Mitsui, Schahin win $1.2 bn order

Mitsui Engineering & Shipbuilding Co and Schahin Engenharia SA won a 100 billion yen ($1.2 billion) order from Petroleo Brasileiro SA to build a floating oil platform for use in the Guara oil fields off Rio de Janeiro.

Modec Inc, the second-largest maker of floating oil platform, will build a floating production, storage and offloading vessel by remodelling a used oil tanker, and lease it for 20 years, said Masahiro Takaoka, a spokesman for Tokyo-based Mitsui Engineering, the parent of Modec.

Brazil’s state-controlled oil company, known as Petrobras, plans to spend $224 billion in the next five years developing offshore fields including Tupi, the largest find in the Americas since Mexico’s Cantarell in 1976. This is the sixth contract Mitsui Engineering won from Petrobras, adding to 861 billion yen of orders at Mitsui, with 570.5 billion yen at its ship and marine division as of June 30.

“It’s positive that Modec can get involved in an emerging market where high growth is expected,” Satoshi Yuzaki, an analyst at Takagi Securities, said in Tokyo. “We will monitor how much the company will benefit from the joint order.”

Modec, 50.1 per cent owned by Mitsui Engineering and 14.99 per cent by Mitsui & Co, rose 3.2 per cent to 1,181 yen at the 3 pm close on the Tokyo Stock Exchange, after falling as much as 3.8 per cent earlier today. Mitsui Engineering shares closed down 0.6 per cent to 181 yen.

Petrobras plans to double output to 5.38 million barrels of oil a day by 2020, mainly from deepwater fields in Brazil. Guara, located near Tupi, may hold as many as 2 billion barrels of oil. A floating production, storage and offloading vessel is installed above or close to a field to process the oil.

The vessel will be delivered in the fourth quarter of 2012, and will be able to handle 120,000 barrels of crude oil a day with a storage capacity of 1.6 million barrels, Modec said today in a statement on its website.

The latest deal followed an August 2008 order from Petrobras for a FPSO used in Tupi, the statement said. Mitsui Engineering had a total order backlog of 861 billion yen.