(The JV partner is W Torre Empreendimentos Imobiliarios, WTorre, a large and established group with expertise and capabilities in civil and engineering infrastructure development in Brazil. And the shipyard is located in the southern Brazilian city Rio Grande, which will have a dry dock that is to be the largest and the first purpose-built facility to be built in Brazil in 30 years.)
Semb Marine had on Oct 1st ’07 signed a MOU with WTorre to own and operate the yard. There has been no indication as to the status of this MOU.
The new shipyard project is particularly significant, given the imminent closing of Petrobras’ tender for the hull construction of 8 Floating Production Storage & Offloading vessels (FPSOs), as the massive Tupi oil field (with estimated 5-8 bln barrels of oil reserves) gears up to commence production. Brazil’s oil reserves stand at 12.6 bln barrels, ahead of Mexico, but well behind Venezuela in Latin America.
While the final outcome is still unclear, the latest news is likely to boost sentiment in Kep Corp shares, and unfortunately the reverse, at least in the short- term, for Semb Marine.
We have a BUY on both stocks. (Both companies count Petrobras as one of their key customers. In fact, Semb Marine, which has been in Brazil since 1997, has converted the most number of vessels for Petrobras: 6 FPSOs, I FPU and 2 FSOs. KOM, on the other hand, delivered the P-51 FPU to Petrobras in Nov ’08, the second after the P-52, and to be followed by P-56 that it is currently working on.)
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