Offshore staff
FAVERSHAM, UK – Brazil and Tanzania are both struggling to develop local content sufficiently for their offshore oil and gas projects, according to analyst Douglas-Westwood (DW).
Petrobras’ Replicant project is one of the most obvious examples. In 2010,Engevix signed a contract to supply Petrobras with eight FPSOs of identical designs. However, due to delays and a lack of financing, only three of the hulls have so far been completed, three years behind schedule. Much of the additional work has had to be transferred to China.
DW says this probably influenced Petrobras’ decision to apply for special dispensation for its Libra and Sepia FPSOs in the presalt Santos basin. Re-issued tenders for the units suggest a 27% local content level for some of the topsides equipment and none at all for the hull, far lower than the 70% usually stipulated.
But tendering activities have been halted by an injunction brought by Sinaval, which claims no consultation took place between Petrobras and local companies. The dispute appears to have widened to the political stage, with rumored delays to Brazil’s forthcoming bid round due to no agreement being in place over the extent of reforms to local content regulation.
In Tanzania’s case, leading offshore operators apparently voiced their concerns at a recent stakeholders’ consultation meeting over the impact the country’s 2015 Petroleum Act will have on developments ahead of a draft 2017 Regulation.
At present, a local content program must be submitted prior to any development plans, detailing local employment and the level of training operators will have to provide, with quarterly updates on the implementation of local content.
DW says the issues both these countries face are not unique: the question is, will the need to ensure that local content requirements are met compromise the drive for cost reductions and efficient project completion?
02/20/2017
