LatAmOil: Petrobras awards subsea contract ahead of focus shift to upstream operations

Oil and gas engineering services company TechnipFMC has secured two significant subsea contracts from Brazil’s national oil company (NOC) Petrobras for offshore pre-salt fields.
The first contract, valued at $250-500mn, involves designing, engineering and manufacturing riser flexible pipe, along with associated services.

The second contract, won through a competitive tender, covers the design, engineering and manufacture of subsea production systems for the Atapu 2, Sepia 2, and Roncador projects. This contract, valued at $75-250mn, also includes installation support, life-of-field services and options for additional equipment.

TechnipFMC will manufacture and service all equipment locally in Brazil, it said.
“These awards underscore our leadership position in flexible pipe technology, and the proven success of our standardised equipment platform that was effectively deployed for Petrobras on the Buzios 6-9 fields,” stated TechnipFMC’s president of subsea, Jonathan Landes.
This comes as Petrobras prepares to place greater emphasis on upstream operations in its upcoming 2025-29 strategic plan. This shift aims to address concerns about declining oil and gas reserves, which could start as early as 2030 under the current plan.

In an interview with Reuters, Petrobras’ chief financial officer, Fernando Melgarejo, highlighted the company's renewed focus on oil production, stating that “every drop of oil is important to the company – if economically viable, obviously".

This approach marks something of a departure from the previous 2024-28 plan, which included significant investments in low-carbon initiatives.

Despite the increased focus on upstream activities, Melgarejo said that the new plan would not require major mergers or acquisitions, nor would it necessitate substantially more debt or cash compared to the current strategy.

“The focus is to try to replenish reserves as much as possible … without losing sight of the energy transition, but one cannot overshadow the other," he said.

This strategic shift comes in the wake of recent leadership changes at Petrobras. Brazilian President Luiz Inacio Lula da Silva replaced former CEO Jean Paul Prates with Magda Chambriard in June, aiming to accelerate investments.

Melgarejo, who was appointed as part of this shake-up, views the new direction as a reflection of market confidence in the company under Chambriard's leadership.
The company is exploring new frontiers, including the environmentally sensitive Equatorial Margin in Brazil and natural gas projects in Colombia.

Melgarejo noted that the new plan would proceed "without major or abrupt changes”, maintaining a focus on financial stability alongside the push for increased oil and gas reserves.

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