SLB OneSubsea awarded major contract by Petrobras for two ultra-deepwater projects offshore Brazil

Rhea-AI Summary

SLB (NYSE: SLB) has secured a major contract from Petrobras (NYSE: PBR) for its OneSubsea™ joint venture to provide standardized, pre-salt subsea production systems for two oil fields in Brazil's Santos Basin. The contract covers the second development phase of the Atapu and Sepia fields, including the supply of vertical trees, subsea distribution units, control systems, and pipeline systems. Much of the technology will be produced and serviced locally at SLB OneSubsea's facilities in Brazil. This project will support the addition of two new FPSO platforms, P-84 (Atapu) and P-85 (Sepia), each with a daily production capacity of 225,000 barrels of oil and processing of 10 million cubic meters of gas.

Positive

• Major contract award from Petrobras for subsea production systems
• Expansion of operations in the strategically important Santos Basin
• Local production and servicing of equipment, enhancing Brazilian content
• Support for two new FPSO platforms with significant production capacity
• Strengthening of partnership with Petrobras in a key market

Negative

• None.

Insights

Financial Analyst

The contract award to SLB OneSubsea by Petrobras is a significant development with positive implications for SLB's financial outlook. This major contract for subsea production systems in Brazil's Santos Basin represents a substantial revenue opportunity for SLB, although the exact value hasn't been disclosed.

Key points to consider:

• The contract covers two ultra-deepwater projects, indicating a large scope and potential for long-term revenue streams.
• SLB's local production capabilities in Brazil position it favorably for cost-effective execution and potential future contracts.
• The project aligns with Brazil's strategic focus on developing pre-salt reserves, suggesting potential for further opportunities in this market.

While this contract is certainly positive for SLB, investors should also consider the broader context of the oil and gas industry, including oil price trends and global demand forecasts. The long-term nature of such projects also means that the financial impact will be spread over several years, rather than providing an immediate boost to earnings.

Oil & Gas Industry Expert

This contract award underscores the continued importance of Brazil's pre-salt reserves in the global oil and gas landscape. The Santos Basin, where these projects are located, is known for its prolific production potential, making it a key focus area for major oil companies.

Several aspects of this development are noteworthy:

• The use of standardized, pre-salt subsea production systems indicates a drive towards efficiency and cost-effectiveness in deep-water operations.
• The addition of two new FPSO platforms, each with a capacity of 225,000 barrels of oil per day, represents a significant production boost for Petrobras.
• The gas processing capacity of 10 million cubic meters per day for each FPSO highlights the substantial associated gas resources in these fields.

This project aligns with the broader trend of increased investment in offshore and deep-water projects globally, as oil prices have remained relatively stable. It also reflects the ongoing importance of conventional oil resources, even as the energy transition gains momentum.

Technology and Innovation Analyst

The contract awarded to SLB OneSubsea highlights the critical role of advanced subsea technology in unlocking challenging deepwater resources. This project showcases several key technological aspects:

• The use of pre-salt vertical trees, which are specialized equipment designed to handle the unique challenges of pre-salt formations, including high pressures and corrosive environments.
• Advanced subsea control systems that enable efficient and safe operation of deepwater production facilities.
• Integrated subsea production systems that combine various components to optimize production and reduce overall project costs.

SLB's ability to produce much of this technology locally in Brazil demonstrates the company's commitment to technology transfer and localization. This approach not only supports the development of a local high-tech industry but also potentially reduces project costs and timelines.

Looking forward, the continued development of such advanced subsea technologies will be important for accessing increasingly challenging offshore resources. Investors should watch for further innovations in this space, as they could significantly impact the economics of deepwater oil and gas production.

Subsea production systems will help unlock access to pre-salt reserves in the prolific Santos Basin

HOUSTON--(BUSINESS WIRE)-- Regulatory News:

SLB OneSubsea manufacturing facility in Curitiba, Brazil. (Photo: Business Wire)

SLB (NYSE: SLB) has announced a major contract award by Petrobras (NYSE: PBR), following a competitive tender, to its OneSubsea™ joint venture for their standardized, pre-salt subsea production systems and related services. The scope covers the further development of two oil fields in the strategically important Santos Basin.

