GE, Petrobras sign largest-ever subsea wellhead deal

PHOTOGRAPHER: The Associated Press

RIO DE JANEIRO — General Electric has signed a $1.1 billion contract with Brazil’s state-run oil company Petrobras to provide offshore equipment, the largest-ever deal of its kind.

GE says in a statement today that the contract includes delivery of about 380 sub-sea wellhead systems and installation tools needed in oil well exploration. The company emphasized that 75 percent of the parts will be made in Brazil.

It’s part of the Petrobras push to develop some of the largest oil finds discovered in recent decades. The reserves off Brazil’s southeastern coast are thought to hold at least 50 billion barrels of oil in hard-to-reach deep waters.

U.S.-based GE says the contract builds upon its existing relationship with Petrobras. In 2009 GE signed a $250 million contract to supply Petrobras with sub-sea wellheads.

GE has swelled into a subsea technology giant since the acquisitions of the offshore oil field production equipment supplier VetcoGray in 2007 and the purchase of the pipeline manufacturer Wellstream in 2011. GE’s subsea technology business now employs 5,000 people in 50 countries. GE workers have installed 1,200 wellhead systems, including 180 systems off the coast of Brazil.

Petrobras is one of the world’s largest energy companies. The company operates wells, pipelines and refineries in 27 countries on five continents. Petrobras is a world leader in deep water and ultra-deep water oil production. It operates approximately 100 production platforms, 15 refineries, 30,000 kilometers of pipelines and more than 6,000 service stations.

GE announced the awarding of the contract at the 2012 Rio Oil & Gas being held this week in Rio de Janeiro.