H&W Project Manager James Lappin.  “This is an important opportunity, not only for H&W but for Northern Ireland, to extend a welcome to our Canadian visitors and demonstrate our world class facilities.”

“We are proud that they have put their trust in us,” H&W Chief Executive Officer Robert J Cooper said.   “All levels of H&W are committed to ensuring this important project is completed safely and successfully.”

Harland and Wolff was founded over 150 years ago in Belfast, Northern Ireland and has built some of the world’s most famous ships, including three from the White Star Line: the Olympic, Titanic, and the Britannic.  In recent years however, their business, like many others in the shipbuilding world, has evolved to include renewable energy projects such as offshore wind farm and tidal turbine construction.

The contracts Rolls-Royce will supply Petrobras with thirty-two RB211 gas turbine power generation packages, including waste-heat recovery units, to meet the power generation requirements of eight separate Floating Production Storage and Offloading (FPSO) vessels. The FPSO’s, used for the processing of hydrocarbons and storage of oil, will operate in the petroleum rich Lula (formerly Tupi) and Guara oilfields, located in the pre-salt area of the Santos Basin off the coast of Brazil.

The new gas turbine power generation packages will be delivered in groups of four, with the first units scheduled for delivery in the first quarter of 2013. Four gas turbine generating sets will be installed on each of the eight FPSO’s.  Rolls-Royce will also provide Petrobras with long-term services, technical support and training.

“We are delighted that Petrobras has again selected Rolls-Royce power generation technology to help meet its aggressive offshore oil and gas production objectives,” said Andrew Heath, President of Rolls-Royce.  “Rolls-Royce has a strong record of equipment and services supply to Brazil’s energy sector and we are committed to supporting all our customers in the country with reliable, technology solutions and a strong localised presence.”

In February Rolls-Royce announced plans for the construction of a new $100 million-plus purpose-built gas turbine assembly and test facility in Santa Cruz in the state of Rio de Janeiro which is expected to become operational in the first quarter of 2013. Equipment from these contract awards, scheduled for installation in the Lula (Tupi) and Guara oilfields, will be among the first units to be assembled and tested at the new Rolls-Royce facility.

The latest contract award increases the number of Rolls-Royce RB211-powered industrial gas turbine units installed in Brazil over the last 10 years to sixty-two. The combined total amount of energy generated by these units is equivalent to 1.8 gigawatts of electric power, enough to supply energy to over seven million people.

We thought this weeks ship photo was pretty cool.  It shows the newly constructed USAN Floating Production Storage and Offloading unit (FPSO) being positioned at the Usan field offshore Nigeria.

Built by Hyundai Heavy Industries, the FPSO Usan is one of the largest units of its kind.  In April, the FPSO left on its 3-month journey under tow from the HHI shipyard Ulsan, South Korea, around the Horn of Africa, and eventually connecting to the tug Fairmount Glacier for final positioning and installation offshore Nigeria.  Nine weeks of continuous heading control later, the unit was successfully installed.

The Usan FPSO has the capacity to refine 160,000 barrels of oil and 5 million cubic meters of gas per day and can store 2 million barrels of oil. The facility is 320m long, 61m wide, 32m high and weighs 116,000 tons.

An illustration of the newbuild Dockwise Vanguard courtesy Dockwise

Life is good when you can tranport over 100,000 metric tons.

Heavy lift operator Dockwise today announced that its new-build “Type-0″ super vessel, Dockwise Vanguard, has been booked for its second project, transporting an FPSO from Korea to Norway.  Directly following the transportation of the Jack & St. Malo platform to the Gulf of Mexico in 2013, the Dockwise Vanguard will return to its roots at Hyundai Heavy Industries in South Korea to pick up the Goliat FPSO and transport it to the northern coast of Norway.

“The Vanguard is already adding unique capacity and new flexibility to the Dockwise fleet,” said Dockwise CEO, Andre Goedee.  “This is of particular value for clients with the most challenging assignments. In case of today’s announcement we created an opportunity for the client to optimize the project execution schedule with a flexible and robust solution for the transportation of the Goliat FPSO from Korea to Europe. We consider this another strong endorsement of Dockwise’s decision to invest in a major new-build asset ahead of the surge in demand for Transport & Installation projects in the next decade.”

The Dockwise Vanguard is expected to be delivered in late 2012 from Hyundai Heavy Industries.

The Goliat FPSO will be operated by Eni for oil production of the Goliat field located offshore Northern Norway in sub-arctic conditions. The platform is designed as a fully integrated and enclosed winterized floating production platform (FPSO).

As part of the first contract, Keppel Shipyard Ltd. will convert a very large crude carrier into a floating production, storage and offloading, or FPSO, vessel. The contract has been placed by Single Buoy Moorings Inc.