As part of the second development of the Atapu and Sepia fields, SLB OneSubsea will provide the Petrobras-standard configured, pre-salt vertical trees, subsea distribution units, subsea control systems and pipeline systems, along with related installation, commissioning and life-of-field services. Much of the technology and equipment to be deployed, including the vertical trees and subsea control systems, will be produced and serviced locally at SLB OneSubsea’s facilities in Brazil.

“This award deepens our valued partnership with Petrobras, and we are proud to be supporting the development of such important assets to Brazil,” said Mads Hjelmeland, chief executive officer of SLB OneSubsea. “Leveraging our proven, locally developed technology platform facilitates on-time delivery and maximizes local content from our Brazilian manufacturing and service facilities. Brazil is a key market for us, and our continued in-country investments are key to support the growth we envisage for the region.”

These projects add to Petrobras’ material pre-salt investments and will enable the addition of two new floating production, storage and offloading (FPSO) platforms, P-84 (Atapu) and P-85 (Sepia). They will each have a daily production capacity of 225,000 barrels of oil per day and processing of 10 million cubic meters of gas per day.

About SLB

SLB (NYSE: SLB) is a global technology company that drives energy innovation for a balanced planet. With a global footprint in more than 100 countries and employees representing almost twice as many nationalities, we work each day on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition. Find out more at slb.com.

About SLB OneSubsea

SLB OneSubsea is driving the new subsea era that leverages digital and technology innovation to optimize our customers’ oil and gas production, decarbonize subsea operations, and unlock the large potential of subsea solutions to accelerate the energy transition. SLB OneSubsea is a joint venture backed by SLB, Aker Solutions, and Subsea7 headquartered in Oslo and Houston, with 10,000 employees across the world. Find out more at onesubsea.com.

Cautionary Statement Regarding Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of the U.S. federal securities laws — that is, statements about the future, not about past events. Such statements often contain words such as “expect,” “may,” “can,” “estimate,” “intend,” “anticipate,” “will,” “potential,” “projected" and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as forecasts or expectations regarding the deployment of, or anticipated benefits of, SLB’s new technologies and partnerships; statements about goals, plans and projections with respect to sustainability and environmental matters; forecasts or expectations regarding energy transition and global climate change; and improvements in operating procedures and technology. These statements are subject to risks and uncertainties, including, but not limited to, the inability to achieve net-negative carbon emissions goals; the inability to recognize intended benefits of SLB’s strategies, initiatives or partnerships; legislative and regulatory initiatives addressing environmental concerns, including initiatives addressing the impact of global climate change; the timing or receipt of regulatory approvals and permits; and other risks and uncertainties detailed in SLB’s most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the U.S. Securities and Exchange Commission. If one or more of these or other risks or uncertainties materialize (or the consequences of such a development changes), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements. The forward-looking statements speak only as of the date of this press release, and SLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801283987/en/

Media

Moira Duff – Director of External Communications

SLB

Tel: +1 (713) 375-3407

media@slb.com



Investors

James R. McDonald – SVP of Investor Relations & Industry Affairs

Joy V. Domingo – Director of Investor Relations

SLB

Tel: +1 (713) 375-3535

investor-relations@slb.com

Source: SLB

FAQ

What is the significance of SLB's contract with Petrobras for the Santos Basin projects?

The contract is significant as it involves providing subsea production systems for two major oil fields in the Santos Basin, supporting Petrobras' pre-salt investments and the addition of two new FPSO platforms with substantial production capacities.

What equipment will SLB OneSubsea provide for the Atapu and Sepia fields?

SLB OneSubsea will provide Petrobras-standard configured, pre-salt vertical trees, subsea distribution units, subsea control systems, pipeline systems, and related installation, commissioning, and life-of-field services.

How does this contract impact SLB's presence in Brazil?

This contract deepens SLB's partnership with Petrobras and strengthens its presence in Brazil, with much of the technology and equipment being produced and serviced locally at SLB OneSubsea's facilities in the country.

What is the production capacity of the new FPSO platforms for the Atapu and Sepia fields?

Each of the new FPSO platforms, P-84 (Atapu) and P-85 (Sepia), will have a daily production capacity of 225,000 barrels of oil and can process 10 million cubic meters of gas per day.