Subsea7 Secures Petrobras Sépia 2 Contract
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy PBR?
Source: Yahoo Finance
- Large Contract Value: Subsea7 has secured a contract exceeding $1.25 billion with Petrobras for the Sépia 2 project, which includes engineering, procurement, fabrication, installation, and pre-commissioning of subsea umbilicals, risers, and flowlines for 17 wells, showcasing the company's strong competitive position in the Brazilian market.
- Project Timeline: Offshore operations for the Sépia 2 contract are set to commence in 2029, with Subsea7 initiating project management and engineering work immediately from its offices in Rio de Janeiro, Paris, and Sutton, UK, ensuring timely delivery of the project.
- Strategic Partnership: This contract strengthens Subsea7's established relationship with Petrobras in Brazil, reflecting the company's expertise in deep-water projects and support for national importance projects, which is expected to lead to more collaborative opportunities in the future.
- Market Expansion Potential: The Sépia 2 project is part of Brazil's pre-salt resource base expansion, and Subsea7's involvement not only enhances its market position in the region but also opens the door for additional deep-water development contracts, driving long-term growth.
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Analyst Views on PBR
Wall Street analysts forecast PBR stock price to fall
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 21.010
Low
13.30
Averages
15.15
High
17.00
Current: 21.010
Low
13.30
Averages
15.15
High
17.00
About PBR
Petroleo Brasileiro S.a. Petrobras is a Brazil-based government agency. The Company specializes in the oil, natural gas and energy industry. Petrobras has three operational segments: Refining, Transportation, and Marketing (R&M), which encompasses the activities of refining, logistics, transportation, acquisition and export of crude oil, as well as the purchase and sale of petroleum-derived products, in Brazil and abroad; Exploration and Production (E&P), which encompasses the activities of exploration, production development and production of oil, natural gas liquids (NGL) and natural gas, as well as Gas and Low Carbon Energy (G&EBC), which encompasses logistics activities, natural gas and electricity trading, transportation and marketing of liquefied natural gas (LNG), power generation through thermal power plants, as well as the results of natural gas processing operations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Project Timeline: Offshore operations for the Sépia 2 contract are set to commence in 2029, with Subsea7 initiating project management and engineering work immediately from its offices in Rio de Janeiro, Paris, and Sutton, UK, ensuring timely delivery of the project.
- Strategic Partnership: This contract strengthens Subsea7's established relationship with Petrobras in Brazil, reflecting the company's expertise in deep-water projects and support for national importance projects, which is expected to lead to more collaborative opportunities in the future.
- Market Expansion Potential: The Sépia 2 project is part of Brazil's pre-salt resource base expansion, and Subsea7's involvement not only enhances its market position in the region but also opens the door for additional deep-water development contracts, driving long-term growth.
See More
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- Diesel Import Dependency: With the Iran war causing a surge in global diesel prices, Brazil imports approximately 25% of its diesel needs, making it critical for Petrobras to boost refining capacity, and acquiring Mataripe would help reduce this dependency.
- SEAP I Project Investment Decision: Petrobras has made a final investment decision for the SEAP I project aimed at unlocking significant volumes of light oil and natural gas offshore Brazil, with total investments for SEAP I and SEAP II expected to exceed 60 billion reais (approximately $12 billion) and deliver over 1 billion barrels of oil equivalent (boe).
- Floating Production Unit Construction: Petrobras has selected SBM Offshore (SBFFF) to construct two floating production, storage, and offloading units, P-81 and P-87, which will be deployed on the SEAP I and SEAP II projects, further enhancing its offshore oil and gas development capabilities.
See More
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- Contract Extension: Transocean Ltd. announced a 1,156-day contract extension for the Deepwater Corcovado rig with Petrobras, expected to add approximately $445 million in incremental backlog, ensuring operations continue through November 2030.
- Backlog Adjustment: Despite the significant backlog increase from the extension, the company anticipates a reduction of about $20 million in backlog during the period from April 1 until the extension commences in September 2027, reflecting short-term financial adjustments.
- Net Additional Backlog: After accounting for the short-term reduction, the net additional backlog from the extension is approximately $425 million, which will provide robust support for the company's future revenue growth and enhance its competitive position in the market.
- Market Reaction: In pre-market trading on the New York Stock Exchange, Transocean's stock rose by 0.08% to $6.64, while Petrobras' stock fell by 0.75% to $21.81, indicating a positive market response to the contract extension.
See More
Petrobras Acquires Remaining Stakes in Tartaruga Verde and Espadarte Fields
- Acquisition Deal: Petrobras has agreed to acquire the remaining 50% stakes in the Tartaruga Verde and Espadarte Module 3 fields from Petronas for $450 million, which will result in 100% ownership and further consolidate its control over high-margin offshore assets.
- Current Production: Petrobras currently produces approximately 55,000 barrels per day from these fields using the Cidade de Campos dos Goytacazes floating production, storage, and offloading vessel, ensuring sustained production capacity in the mature Campos Basin.
- Market Strategy: This acquisition is part of Petrobras' ongoing strategy to strengthen its control over mature yet still productive Campos Basin, enhancing the company's overall profitability and competitive position in the market.
- Government Intervention: Brazilian President Lula announced that the government will seek to annul the liquefied petroleum gas auction held in March to protect consumers, arguing that the auction prices were excessively high, which could impact Petrobras' market image and future pricing strategies.
See More
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- Large Contract Value: Subsea7 has secured a contract exceeding $1.25 billion with Petrobras for the Sépia 2 project, which includes engineering, procurement, fabrication, installation, and pre-commissioning of subsea umbilicals, risers, and flowlines for 17 wells, showcasing the company's strong competitive position in the Brazilian market.
- Project Timeline: Offshore operations for the Sépia 2 contract are set to commence in 2029, with Subsea7 initiating project management and engineering work immediately from its offices in Rio de Janeiro, Paris, and Sutton, UK, ensuring timely delivery of the project.
- Strategic Partnership: This contract strengthens Subsea7's established relationship with Petrobras in Brazil, reflecting the company's expertise in deep-water projects and support for national importance projects, which is expected to lead to more collaborative opportunities in the future.
- Market Expansion Potential: The Sépia 2 project is part of Brazil's pre-salt resource base expansion, and Subsea7's involvement not only enhances its market position in the region but also opens the door for additional deep-water development contracts, driving long-term growth.
See More
Petrobras of Brazil to Compensate Customers for Discrepancy Between Auction Bids and Import Costs
Petrobras Reimbursement: Brazil's state-controlled oil company, Petrobras, is set to reimburse clients for the difference between auction bids and import prices.
Impact on Clients: This decision aims to address discrepancies in pricing that have affected clients involved in the oil market.
See More
Petrobras of Brazil to Implement Measures to Mitigate Price Impact from March 31 LPG Auction - Official Statement
- Brazil's Petrobras Response: Petrobras announced plans to take actions aimed at offsetting the price effects resulting from the LPG auction held on March 31.
- Impact of LPG Auction: The auction's outcomes are expected to influence pricing strategies and market dynamics for the company.
See More
