The development of the Mero field, part of the Libra pre-salt complex offshore Brazil, has opened a range of opportunities for equipment and services in the oil and gas sector in the South American country. A range of equipment from wet x-mas trees, pipes to floating production, storage and offloading units (FPSO) and drillships are being leased or acquired for the Mero 1 and 2 projects, and this is only a sample of things to come as other major pre-salt projects are also beginning to increase their tempo of development.
The ultra-deepwater Mero field in the northwestern sector of the Libra block, is located about 180 kilometers south of Rio de Janeiro, in the Santos Basin. The field holds approximately 3.3 billion boe in high-quality - 29º API - carbonate reservoirs. The importance of these new pre-salt developments to the industry is huge as they are directly responsible for heating up a recently stagnant market. The fact that Petrobras is not the sole operator must also be highlighted as it has opened the door for other major and super-major IOCs to invest in the development of the pre-salt and promises to speed up development in a way that would be impossible with the national oil company as the sole operator.
Subsea systems
In 2018 Aker Solutions was awarded by Petrobras and the Libra consortium a contract to supply the Mero 1 subsea system, the first field to produce in the production sharing scheme in the Libra area. This first subsea equipment contract already heated up the offshore supply vessel (OSV) market as the installation process for 12 deepwater x-mas trees is very OSV intensive and requires specialized vessels. In late January, Petrobras started the bidding process for x-mas trees for the Mero 2 field. With this, Petrobras triggered a major competition between TechnipFMC, Aker Solutions and OneSubsea. The three companies are locked in a battle to secure the supply for Petrobras of 11 highly specialized x-mas trees to operate at the Mero 2 play and connect to the Mero 2 FPSO.
In early February, TechnipFMC was awarded a large engineering, procurement, construction and installation contract by Petrobras for the Mero 1 pre-salt field. TechnipFMC’s contract covers engineering, procurement, construction of all rigid lines, as well as the installation and pre-commissioning of all the infield riser and flowline system for interconnecting 13 wells (six production and seven water alternate gas injection) to the FPSO.
This contract quickly led TechnipFMC to award a contract to Vallourec for the supply of seamless steel rigid line pipes for Mero 1. This contract covers the supply of around 12,000 tons of pipe with outside diameters 8” and 10”. Pipe supply will start at the end of 2019. The pipes will be used in the fabrication of the riser and flowline systems for interconnecting 13 wells (6 production wells and 7 water alternate gas injection wells) at Mero 1.
Alexandre Lyra, Senior Vice President South America, Vallourec, said, “We understand the market has reached an inflexion point where the demand for rigid risers will increase. At such depths and distance from the shore, rigid line pipe offers the most sustainable solution for the lifetime of such projects.”
Drillships
Transocean has secured Petrobras contracts for two Ocean Rig ultra-deepwater drillships, the Ocean Rig Corcovado and Ocean Rig Mykonos. The Ocean Rig Corcovado has been awarded a 629-day contract, while Mykonos has secured 550-day contract. The two Samsung-built drillers are forecast to start operation in Brazil in November 2019 and the contracts include extension options for 680 days and 815 days, respectively. Transocean explained that the units to be chartered will operate with managed pressure drilling (MPD), the Mykonos at a daily rate of $235,000, and Corcovado, at around $215,000.
Transocean now has three rigs operating in Brazil and with their partnership with Petrobras and other IOCs developing deep and ultra-deepwater plays in the country, it is quite possible that this number will increase in near future. Transocean acquired the rigs as part of the acquisition of the rival Ocean Rig in 2018 and only three months after the acquisition, Ocean Rig managed to sign these major contracts with Petrobras.
FPSOs
The Brazilian Shipyard EBR won the Modec tender and will manufacture and assemble modules for the topside water treatment system of the FPSO Guanabara MV31, chartered by the Libra consortium. The work will be carried out at the shipyard, in the city of São José do Norte, in Rio Grande do Sul, and should begin in the first quarter of 2019 with a delivery schedule of twelve months. This contract is a lifesaver for the EBR shipyard which was struggling to stay in business and is also a light at the end of the tunnel for other local shipyards in dire need of new construction contracts. The FPSO Guanabara MV31 is the first definitive platform that will be installed in the field of Mero 1 field. The bid for the Mero-2 FPSO has three companies in the dispute and industry sources believe that Brazilian shipyards may be contracted for the full construction. SBM Offshore, Modec and MISC are leading the competition.