Brazil's Petrobras could be set to open competing commercial bids from Japan's Modec and Belgium's Exmar next week for the Buzios-5 floating production, storage and offloading vessel after ruling a third contender out of the contest.
Well-informed sources told Upstream that Malaysia's MISC was disqualified on technical grounds, narrowing down the number of contestants fighting for the floater to just two.
Petrobras’ bidding committee concluded the technical assessment of the offers submitted by the trio on 7 June, resulting in the disqualification of MISC, sources said, adding commercial proposals will likely be opened early next week.
It is understood that Exmar teamed up with France’s Doris in Brazil to carry out engineering work for the FPSO project, and is eyeing a deal with China Merchant Heavy Industry for hull conversion in Asia.
Meanwhile, Modec is said to be working with two Chinese yards — Cosco Shipping Heavy Industry and Bomesc — for the tender, with Cosco designated to build the floater hull and Bomesc set to provide topsides modules.
It is the second time in quick succession that Modec and Exmar have gone head-to-head in a Petrobras tender.
Last year, the duo battled for the Sepia FPSO, with Modec winning the charter after proposing a dayrate of about $720,000, beating Exmar's offer of about $810,000.
Industry observers told Upstream that MISC’s disqualification did not come as a great surprise, as the company was widely perceived by the market as a dark horse in its first-ever bid for an FPSO project in Brazil.
Despite the setback, MISC is expected to participate in forthcoming Petrobras tenders for the charter of mid-sized FPSOs for Marlim-1, Marlim-2 and Parque das Baleias.
Even though Petrobras introduced more flexible rules regarding local content for Buzios-5 in an attempt to get lower dayrates and make competition more attractive, MISC ended up submitting a bid for a single alternative.
The first option featured a simpler project configuration with local content requirements set at 25% for the whole unit, while the second had local content varying from zero for hull fabrication to a mixture of percentages for topsides modules and integration work.
Sources said that Modec and Exmar presented offers for both options.
It is understood that Petrobras will first open commercial proposals in the 25% local content category, and will only reveal bids in the second option if prices come in higher than expected.
Petrobras is looking for a floater with capacity to produce 180,000 barrels per day of oil and 6 million cubic metres per day of natural gas, with Buzios-5 set to enter operation in the second half of 2021.
Petrobras, which operates Buzios with a 100% stake, started output from the Santos basin development last month via the P-74 FPSO.
Two more units — P-75 and P-76 — are due to come on stream later this year and a fourth, P-77, in 2019.