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Saipem Faces Restrictions for New Contracts in Brazil Due to Prohibition on Contracting with Public Administration, Final Decision.
Saipem, an Italian engineering, drilling and construction services company, is facing challenges in securing new contracts in Brazil due to the restriction on engaging in new negotiations with the country’s public administration in the coming years.
The Brazilian company, Saipem do Brasil, is under investigation by the Comptroller General of the Union (CGU) for alleged irregularities in awarding a contract for the installation of a pipeline dated December 2011, by the consortium BM-S-11. 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 altered its previous provisional decision, which consisted of the prohibition on contracting with the Brazilian public administration 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 achieved thanks to the acknowledgment by the same CGU of the effectiveness of the compliance model of both companies. The sanction does not impact ongoing projects in Brazil, as it only applies to potential new contracts and exclusively concerns negotiations with the public administration’, explained the Italian engineering, drilling, and construction services provider.
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 secured several new deals in 2023. At the end of November 2023, the Italian giant obtained two new offshore contracts valued at approximately US$ 1.9 billion to work with ExxonMobil in Guyana and Equinor in Brazil.
Prior to this, the company won a letter of award (LOA) worth billions 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
