JBIC joins US$1.35 billion co-financing for FPSO
MODEC, three other Japanese firms own vessel to be chartered by Petrobras for Brazilian offshore oil and gas production
12 Aug 2020 | Michael Marray

Japan Bank for International Cooperation (JBIC) has signed a project loan for a floating production storage and offloading (FPSO) vessel owned by MODEC, Mitsui & Co, Mitsui O.S.K. Lines (MOL) and Marubeni Corporation, which will be chartered to Petroleo Brasileiro SA (Petrobras) for use in its Buziosfield.

JBIC will provide US$491 million under its Growth Investment Facility, in a co-financing with MUFG Bank (facility agent), Sumitomo Mitsui Banking Corporation, Mizuho Bank, Ltd., ING Bank, SocieteGenerale, Citi Bank, Clifford Capital Pte. Ltd., Standard Chartered Bank and BNP Paribas.

The total co-financing amount is US$1.35 billion. Nippon Export and Investment Insurance (NEXI) will provide the insurance for a part of the loan by the private financial institutions. The loan agreement was signed on July 30.

MODEC is one of the leading FPSO service providers to oil companies around the world, and has a particularly strong presence in Brazil’s offshore industry. Given the high cost of FPSOs, it typically brings in co-investors to own the vessel, which it operates. This unit is owned by Dutch company Buzios5 MV32 BV (BMV32), which is incorporated by MODEC (35%), Mitsui & Co (35%), MOL (20%) and Marubeni (10%). The project is the seventh time the four companies have collaborated to operate FPSOs in Brazil.

MODEC is contracted for the engineering, procurement, construction, mobilization, chartering and operations of the FPSO. BMV32 has entered into a 21-year charter agreement for the deployment of the FPSO with Petrobras, the Brazilian state oil company.

A floating production, storage and offloading (FPSO) system is a floating vessel used in the first stage processing of crude oil produced at an oil well. It separates associated gas and water, and also stores and offloads oil.

The unit, FPSO Almirante Barroso MV32, will be deployed at the Buzios field, located in the giant "pre-salt" region of the Santos Basin. The field is located approximately 180 kilometres from Rio de Janeiro, along the southeastern coast of Brazil.

From 2022 the FPSO will be moored in waters with a depth of 1,900 metres. The FPSO unit will have the capacity to produce up to 150,000 barrels of crude oil per day and 212 million cubic feet of gas per day, as well as storing 1.4 million barrels of crude oil.

The FPSO Almirante Barroso is currently being converted from the 2005-built VLCC (very large crude carrier) VK Eddie at the COSCO Dalian yard in China.

There will also be local Brazilian content. Keppel Offshore & Marine (Keppel O&M) has signed a contract through its wholly owned subsidiary in Brazil. The work will be done at the Keppel O&M’s BrasFELS shipyard, with final delivery scheduled for late 2021.

According to JBIC, as oil companies in a number of countries have been actively developing offshore oil fields in recent years, the demand for new FPSO systems is expected to increase, particularly in Brazil and the West African region. Petrobras is engaged in developing many offshore oil fields in Brazil.

MODEC views Brazil as its most important market for the FPSO business, and this latest project will be its twelth FPSO vessel chartering service for Petrobras.

JBIC said the project will contribute to increasing and maintaining the international competitiveness of the Japanese offshore resource development industry. The Japanese government's Basic Plan on Ocean Policy emphasizes technology advancements for the development and commercialization of marine resources in waters around Japan. In this context, the business operation by MODEC and others on this project is also expected to contribute to the long-term, secure and stable supply of natural resources to Japan.

Buzios is one of the offshore oil and gas fields in Brazil which forms part of a Transfer of Rights agreement signed in 2010. The Buzios field is 100% operated by Petrobras.

Founded in 1968, MODEC is a leading specialist for FPSO vessels, Floating Storage and Offloading (FSO) vessels, Floating LNGs (FLNGs), Tension Leg Platforms (TLPs), Production Semi-submersibles,  and Mobile Offshore Production Units (MOPUs). 

MODEC has a long track record of EPCI (engineering, procurement, construction and installation) as well as charter and operations projects, and has so far delivered 46 floating production systems. It currently owns 11 FPSOs and 3 FSOs and operates 17 units. 

By 2022, Petrobras targets to bring online two production units, the Almirante Barroso for the Buzios field and the FPSO Anita Garibaldi as part of the Marlim 1 project.

On January 30 the same four Japanese companies signed an agreement to own the FPSO Anita Garibaldi via Dutch company Marlim1 MV33 B.V. (MV33). MODEC holds a 32.5% stake in the project, Mitsui & Co 32.5%, Marubeni 15%, and MOL 20%. The project is the eighth time the companies have co-operated to operate FPSOs in Brazil.

The FPSO will be chartered for 25 years by Petrobras. From 2022, it will be deployed at the Marlim field in the Campos Basin. The field is located approximately 150 kilometres offshore from Rio de Janeiro.