Subsea 7 Wins $1 Billion Contract for Petrobras, Galp Fields

11 April 2011

Subsea 7 SA, formerly called Acergy SA, won a $1 billion contract from Petroleo Brasileiro SA (PETR4) to develop the Lula and Guara fields in deep waters off Brazil.

The project involves the supply and installation of four riser systems, which include four submerged buoys each of 1,900 metric tons to be installed at approximately 250 meters (820 feet) below sea level, Subsea said today in a statement.

"The offshore installation is scheduled to commence in the second half of 2012, supportive of our expectations of earnings growth next year,” Egle Domataite, an analyst at Terra Markets AS, wrote in an e-mail.

Petrobras, together with partners BG Group Plc (BG/), Repsol YPF SA (REP) and Galp Energia SGPS SA (GALP), is developing the Lula field, the Americas' second-largest oil discovery in more than 30 years, and the Guara deposit in Brazil. Acergy agreed to buy Subsea for about $2.5 billion in June to take advantage of growing demand for oilfield services and to bid on larger contracts.

Subsea shares rose 0.5 percent to 144 kroner in Oslo.

"We look forward to developing further our local content facilities and expertise and build on our already strong presence in Brazil,” Subsea Chief Executive Officer Jean Cahuzac said in the statement.