Saipem makes a comeback on Brazil’s oil & gas stage

Italy’s engineering, drilling, and construction services provider Saipem has returned to the Brazilian oil and gas scene following a two-year ban from engaging in contracting activity with the country’s public administration.

According to Saipem, the Federal Court of Brasilia has established the immediate annulment of the effects of the prohibitory sanction issued by the Controladoria-Geral da União (CGU) against Saipem and Saipem do Brasil. As a result, both are now fully operational with state-owned companies in the Brazilian market, with immediate effect.

Following accusations against Saipem regarding involvement in irregularities with Petrobras, which allegedly occurred during the execution of a contract to carry out the installation of an underwater gas pipeline in which its two business units, Saipem and Saipem do Brasil, were involved in 2011, an administrative accountability process (PAR) was launched on April 30, 2019, against the Italian player.

The probe into those alleged irregularities was undertaken as part of Operation Lava Jato, resulting in the conviction of one of Saipem’s representatives in Brazil and a former director of the state-owned energy giant. The irregularities reportedly happened during the execution phase of the contract for the installation of the submarine gas pipeline connecting the Lula and Cernambi fields in the Santos Basin, 280 km off the coast of Rio de Janeiro.

The CGU’s interim decision put in place a ban on Saipem’s contracting with the Brazilian public administration, issued on December 29, 2022. The Brazilian administrative authority issued on January 12, 2024, its final ruling in the administrative proceedings against Saipem and Saipem do Brasil, substituting the ban with a two-year suspension.

However, Saipem and Saipem do Brasil decided to appeal the suspension, deeming the decision “inconsistent” with what was demonstrated during the proceedings regarding alleged irregularities in the award of a contract for the gas pipeline installation by the BM-S-11 consortium.

Saipem’s fight to shake off the suspension bore fruit a few months ago when the Federal District Court of Brasilia decided to annul the order of the CGU, which prohibited the Italian player’s affiliates from engaging in contracting activity with the Brazilian public administration for two years.

The Italian giant, which recently completed an export trunkline installation offshore Australia, has won multiple new deals over the past few months, including an offshore assignment with Shell for a deepwater oil and gas project in Nigeria.

The firm’s Santorini drillship is staying off the coast of Namibia to continue the ongoing exploration and appraisal campaign during the Southern Hemisphere summer to avoid mobilization and demobilization costs.