Technip Wins $2.1 Billion Petrobras Flexible-Pipe Contract in Brazil

Author: Spencer Ogden
Date posted08/Feb/2012
Author: Spencer Ogden

Technip SA, Europe’s second-largest oilfield-services provider, won a five-year order from Petroleo Brasileiro SA (PETR4) to supply $2.1 billion of flexible pipes for offshore oil projects.

The contract is for 1,400 kilometers (870 miles) of equipment to be made at two sites in Brazil using a “high level” of locally produced content, the Paris-based company said today in a statement.

The “good news for Technip” will raise visibility in the subsea division, Bertand Hodee, an analyst at Kepler Capital Markets, wrote in a note today. The shares rose as much as 2.9 percent and traded 1.7 percent higher at 74.87 euros at 10:05 a.m. Paris time.

Technip has said the market for flexible pipelines for offshore oil exploration and production is growing at a faster-than-expected pace. The company unveiled a plan a year ago to increase pipe-manufacturing in Brazil, where development of offshore hydrocarbon reserves is set to expand. The Angra dos Reis plant is located near Brazil’s pre-salt basins.

Petrobras is investing more than $200 billion in five years to tap Brazilian oil deposits below a layer of salt in the Atlantic Ocean. The pre-salt fields are two miles below the ocean and two to four miles further under the seabed.

Technip could also announce an order worth at least $400 million shortly for a Spar floating production platform for the Mad Dog South development in the Gulf of Mexico, Hodee said.

Chief Executive Officer Thierry Pilenko said in October that the company was in talks with BP Plc about working in the Mad Dog field and others in the Gulf of Mexico.

BP more than doubled the estimated oil resources at the Mad Dog field after drilling an appraisal well in the northern section of the deposit.