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Saipem faces restrictions on new contracts in Brazil due to the ban on contracting with the public administration, a final decision.
Saipem, an Italian engineering, drilling and construction services company, is facing problems closing new contracts in Brazil due to the restriction on carrying out new negotiations with the country's public administration In the next years.
The Brazilian company, Saipem do Brasil, is being investigated by the Comptroller General of the Union (CGU) for alleged irregularities in the award of a contract for the installation of a gas pipeline, dated December 2011, by the BM-S-11 consortium. The CGU's final decision was issued on January 12, 2024, limiting Saipem's options in the Brazilian market.
Saipem: Italian engineering, drilling and construction services company
According to the Italian player, the CGU changed its previous provisional decision, which consisted of prohibition of contracting with public administration Brazilian issued on December 29, 2022, and replaced it with a ‘temporary’ suspension limited to a period of two years.
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‘The reclassification of the sanction was also obtained thanks to the recognition by the same CGU of the effectiveness of the compliance model of the two companies. The sanction has no impact on ongoing projects in Brazil, as it only applies to potential new contracts and concerns exclusively negotiations with the public administration’, explained the Italian provider of engineering, drilling and construction services.
However, Saipem and Saipem do Brasil are determined to appeal the decision, which they consider 'inconsistent' with what the companies demonstrated during the process.
New offshore contracts and recent sales
Saipem has secured several new deals in 2023. At the end of November 2023, the Italian giant achieved two new offshore contracts worth approximately US$1,9 billion to work with ExxonMobil in Guyana and Equinor in Brazil.
Before that, the company gained a award letter (LOA) multi-billion dollar with ADNOC of the United Arab Emirates, in consortium with the National Petroleum Construction Company (NPCC). The Italian giant also recently sold an FPSO vessel, which is operating in the Espírito Santo Basin, off the coast of Brazil.
Source: © OFF Shore Energy
