Petrobras cancels FPSO tender after bid deemed too expensive

Brazil’s state-owned oil and gas giant Petrobras has cancelled a tender for chartering an FPSO for the Barracuda-Caratinga revitalization project.

Initially, Petrobras started the contracting process for the FPSO back in the summer of 2023 but it suffered several setbacks and postponements due to a lack of sufficient interest from floater owners. The company required a unit capable of producing 100,000 bpd of oil and 6 mscfd.

One of the main reasons behind Petrobras’ issues and the lack of participation from companies in FPSO tenders was the Brazilian firm’s tendency to use the lease-and-operate format which made the usual participants in these tenders look elsewhere.

However, one floater specialist did eventually submit an offer in the autumn of 2024. India’s Shapoorji Pallonji Energy was the only company to submit a proposal for the FPSO, marking the first time an Indian company participated in a Petrobras bidding competition.

Shapoorji’s offer, even though it was the only one, was considered too high by Petrobras. The Indian firm requested a daily rate of submitted an offer of a daily rate of $1.636m.

As a result, the company revoked the tender and stated that it had done so “based on uncontrollable supervenient fact, which alters the economic viability of the project in the current contract model”.

The Brazilian giant is now preparing a new tender by year-end which will be done under the build-operate-transfer model which should, in theory, attract more companies.

Under this model, the builder of the FPSO will operate the unit for several years after which the ownership will be taken over by Petrobras. This model will also be used for the two Sergipe-Alagoas FPSOs and the Albacora field revitalization project.

According to Petrobras’ 2025-29 business plan, the FPSO for the Barracuda-Caratinga revitalization project should start operations in 2029.