1
INTERVIEW Supporting an Ultra-Deepwater FPSO Operation Project in Brazil Strengthening the International Competitiveness of Japanese Companies in Offshore Resource Development FPSO to Serve Ultra-Deepwater Oil Field Development Supporting the Future Development of Underwater Resources Deputy Director Miyaguchi An Ultra-Deep FPSO System Chartering Service in the Iracema Norte Area of a Pre-Salt Oil Field off the Coast of Brazil Talking with Director Katsuya Mogaki and Deputy Director Tomoyuki Miyaguchi *1 Division 1, Marine and Aerospace Finance/Financial Products Department, Industry Finance Group There have been discoveries of large-scale oil fields in a Pre-Salt Oil Field in Brazil and the development of ultra-deepwater (over 1,000 meters deep) oil fields have been pushed forward steadily from the late 2000s. FPSO is essential for the development, but only a few companies in the world, including MODEC, have the ultra-deepwater FPSO shipbuilding technology. In this project, MODEC built an ultra-deep FPSO unit with the capacity to produce up to 150 thousand barrels of crude oil and 280 million cubic feet of gas per day, and store about 1.6 million barrels of crude oil. CMV26 and a joint venture which was established mainly by an affiliated company of MODEC in Brazil provided charter services (leasing and operation and maintenance services) to Tupi B.V. for 20 years, at Iracema Norte oil field, owned by Petrobras and located 2,240 meters underwater 300km off the coast of Rio de Janeiro. Director Mogaki says that “JBIC received a formal request for the project financing in January 2013, and I assigned Miyaguchi to head the project, expecting this would develop his ability as it requires numerous coordination, while making use of JBIC experience of supporting the FPSO chartering service off the coast of Brazil participated by Japanese companies.” Deputy Director Miyaguchi says that “I myself had some experience in loans for FPSO business, but project financing for the FPSO chartering service was my first experience. JBIC has supported FPSO businesses for ultra-deepwater oil fields off the coast of Brazil, participated by MODEC, and this was the 6 th FPSO which JBIC would finance. I have pushed forward my work consulting with a predecessor and my superior, as sponsors expected the formulation of project financing in a short period of time with the JBIC experience.” In project financing, whether a long-term and stable cash flow can be secured is the key point in evaluating a project, since repayments are limited solely to cash flows generated by a project. Deputy Director Miyaguchi says that “Although the project is the accumulation of past experience, it is always evolving aiming for the most suitable form of business. As said, in the project this time, the developing company is virtually Petrobras, but the chartering company is Tupi B.V., the international consortium formed by Petrobras, the oil majors, a Chinese company and others. Also, the chartering service itself took a very complicated theme with CMV26 chartering through the newly established company which is co-invested mainly by MODEC’s subsidiary in Brazil. In addition, the details of the project financing have changed, from time to time, in After two months of hard work, the loan agreement was signed on March 29th. MODEC is now building the ultra-deepwater FPSO, which is expected to complete at the end of 2015. Miyaguchi says that “the Government of Japan plans the commercialization of methane hydrate and submarine hydrothermal polymetallic ore at the sea near Japan, under its ”Plan for the Development of Marine Energy and Mineral Resources.“ JBIC’s continuing support for FPSO chartering services by Japanese companies of the deepwater and ultra-deepwater oil fields off the coast of Brazil and West Africa will lead them to acquire and improve technolo- gies and knowhow regarding the operation of ultra-deepwater FPSO systems. I believe that it is important to strengthen the international competitive- ness of Japanese companies in the marine resources development sector. Also, the future development of marine resources at the sea near Japan is expected through the technologies. I would like to contribute to the maintenance and improvement of the international competitiveness of Japanese companies, utilizing my experience of participating in such projects.” JBIC signed a loan agreement as project financing in the amount of USD702 million (JBIC portion) with Cernambi Norte MV26 B.V. (CMV26), a company incorporated in the Netherlands in which MODEC, Inc. (MODEC), Mitsui & Co., Ltd., Mitsui O.S.K. Lines, Ltd., and Marubeni Corporation have equity stakes， in March 2013. The loan was cofinanced with private financial institutions, bringing the total cofinancing amount to USD1.17 billion, to support a project in which a long-term FPSO system chartering service in the Iracema Norte area of a pre-salt oil field off the coast of Brazil. JBIC signed a loan agreement in project financing in the amount of USD702 million (JBIC portion) with Cernambi Norte MV26 B.V. (CMV26), a company incorporated in the Netherlands in which MODEC, Inc. (MODEC), Mitsui & Co., Ltd., Mitsui O.S.K. Lines, Ltd., and Marubeni Corporation have equity stakes, in March 2013. The loan was provided to support a project in which a long-term FPSO *2 system chartering service to be offered by CMV26 to Tupi B.V., a consortium formed in the Netherlands by Petróleo Brasileiro S.A. (Petrobras), a state-owned oil company in Brazil, and others. *1: Tomoyuki Miyaguchi is now Deputy Director of Policy and Strategy Office for Financial Operations, Corporate Group. *2: A floating production, storage, and offloading (FPSO) system is a floating vessel for the first stage processing of crude oil produced at the oil well, which separates associated gas and water, and for the storage and offloading of oil. the middle of the formulating process with the requests of concerned parties, and I had to make every possible effort to investigate the influence on plural contracts thoroughly without exception as the changes took place.”
