Perenco’s floating storage and offloading unit, FSO Pargo departed Dubai and is on its way to Brazil. The vessel spent almost one and a half years in a yard, working to extend its life spaN as well as necessary adaptations to comply with Brazilian regulations and project specifics. The FSO is expected to be moored at Pargo field in Campos Basin by April, aiming to start operations in August 2023. The installation of the unit is part of a USD 400 million investment plan, targeting the enhancement of the field’s production throughout the concession. Ever since taking the operatorship of the Pargo cluster, which comprises the fields Pargo, Carapeba and Vermelho, PERENCO’s asset’s production had already increased from 2.800 bpd to 12.000 bpd, with the expectation to increase it by a further 25% until the end of this year.
This last quarter two cases involving vessels have caught the public eye relative to the ageing tonnage ol the shipping industry in Brazil.In one hand the incident involving the M/V São Luiz, an out-of-service bulk carner that crasined against the Rio-Niterói bridge, brought hell to the already mad traffic in Rio de Janeiro and Niterói as the bridge was momentarily closed in the middle of rush hour and a tropical storm. The vessel that was anchored at the bay before getting lose and hitting the bndge was towed away to a nearby safe berth.
On the other hand, former Brazilian navy aireraft carrier NAe São Paulo has been auctioned and sold to a Turkish buyer, exported and underway to its destiny port had its entry denied by Turkish authorities, the export license re voked by the Brazilian environmental authorities, thus the convoy turned back to Rio de Janeiro al the way from nearly entering the Mediterranean, yet denied entry in Rio and instructed to proceed up north to Pernambuco. The compromised hull remains connected to the doeangoing tug ofishore Recife for weeks, said to contain a protrusion of approximately 3m just above the water line.
Both cases are surrounded with clashing legal appeas and challenges betwean involved parties. No, not only between buyer and seller but aiso environmental, judicial executive authorties in many layers of bureaucracy and endless discussions.
Rio de Janeiro has a long history as a central hub for navigation in South America. Additionally, it has led the two separate shipbuilding industry cycles in Brazil, in the 70’s and in the 2000 s, featuring the largest shipbuilding and ship repair complex in country. with yet some units active.
Further, Rio hosts most of the shipping companies, its agents and commis-sionaires, the offshore support industry for the oil and gas sector. Rio is the natural port for the admission, export and import, temporary admission and inspection of rigs and olishore units, the central cruise line destination in the east coast of South America and homeport of the highest concentration of fishing and lei-sure boats in the southeast Brazilian coast.
Therefore, naturally, maybe unfortunately, the state carries the burden of having to deal with the challenges of an ageing shipping industry. Owners would not naturally turn else-where if not Rio de Janeiro to “deposit” the ageing fleet, until some commercial sense could make it go away. Importers wouldn’t be able to sail elsewhere if a problem is en-countered, exporters must turn back or even not sail away if the process is not cleared to destination.
MN São Luiz and NAe São Paulo are clear examples of the messy dilemma, and they are only the tip of the tropical iceberg.
Rio is said to embrace more than 100 ships in out-of-service or abandoned condition. From various sizes, different segments within shipping from fishing through cabotage and deepsea shipping all the way into offshore support vessels. IMO listed and smaller craft. Registered tonnage, abandoned tonnage, unidentified tonnage. Floating, grounded, berthed, manned, unmanned, keeled over, listed completely sunk. With commercial value, without commercial value. With debt that is unpayable in this lifetime. Arrested by justice, locked by navy, anchored by Neptune containing asbestos, having people on board stealing what is left, having people on board in poor working condition, having people on board in no working condition. And just a few adequately kept and maintained, many cold stacked, some rare in warm stack, the only ones possibly having a new employment.
And the main issue is that no single authority or group of authorities, or companies, or academic, are fully aware and truly know what the effective number of ships, or hulls, are really deposited in Rio. If any have an es-timate, rest assured the number is only an estimate but moreover yet unprecise as to real condition, be it physical or fiscal, of the equipment.
