Bloomberg News

Saipem Sees Oil Services Growth in Brazil With Petrobras, OGX

March 29, 2012

Saipem SpA (SPM), the Milan-based oil services contractor, expects to increase business in Brazil with companies including Petroleo Brasileiro SA (PETR4) and OGX Petroleo e Gas Participacoes SA as the South American country seeks to more than double oil output in the next decade.

Saipem expects to help Petrobras, as the Rio de Janeiro- based producer is known, develop this decade’s largest discoveries on earth in the Atlantic Ocean’s deep waters, said Pietro Varone, the company’s chief operating officer of its engineering and construction unit. Saipem has four contracts with Petrobras to install pipelines that will transport natural gas to the coast from Brazil’s largest oil fields, he said.

“Our vision is for many, many more,” Varone said late yesterday in an interview in Rio de Janeiro. “We need to be ready with the right tools, equipment, people and fabrication to serve the development. OGX is a potential client of ours, we’re talking to them.”

Saipem also expects to compete for contracts with Royal Dutch Shell Plc (RDSA), BP Plc (BP/) and BG Group Plc (BG/), which are expanding production in Brazil. Saipem is building a $300 million logistics, construction and engineering center on the coast of Sao Paulo state to help supply offshore projects, he said.

OGX, controlled by billionaire Eike Batista, plans to boost output to 1.4 million barrels a day in 2019 from 12,000 barrels a day.

Saipem fell 1.8 percent to 38.14 euros at 4:14 p.m. in Milan.

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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