OSX, Mendes win $900 mln Petrobras oil platform deal
Shipbuilder OSX Brasil SA and construction group Mendes Junior won a contract worth more than $900 million from Brazil's state-led oil company Petrobras to install the oil processing equipment on two oil production ships, OSX said on Monday, Reuters reports.
OSX, controlled by Brazilian billionaire Eike Batista, and Mendes Junior will also construct some of the production modules to be installed on the ships, known as FPSOs, or floating production, storage and offloading vessels, OSX said in a securities filing.
The work will be done at OSX's shipyard, under construction at the Port of Acu north of Rio de Janeiro. OSX owns 49 percent of the contract and Mendes Junior 51 percent, OSX said.
"This is a very important step for us," OSX Chief Executive Carlos Bellot told Reuters on Monday. "It is our first contract with Petrobras and shows we can win important clients."
OSX has lost more than half its value since it began trading in early 2010. Investors have been increasingly concerned that the Rio de Janeiro-based company is overly dependent on Batista-controlled companies that are either in the start-up or pre-operational phases.
The principal source of OSX's future business has been OGX Petroleo e Gas SA, Brazil's No. 2 oil company after Petrobras by market value, which produced its first oil in January.
OSX, which has yet to build a ship on its own, has only one vessel, the OGX-1. OSX's leasing arm operates the vessel, which is leased to OGX.
OSX's shipyard is under construction at Acu, which is itself being built by Batista-controlled LLX Logistica SA. South Korean shipbuilder Hyundai owns 10 percent of OSX.
Both OGX and LLX have seen their operations delayed. OGX's first output was also below expectations, putting future oil platform orders in doubt. On July 30, Batista said he was ready to buy back up to 100 percent of the outstanding stock in LLX.
Under the contract with Petrobras, which is spending $237 billion to more than double output to more than 5 million barrels a day by 2020, OSX and Mendes Junior will install oil and gas production and processing modules into new tanker hulls.
The hulls, known as P-67 and P-70, are being built for Petrobras in Rio Grande do Sul in the country's far south, Bellot said. When complete, the production ships will be used in giant deepwater offshore fields south of Rio de Janeiro in an area known as "the subsalt", the statement said.
OGX and Mendes Junior have agreed to deliver the first platform in 49 months, in September 2016, and the second platform by August 2017, Bellot said.
Under the agreement, Rio de Janeiro-based OSX has the option of installing the equipment or to "integrate" production units for a third Petrobras FPSO, either the P-72 or P-73, the statement said.
Petrobras signed the contract with OSX through its Netherlands shipping subsidiary Tupi B.V., the statement said.
OSX shares fell 2.1 percent to 12.73 reais in Sao Paulo on Monday, their first decline in four days, before the contract was announced.
