OOG confirms fire at Petrobras FPSO during sea test

9/4/2012

OOG confirms fire at Petrobras FPSO during sea test

BY JEFF FICK

RIO DE JANEIRO -- OOG, a unit of local construction firm Odebrecht, confirmed that a fire occurred during sea testing of a platform under construction in Singapore for state-run energy giant Petrobras.

OOG said that the fire, which happened last Thursday night, was extinguished without any environmental impact or loss of life. OOG, consortium partner Teekay, shipbuilder Jurong and local authorities are investigating the accident, OOG said.

Petrobras referred questions about the accident to OOG.

OOG and Teekay partnered to build the Cidade de Itajai FPSO. In a recent presentation, Petrobras said that it expected to install the FPSO at the Bauna and Piracaba fields, with first oil from the two fields expected by the end of next month. The Cidade de Itajai has installed capacity to produce 80,000 barrels of crude oil and 2 MMcmd of natural gas.

It remains unclear how the accident will affect the production timeline.

A series of delays in building new drilling rigs and production platforms, as well as a heavy agenda of maintenance shutdowns at offshore platforms has undercut Petrobras's crude oil production so far in 2012. The company previously had said that it expected to produce about 2.1 million barrels this year, but Petrobras reported last week that domestic oil output dropped 1% in July to 1.94 million bopd.

Lower-than-expected output so far in 2012 has raised questions about whether Petrobras, which produces more than 90% of Brazilian crude oil, will suffer its first year-on-year decline in production since 2004, analysts said.

The two fields, previously known as Tiro and Sidon, are shallow-water fields located off the coast of Sao Paulo state. The fields, which were discovered in mid-2008, hold estimated recoverable reserves of 150 MMboe. The oil is also a high-value "light" grade rated at 34 degrees on the American Petroleum Institute's rating scale.

Dow Jones Newswires

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