GE $1Bn wellhead deal with Petrobras

GE Oil & Gas and Brazilian energy company Petrobras have signed the world’s largest subsea wellhead production contract, worth nearly US$1.1Bn. This includes the delivery of approximately 380 subsea wellhead systems and installation tools needed in oil well exploration, and more than 75 percent of the parts will be made in Brazil.

GE announced the award of the contract at the 2012 Rio Oil & Gas being held September 17-20 in Rio de Janeiro.

“This new agreement between two of the world’s largest companies shows our commitment to collaborate in the development of the oil and gas sector in Brazil,” said João Geraldo Ferreira, president and CEO of GE Oil & Gas for Latin America. “In recent years our investments and efforts have been focused on preparing our company to support market growth and to be ready for contracts of this size, developing the entire supply chain. We want to grow with the country.”

“The new contract builds on our existing relationship with Petrobras and follows previous successful projects,” said Rod Christie, vice president of GE Oil & Gas Subsea Systems. In 2009, GE Oil & Gas and Petrobras signed what was then the biggest wellhead contract in history to date (in terms of number of wellheads), worth US$250 million.

“Through the acquisition of VetcoGray in 2007 and Wellstream in 2011 and ongoing investments in technology, GE has become an established player in the offshore industry,” said Christie. “With more than 5,000 subsea employees operating in more than 50 countries we are supporting some of the industry’s largest and most challenging projects.”

Petrobras plans to install the subsea wellhead systems in various oil and gas fields in Brazil, including sub-salt. The equipment will be produced at the GE plant in Jandira (São Paulo), where GE has invested US$30m to expand production capacity.

“The Jandira facility has been crucial in allowing GE Oil & Gas to provide world-class technology and has prioritized Brazilian-based production, which is a critical component in local social and economic growth,” said Fernando Martins, president of Subsea Systems for GE in Latin America. In the last 30 years, more than 1,200 GE wellhead systems and 180 subsea Christmas trees have been produced and installed in Brazil.

Petrobras is an integrated energy company that operates in 27 countries on five continents. It is a world leader in deepwater and ultra-deepwater oil production and operates approximately 100 production platforms, 15 refineries, 30,000 kilometers of pipelines and more than 6,000 service stations.

GE Oil and Gas is committed to business growth in Brazil and continues to invest in new capacity to take on orders and new industry demands. The US$30 million invested in Jandira (SP) was used for capacity expansion and modernization of the operation. In Niterói (Rio de Janeiro), GE is investing US$200m to expand its flexible line plant, to serve the new sub-salt fields.

In June 2012, GE announced the completion of the US$32m expansion of its plant in Macaé (Rio de Janeiro), tripling the size of the facility and making it GE Oil & Gas’s most modern subsea system services provider in the world. This expansion increased the workforce at the site by 150%.

Second Siemens power plant in Texas

Just two months after the contract was signed with the private equity firm Panda Power Funds for the turnkey supply of a natural-gas-fired combined-cycle power plant in Temple, Texas, Siemens has been awarded a second order by the same customer for an identical project in the city of Sherman. Siemens will supply the plant in consortium with its partner Bechtel. The order volume including a long-term service agreement is approximately USD300 million. The power station with a gross installed electrical capacity of 758 megawatts (MW) will be able to supply the power needs of approximately 750,000 homes in the North Texas area.

Siemens will deliver the power island equipment, including two gas turbines, one steam turbine, three generators and the instrumentation and control system. A long-term service agreement has also been signed for the main generation components. Bechtel will be responsible for the engineering and procurement for the balance of the plant, and the installation, construction and commissioning of the facility. The gas turbines, steam turbine and generators will be manufactured in the Siemens factory in Charlotte, North Carolina.

The new Sherman generating station will be among the cleanest fossil-fuel plants in the United States. The Siemens Flex-Plant 30 technology offers high efficiency and operational flexibility with low emissions. Power generation can commence within ten minutes of start-up, and full base-load power production in less than one hour, allowing rapid response to changing market conditions and enabling the smooth integration of renewable energy sources in the power grid.

Highly efficient and flexible combined-cycle power plants (CCPP) are part of the Siemens Environmental Portfolio. In fiscal year 2011, revenue from the Portfolio totalled about EUR30Bn, making Siemens one of the world’s largest suppliers of such eco-friendly technologies. In the same period, our products and solutions enabled customers to reduce their carbon dioxide (CO2) emissions by nearly 320 million tons, an amount equal to the total annual COemissions of Berlin, Delhi, Hong Kong, Istanbul, London, New York, Singapore and Tokyo.

The Siemens Energy Sector is the world’s leading supplier of a complete spectrum of products, services and solutions for power generation in thermal power plants and using renewables, power transmission in grids and for the extraction, processing and transport of oil and gas. In fiscal 2011 (ended September 30), the Energy Sector had revenues of EUR24.9Bn and received new orders totalling approximately EUR31.8Bn and posted a profit of EUR3.9Bn. On October 1, 2011, the Energy Sector had a work force of more than 82,000. Further information is available at: www.siemens.com/energy.