The second contract placed by Rubicon Offshore International Pte. Ltd. involves constructing a module for an FPSO vessel.

-By Chun Han Wong, Dow Jones Newswires

COPENHAGEN (Dow Jones)–Danish oil and gas company Maersk Oil stands to lose production of up to 5.3 million barrels of oil equivalent due to extensive repair works on a floating production unit damaged in a storm last winter in the U.K. North Sea, reports Danish business daily Borsen Monday.

Maersk Oil’s Gryphon floating production, storage and offloading unit, currently under repair in Rotterdam, services a number of the company’s offshore U.K. oilfields.

The platform tore loose during a heavy storm, suffered severe damage, and will be out of production for up to a year while it’s being repaired, writes Borsen.

Maersk Oil has a normal daily production in the U.K. North Sea of about 50,000 barrels of oil equivalent, of which about a third hinges on the services of Gryphon.

Maersk Oil, a unit of Danish industrial conglomerate A.P. Moller-Maersk A/S (MAERSK-B.KO), doesn’t expect the FPSO will return to full production before the Spring of 2012, Maersk Oil U.K. managing director Martin Rune Pedersen now told Borsen.

At current prices, the resulting production fall could equal a revenue of about DKK3.2 billion, or a net profit of roughly DKK350 million, Sydbank analyst Jacob Pedersen said to Borsen.

Newspaper website: http://www.borsen.dk

-By Flemming Emil Hansen, Dow Jones Newswires

AMSTERDAM (Dow Jones)–SBM Offshore NV (SBMO.AE) said Thursday that contracts for the twenty year charter and operation of FPSO Cidade de Paraty, offshore Brazil, have been executed with the BM-S-11 Consortium and added that a contract to supply BP plc (BP) with an internal turret mooring system was confirmed.

MAIN FACTS:

- The BM-S-11 consortium is 65% owned by Petrobras SA (PESA.BA), 25% by BG Group and 10% by GALP Energia.

- SBM Offshore together with Queiroz Galvão Óleo e Gás S.A had been awarded a Letter of Intent on 28 May 2010 for this work.

- The unit will be owned and operated by a Joint Venture of companies comprising of SBM Offshore (50.5%), QGOG (20%), Nippon Yusen Kabushiki Kaisha (9101.TO) (17.5%) and Itochu Corporation (8001.TO) (12%).

- The Lula Nordeste field is located in block BM-S-11 in the Santos basin at approximately 265 kilometres offshore and 2,100 metres water depth. The FPSO will include topside facilities to process 150,000 bpd of production fluids, associated gas treatment for 5,000,000 Sm3/d with compression and carbon dioxide removal and a water injection facility for 150,000 bpd.

- SBM Offshore together with its JV partners, QGOG, NYK and ITOCHU, secured a Limited Recourse Project Loan for $1 Billion to finance the construction of the FPSO Cidade de Paraty.

- The loan will be repaid over a 10 year period starting at First Oil and benefit from a competitive pricing package arranged on a Club Deal basis with 12 International Commercial Banks.

- SBM Offshore has also received a letter from BP plc’s (BP) Exploration Operating Company Ltd confirming full project sanction for the supply of an internal turret mooring system for the Quad 204 FPSO project.

- The BP contract consists of engineering, procurement and construction of an internal turret mooring system for the FPSO for the Quad 204 development.

- The BP project schedule foresees delivery of the turret in several sections to facilitate the FPSO construction sequence during the year 2013.

- By Amsterdam Bureau, Dow Jones Newswires

The company has a long-range focus on deep-water oil and gas projects as interest in such developments are gaining momentum globally, particularly in the Atlantic basin, due to more easily accessible deposits being depleted and high oil prices making this type of frontier exploration more feasible.

“If you’re looking at the next 10 years, there’s going to be a lot of deep water projects there in the Gulf of Mexico, North Sea, West Africa and South America,” Ezra Group Managing Director Lionel Lee told Dow Jones Newswires Tuesday.

Ezra, which operates under the brand name EMAS, specializes in providingoffshore oil and gas industry services.

Its Lewek EMAS floating production, storage and offloading vessel, or FPSO, will leave Singapore Friday or Saturday to the shallow-water Chim Sao oil field in Block 12W, about 350 kilometers offshore southern Vietnam, Lee said.

The unit, with a production capacity of up to 50,000 barrels a day and capable of storing 680,000 barrels of crude, has been chartered to Chim Sao field operator Premier Oil Vietnam Offshore B.V. for up to 12 years.

Premier Oil PLC (PMO.LN), which holds a 53.1% stake in the project, plans to start crude output from Chim Sao in August. Other partners are Santos Ltd. (STO.AU) and PetroVietnam, holding 31.875% and 15% interests, respectively.

