FPSO Contract Suspension Could Cost Petrobas US$15-bln

Posted by George Backwell
Tuesday, July 08, 2014
FPSO: File photo

Profit at Petrobras, Brazil's state-led oil company, could be reduced by $15 billion between 2014 and 2018 if it had to suspend oil platform contracts with Holland's SBM Offshore NV, the company said in a securities filing.

The potential reduction in profit is based on an estimate of the amount of lost oil and natural gas output and additional spending needed if Petrobras had to stop using the floating oil production platforms leased from SBM, it said in the Saturday filing.

The estimate was made in response to a request by Brazil's Office of the Comptroller General (CGU), Petrobras said in the filing. The CGU is the Brazilian federal-government agency responsible for the protection of public property.

SBM is the subject of investigations in Brazil, the Netherlands and the United States over the alleged payment of $250 million in bribes in Africa and South America, with $139 million of that allegedly paid in Brazil.

The Comptroller General's office opened an investigation into SBM's contracts with Petrobras in April.

Petrobras, formally known as Petroleo Brasileiro SA , added that the losses are hypothetical and that the Comptroller General has not recommended that contracts with SBM be suspended.

SBM, based in Schiedam, the Netherlands, is the world's largest leaser of floating production, storage and offloading, or FPSO, vessels. FPSOs are used to produce oil in deepwater offshore fields.

The company has 15 leased FPSO and related vessels, with six operating in Brazil, according to its website.

(By Jeb Blount)


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