The navy is the middle of the alarming situation. Caught in the middle. A democratic country has love for the legal procedure. And there relies on the main barrier, and the reason why the Navy can’t be blamed. The law established that the Navy is responsible for the removal and the demolition of sunk, sub-merged, grounded, and lost assets because of an incident or misfortune at sea. See?
The Navy can’t exactly take over a vessel. or hull, in whatever condition (except as specifically provided by law as above) that nas 16 an idenufied owner, or owners, or interested parties, under a legal dispute, where other authorities are also taking part in discussions and valuations and where parties have economical interest, even if those interests are purely related to vacating the debt or selling the steel. Further, the Navy is also allowed by law to delegate such responsibilities to other authorities such as the environmental in either state or federal level.
The situation is more than alarming. is crit-ical. Imagine. In the case of the MY São Luis, one month prior to the incident with the Rio-Niterói bridge, the port authority, which is involved in the legal case at court, requested the court for authorization to embark the ves. sel for certain safety measures which included inspections, welding and closing of bottom plugs, valves, sea chests and other parts, as well as the reinforcement of the anchorng of the vessel with potentially an additional mooring point to safeguard the vessels trom losing anchor.
The court decided favorably on this request 2 days alter the vessel nagu the bridge, in this JC year of 2022. The court case is on and the vessel in this location and poor condition since 2016 Courts are only slow, or they also don’t read the newspaper? Fair enough, here is a piece of improvement that can be pointed at, nevertheless, when will a serious study be commissioned and a joint effort lead by authorities be put in place to resolve the critical part of this situation?
Pointing at the fact that Rio de Janeiro state have taken over the area of that yard which has figured amongst the largest and most important in country in better days located in the Guanabara Bay. In itself currently not anything better than a junkyard in itself but naving a lot of potential for this and many oiner activities. Luckly we already see some movement from authorties in discussing its use Hoping for better days. The memory of the shipping industry deserves, as putting a decent end to the lifecycle of such equipment is very important to ensure its continuity.
After departing to Guyana in October last year to perform core sampling activities as noticed by WSB, the HOS Brass Ring has made it safely back to Guanabara Bay anchorage. The vessel is being refitted and will soon be trading in Brazilian waters.
ICBC Leasing, the Chinese financial institution, has announced the sale of the deepwater semi-submersible drilling rig SS Pantanal. The unit was built by Yantai CIMC Raffles Shipyard, delivered in November 2010 and, upon completing final preparations and mobilisation, operated in Brazil from 2012 to 2014. The rig was laid up in Porto do Açu since 2015 and in early 2021 was transported by a Cosco heavy lift to Indonesia where she had remained in lay up since her arrival. According to the auction manager, Zhejiang Shipping Exchange, all the machinery and equipment are shut down and some areas and tanks cannot be presently accessed and inspected. Further, it has not been dry-docked since delivery. The starting price is USD 8 million with bid increments at multiples of USD 0.02 million. Interested parties have until February 9th to register as participants.
Last Friday, Petrobras received offers for the AHTS tender with hybrid propulsion (battery packs). The opportunity aims the hire of up to 2 vessels for a 4-year firm contract period with mobilization expected between July and September this year or 120 days after contract signature, whichever occurs latest. There was some concern over the battery packs requirement however, even with many requests not accepted by Petrobras during the tender process and several postponements of the submission deadline, the opportunity displayed a decent number of competitors, granted this was the first ever public tender to demand a hybrid propulsion solution. Amongst a total of 9 vessels presented to Petrobras, CBO snatched the first two places at USD 39.650,00/day with their AHTSs acquired from Finarge – AH Liguria and AH Valletta. Although bidders had to comply with the battery requirement, the winning rates did not wander too far from the USD 35.000 winning day rate in the previous AHTS tender which did not require any kind of hybrid propulsion. Despite not waiving the hybrid propulsion while understanding the technical and logistics challenges involved in such adaptation, Petrobras granted the awarded vessels a 12 month-window from the start of the contract to be fully compliant with this requirement.