“We are in the Gulf of Mexico to get the experience (in deep water projects),” Lee said.

Recently, the company, through its newly acquired subsidiary–Norway’s Aker Marine Contractors–delivered and installed approximately 40 kilometers of steel piping for Royal Dutch Shell PLC’s (RDSA.LN) Popeye Project in the deep-water Green Canyon block 116 in the Gulf of Mexico.

Last October, Ezra acquired AMC–a unit of Aker Solutions ASA (AKSO.OS)–for $250 million to help reinforce its deep-water expertise and complement its traditional strength in pipe-laying and heavy-lift equipment.

“There are no plans to acquire more companies” after AMC, Lee said. “The company will grow organically and we will use existing overseas offices [to support] other divisions.”

“AMC is now fully integrated…and we’ve recruited 300 people for the Houston and Oslo offices.”

Further out, the company plans to set its sights on a relatively little-developed deep-water area–the Asia-Pacific region.

There is already some activity–for example last month China’s Cnooc Ltd. (CEO) said it will drill four to six deep-water wells in the South China Sea this year and accelerate deep-water exploration over the next four years.

In Indonesia, Chevron Corp. (CVX) is developing the Gendalo-Gehem natural gas project in the Makassar Strait offshore East Kalimantan, in water depths of approximately 2,000 meters. The project is now in the front-end engineering-and-design stage.

Ezra’s share price has fallen 21.16% since the start of the year, compared with a 5.71% fall by Singapore’s STI.

-By Cheang Chee Yew, Dow Jones Newswires

TOKYO (Dow Jones)–Japanese shipping company NYK Line expects a surge in liquefied natural gas demand from Japan and worldwide because of rising fears about nuclear power, and is determined to grab as much of the new LNG shipping business as possible.

NYK Line, as Nippon Yusen KK (9101.TO) is known, is one of world’s top two LNG carrier companies. It laid out a modest plan in late March to invest Y260 billion in LNG carriers and FPSO–floating production, storage and offloading vessels–in the six years from April 2011, raising the number of its LNG carriers to 35 from 30 currently.

But Hitoshi Nagasawa, an NYK managing officer responsible for its Bulk and Energy Division, said those numbers could be adjusted if the shift to LNG looks set to continue over the longer term.

If the trend to reduce dependence on nuclear power continues, “there would be demand for 70-80 LNG vessels worldwide over the next decade,” Nagasawa said in an interview with Dow Jones Newswires.

“We’ve been collecting information [preparing] to win as much business as possible,” he said.

The March 11 earthquake and tsunami knocked out 14 reactors and several thermal power plants in northeastern Japan, causing serious power shortages and a search for fossil fuels, mostly LNG, to make up for the lost power capacity.

Then, as the severity of the partial nuclear meltdown at the Fukushima Daiichi site became apparent, more unaffected utilities chose not to restart reactors that were undergoing regular maintenance at the time of accident, so as not to alarm local communities. Reactors that have since been shut for scheduled maintenance face similar obstacles. As a result, 37 of Japan’s 54 reactors are now offline.

Energy industry executives have said Japan’s LNG demand has risen above 80 million metric tons this year. But Nagasawa said it may reach 100 million tons, given the continued public concern.

In the financial year that began April 1, Japan’s LNG demand will rise by roughly 10 million tons, the Institute of Energy Economics of Japan said in a recent report.

On Friday, Kansai Electric Power Co. (9503.TO) said it will call on large customers to cut power use by 15% from last year’s levels during peak periods this summer to avoid power outages, as it has been unable to restart several reactors undergoing regular maintenance.

Japan’s second-largest power utility by capacity said it will need to use additional fossil fuels equivalent to 1.6 million tons of LNG in the June-September period.

Tokyo Electric Power Co. (9501.TO), the operator of the stricken Fukushima Daiichi nuclear power complex, has bought 3 million tons of additional LNG for the use in summer months.

Chubu Electric Power Co. (9502.TO), which shut its Hamaoka nuclear power plant after government requests following the Fukushima disaster, estimates it will have to use 3 million tons more LNG than originally planned this fiscal year.

Nagasawa expects this extra demand to continue for two years. In the long term, there is also a good chance that Japan closes old reactors, cutting the country’s total nuclear power capacity to around half of the current level, he said.

Nevertheless, he doesn’t expect LNG supply shortages, thanks to ample production capacity in Qatar.

In the business plan released in March, NYK said it aims to keep its oiltanker fleet at almost the same size, around 105 vessels.

Nagasawa said oil tankers are no longer lucrative due to Japan’s falling oil demand and intensifying competition, and the company will invest more in FPSO vessels, as oil and gas production moves to deep-sea beds.

-By Mari Iwata, Dow Jones Newswires