Sapura looks to broaden its Brazil offshore horizons

One of the main pipelay support vessel (PLSV) operators in Brazil, Sapura, is eyeing offshore decommissioning and wind power service opportunities, local CEO Rogério Salbego tells BNamericas in this interview.  

Salbego also talks about the business outlook for the country, where projects have resumed after a delay caused by the COVID-19 pandemic. The interview was conducted via email.

BNamericas: What are the perspectives for the Brazilian market in this and the coming years, considering the context of the economic and health crisis?

Salbego: The COVID-19 crisis had a delaying effect on projects already sanctioned by operators, which are now leaving the drawing board. At the same time, we’re seeing a strong movement on the part of majors and IOCs [international oil companies] to contract new projects, raising demand beyond pre-crisis levels, with figures that we didn’t see a few years ago. It is indisputable that there’s a lot of potential in terms of production volume for IOCs in Brazil, but even if we leave that aside and consider only [federal oil company] Petrobras, it would already be possible to understand the potential for our market. Petrobras recently announced that it will put into service 13 new FPSOs between 2021 and 2025. This will have a major impact on the entire offshore services industry, requiring several types of assets and the provision of specialized services.

BNamericas: What are Sapura's main ongoing projects/ contracts in the country?

Salbego: Our contracts in Brazil today are related to the provision of services and chartering of PLSVs to Petrobras, with four vessels [Sapura Onix, Jade, Esmeralda and Rubi], and PetroRio, with one vessel [Sapura Topázio]. 

BNamericas: Does the company foresee growth in Brazil? Can you give us a goal or estimate?

Salbego: We anticipate an increase in our market share, especially when it comes to the EPCI [engineering, procurement, construction and installation] contracting model, which is in full growth.

BNamericas: What is the future of the demand for PLSVs in the country, considering the projects of Petrobras and private operators? What bids are expected?

Salbego: Petrobras recently launched a public tender for the contracting of PLSVs with a contractual term of three years. We don’t know exactly how many vessels will be hired in this bidding, but there is the prospect of substantially increasing the current fleet.

In addition to this demand, the SURF [subsea umbilicals, risers and flowlines] EPCIs that are in the market also call for the launch of flexible and umbilical lines in ultra-deep waters, further increasing the demand for this type of vessel.

Some of the EPCIs expected by the market in Q1 and Q2 in 2021 are: Mero 3, Mero 4, Buzios 6, Buzios 7, Buzios 8 and HISEP [Petrobras’ innovative subsea CO2 separation system expected to be installed in the Libra block].

BNamericas: Do oil companies tend to demand that PLSVs act more and more “multi-purpose,” that is, capable of installing various types of subsea equipment?

Salbego: Certainly. The flexibility and added value that a multipurpose vessel brings to the project have been increasingly requested by operators. Over the past six years, we’ve adopted an extremely proactive stance at Sapura, making considerable investments in our vessels and engineering capacity. The result of this effort were some atypical projects for a PLSV, successfully carried out, such as the launch of a flexible 16” jumper, installation of manifolds in ultra-deep waters, and installation of a wet Christmas tree through the vessel's crane, to name a few examples.

BNamericas: What other market niches is Sapura eyeing in Brazil?

Salbego: We cannot ignore the enormous potential for the development of offshore wind farms along the extensive Brazilian continental shelf. We’re certainly watching this market closely, and we hope to be a relevant player in the FEED [front-end engineering design], engineering and installation phases for this market.

In the shorter term, we’re looking at the decommissioning market. There has already been a bidding process for the decommissioning of the Cação [Espírito Santo field] platforms, and there’s still a bidding process for the decommissioning (collection, disposal and alienation) of the flexible lines and anchoring systems in the areas of the “submarine warehouses” in the Campos basin.

BNamericas: Can the expected increase in floating regasification terminals generate new business opportunities for Sapura? The company worked on the installation of pipelines connected to Celse's FLNG, in Sergipe, right? How was that experience?

Salbego: The internal engineering capacity that we have built up over the life of the company is in itself an extremely valuable asset for taking on new offshore projects such as the installation and connection of a floating regasification terminal, for example.

Regarding the Celse project in the port of Sergipe, we drew up all the engineering procedures, starting with the positioning and hook-up of the FSRU (floating storage regasification unit) in the submarine system, as well as the launch of the rigid pipeline in the sea, installation of the pipeline on land, connection of the entire system to the Celse thermoelectric plant [Porto de Sergipe], ending with the pre-commissioning of the pipelines.

BNamericas: Is there a chance that Sapura will build new PLSVs in Brazil or abroad? Or will the company tend to use only existing ships in the coming years?

Salbego: Considering the ongoing forces that are strongly pressing for a change in the energy matrix, the market in general may be more interested in building or adapting assets that can participate in more sustainable projects, such as the installation of power cables in wind farms. That being said, we still need to be well prepared to meet the global demands of the oil and gas market, and we cannot rule out a future increase in the fleet. Looking at the market today and making a forecast for the coming years, we’re able to meet the demand from operators with existing PLSVs.

BNamericas: At what level are the PLSV charter fees in Brazil and abroad?

Salbego: Between US$160,000 and US$220,000 [per day], depending on the vessel's capacity.

BNamericas: Last year, oil companies held rounds of contract negotiations with suppliers amid a sharp drop in the price of oil. With Brent's recovery, is there room for a rise in daily rates?

Salbego: We still expect downward pressure on daily rates in the near future (one to two years) considering that many vessels that were built at the peak of the market, between 2007 and 2013, are still re-establishing themselves in the market and prospecting for new contracts.

BNamericas: How has the pandemic been affecting your activities? Has the company registered contaminated employees or deaths? What steps have you taken so far to prevent the spread of the virus among your employees?

Salbego: From the outset we took drastic measures to ensure, in the first place, the safety of our people and the continuity of offshore operations. We started with boarding restrictions for employees belonging to the risk group.

We have established a strict protocol, which includes a pre-departure quarantine of 14 days, eight days at home, and six days in a dedicated hotel. To reduce the exposure of employees, we contracted a hotel for their exclusive use and Sapura's subcontractors. Each employee performs at least 2 RT-PCR tests during quarantine, and we have already performed more than 12,000 PCR tests on our crew, with 412 positive tests (290 Sapura employees and 122 suppliers). In other words, we act strongly in preventing the boarding of employees who are positive, thus preventing dissemination on board. Currently, each ship has a machine for carrying out RT-PCR in suspicious cases on board. This measure brought a lot of tranquility to the employees and agility in the treatment of these cases, thus avoiding panic and uncertainty. Previously, suspected cases had to be landed for testing.

Regarding the attention to the psychological state of employees, which is so important at the moment, we have implemented a remote psychological assistance program in partnership with Bradesco Saúde, [known as] OrienteMe. In addition, in partnership with the Albert Einstein hospital, we implemented telemedicine service for employees, family members and anyone who resides with the employee, Einstein Conecta.