Companies CGG and TGS announced this week the second phase of the multiclient 3D research for the Foz do Amazonas basin, located in the equatorial margin off the north coast of Brazil. The data supplying companies shall provide high quality 3D coverage of 11.425 square kilometres that are going to be essential for the explorations in the region. Both companies see this new project as a strengthening and broadening of their positions and library data as well as a deeper understanding of the seabed.
At the end of last week, Petrobras received the offers for 3 of the 4 issued PSV tenders. The public opportunity for up to 20 PSVs had a total of 34 vessels (PSVs 3000, 4000 and 4500 DWT amongst them) presented in 17 of the 20 batches available for bidders’ choice. The most competitive offers were presented by CBO at USD 29,990.00/day, on the 4 years firm contract period batches, and rates ranged all the way till just above USD 40,000.00/day. The smaller vessels (DWT 3000) averaged a daily rate of USD 26.000,00 with the most competitive offer from WSUT at USD 24.990,00/day. Although both Brazilian and Foreign flag vessels were allowed to bid, most of the offers came from Brazilian/REB units with just 4 vessels presented under foreign flag. The Mero and ‘Búzios/Roncador’ opportunities were closed invitation processes (SEP) therefore all offers, and details are not publicized, although we have sent our closest clients the required information. Participants expect that the Brazilian flag tonnage will prevail, Petrobras to move fast and negotiate all opportunities in parallel.
Petrobras’ tender for the contracting of up to four OSRVs closed yesterday with the offers delivered. Owners are granted 120 days to mobilize the vessel with commencement scheduled for October 2023. Contract period is of 1460 days firm. Bram Offshore stroke the first four positions (C-Ambassador, C-Admiral, C-Sailor, C-Aclaim) at USD 18.222,00 followed by Marlin Yare and Singrar from Marlin Navegação and Navemestra respectively at USD 18.300,00 and USD 19.000,00. Petrobras’ final tender results with awards shall come out in the following weeks with rounds of technical approvals followed by negotiations.
Helix Energy Solutions recently announced a new deepwater well decommissioning (P&A) contract with Shell Brasil. The project is expected to start in 2024 with a 1-year firm contract period for the Bijupirá&Salema fields, located in Campos Basin. Helix will employ the riser-based well intervention vessel Q7000 for this project. The DP3 equipped vessel can perform production enhancement operations such as well clean-up and field development support as well as decommissioning activities in water depths up to 3,000 meters. Shell Brasil acquired the fields and FPSO Fluminense from Enterprise Oil in the early 2000’s becoming a pioneer on the offshore production in Brazil.
Equinor started drilling in Bacalhau field with drillship West Saturn. The Norwegian oil company is the first international operator to develop a pre-salt field in Brazil. Equinor counts with three large PSVs 4500 to support the campaign: CBO Wiser, Rem Mistral and Siddis Sailor all under Grupo CBO operation. West Saturn is chartered in for four years at Bacalhau field. In 2023, Valaris DS-17 will also be under charter for 540 days. Besides Bacalhau, Equinor concluded phase 2 of the Peregrino development phase in Campos Basin through the installation of a 3rd wellhead, Peregrino C. This milestone will extend the field life till 2040.
PSV 4500 Maersk Vega has been awarded a long-term contract with Trident Energy in Brazil. The Brazilian built DP2 vessel is being mobilized in Guanabara Bay. As reported in our previous Weekly Market Update, Trident recently chartered PSV 4500 Normand Titus from Solstad for one year firm. Maersk Vega and Normand Titus join PSV 3000 Mandrião from WSUT. All vessels are employed at Pampo and Enchova fields in Campos Basin.
As the market tights up, Petrobras sets the foot on the throttle to extend a pack of contracts expiring in 2022. However, that doesn’t mean less competition in currently open tenders. The extended contracts feature clauses where owners can bid on tenders, and in case of a delivery date (of the tender) falling within the extended contract period, the vessel can migrate from the extended contract into the new contract without any penalties. Petrobras playing smart. This is an interesting move that also benefits the owners and makes everyone comfortable. Win-win.
