Saipem scores $1.9 billion contract wins offshore Guyana and Brazil

Italy’s engineering, drilling, and construction services provider Saipem has tucked under its belt two new offshore contracts worth approximately $1.9 billion for work with ExxonMobil’s subsidiary ExxonMobil Guyana Limited and Equinor. As a result, the Italian player will carry out operations for the U.S. oil major in Guyana while the assignment with the Norwegian state-owned energy giant is in Brazil.

According to Saipem, the first contract has been awarded for the proposed Whiptail oilfield development, which is the sixth project located in the Stabroek block offshore Guyana, at a water depth of approximately 2,000 meters. ExxonMobil is working with the government of Guyana to secure regulatory approvals for this project. Based on the new contract award, the Italian giant’s scope of work for the Whiptail project covers the design, fabrication, and installation of subsea structures, risers, flowlines, and umbilicals for a large subsea production facility.

Furthermore, Saipem will perform operations using its vessels FDS2, Constellation, and Castorone. The company’s Guyana Offshore Construction Facility located at the Port of Georgetown, will be deployed as a key fabrication site for the firm’s execution model, enhancing a sustainable steady growth in the country. This contract win will allow the Italian player to begin some limited activities, such as detailed engineering, and procurement, subject to the necessary government approvals, the project sanction by ExxonMobil Guyana Limited and its Stabroek block coventurers, and an authorization to proceed with the final phase.

The Whiptail project will enable the development of the Whiptail, Pinktail, and Tilapia fields, along with potential additional resources, if determined to be feasible and economically viable. The current development plans for the project entail drilling via drillships to produce oil from approximately 40 – 65 production and injection wells. The project is expected to come online between 4Q 2027 and 2Q 2028 with an expected field life of at least twenty years.

Recently, SBM Offshore got its hands on a contract to perform front end engineering and design (FEED) for an FPSO vessel, which is destined to work on ExxonMobil’s sixth deepwater oil development project on the Stabroek block. This will be the fifth FPSO built by the Dutch player for operations in Guyana.

Based on ExxonMobil’s plans, six FPSOs with a gross production capacity of more than 1.2 million barrels of oil per day are expected to be online on the Stabroek block by the end of 2027, with the potential for up to ten FPSOs to develop the estimated gross discovered recoverable resources of more than 11 billion barrels of oil equivalent.

The Stabroek block covers 6.6 million acres (26,800 square kilometers) and is operated by ExxonMobil’s affiliate Esso Exploration and Production Guyana with a 45% interest. The company’s partners in the block are Hess Guyana Exploration (30%) and CNOOC Petroleum Guyana (25%).

On the other hand, Saipem’s second contract award, secured with Equinor, is for the Raia project, which entails the development of a pre-salt gas and condensate field in the Campos Basin, located about 200 km offshore the state of Rio de Janeiro in Brazil.

The Italian firm’s scope of work encompasses the offshore transport and installation of a subsea gas export line and associated equipment in water depths of around 2,900 meters, as well as the horizontal drilling activities for the shore approach. Saipem will deploy its pipelaying vessel Castorone for the installation works.

The company believes that this project will enable it to contribute to the realization of one of the most important gas development projects in Brazil, which could represent 15% of the total domestic demand of the country. The extracted gas will be transported through pipelines installed by the Italian player for approximately 200 km from the field to a gas receiving facility to be built in Cabiúnas, in the city of Macaé in the State of Rio de Janeiro.

Equinor submitted the declarations of commerciality and plans of development for two natural gas fields – Raia Manta and Raia Pintada – in the BM-C-33 concession located in Brazil’s Campos Basin to Agência Nacional de Petróleo, Gás Natural e Biocombustíveis (ANP) in September 2023. The Norwegian giant as the operator holds a 35% stake in this block while Repsol Sinopec Brasil and Petrobras hold 35 and 30% interest, respectively.

The selected development concept comprises an FPSO capable of processing gas and oil/condensate to meet sales specifications without further onshore processing. The FPSO will have a production capacity of 16 million cubic meters of gas per day with expected average exports of 14 million cubic meters of gas per day. The start-up of the project is anticipated in 2028. This is expected to be Brazil’s first project to treat the gas offshore and be connected to the national grid without further onshore processing.

“The two awards confirm, once again, the competitiveness of Saipem’s offer in bidding processes and the ability to build long-term partnerships based on consistent performances. Moreover, they further strengthen the visibility on Saipem’s key assets utilization throughout 2027,” underlined the Italian giant.

Business is booming for Saipem, which secured a multi-billion-dollar letter of award (LOA) with the UAE’s ADNOC, in consortium with National Petroleum Construction Company (NPCC) – a subsidiary of National Marine Dredging Company. The Italian giant also recently sold an FPSO vessel, which is working in the Espírito Santo Basin offshore Brazil.