The contract involves the conversion of the Navion Norvegia shuttle tanker to an FPSO that includes detailed engineering, installation and integration of topside modules, installation of external turret and power generation, accommodation upgrading as well as extensive piping and electrical cabling works.

Scheduled for completion in the third quarter of 2016, the FPSO will have the capacity to produce 50,000 barrels of oil per day and 4 million cubic metres of natural gas per day, and is expected to be chartered to Petrobras for work on the Libra field in the ultra-deepwater section of Brazil’s Santos Basin.

Operating as an early well-test unit, the FPSO will be on a 12-year charter once it begins its contract in late 2016.

Mr William Gu, General Manager of Jurong Shipyard’s Offshore Division, said: "We are pleased that Odebrecht Oil & Gas and Teekay have chosen Jurong Shipyard as their strategic partner. The conversion work will be done at our Sembmarine Integrated Yard @ Tuas which will soon commence work on its first FPSO conversion project. We would like to thank Teekay and Odebrecht Oil & Gas for their trust and confidence in Jurong and our new state-of-the-art facilities and capabilities."

Mr Jorge Luiz Mitidieri, Vice President of Odebrecht Oil & Gas said: "Petrobras decision to appoint our joint venture with Teekay Offshore as the leading consortium to develop the Libra field reaffirms the longstanding relationship and trust developed throughout the last years with Petrobras. Our proven track record in the operation of offshore oil & gas assets is key to the success of the project and we are happy to select Jurong Shipyard and the new Tuas facility as the choice partner and location for the job."

Mr Peter Evensen, Chief Executive Officer of Teekay Offshore said: "We are happy to be working with both Odebrecht Oil & Gas and Jurong Shipyard on the Libra FPSO conversion project. In fact, this will be our second FPSO project for our joint venture with Odebrecht Oil & Gas which underlines the success of our partnership over the years. We are pleased to be at the forefront of this new phase of Petrobras’ development into deeper and more challenging waters, providing the necessary skills, tools and the best solutions to Petrobras for the tasks ahead."

Petrobras had nominated Teekay Offshore and Odebrecht Oil & Gas’s 50/50 joint venture as the lead commercial bidder on the Libra project. The FPSO unit is expected to be owned and operated by the joint venture company and will service the Libra pre-salt field in the Santos Basin offshore Brazil, which is expected to start operations in late 2016.

The block covers approximately 1,550 square kilometres in water depths of around 2,000 meters (6,500 feet). The reservoir depth is around 3,500 meters below the sea floor (11,500 feet). Brazil’s ANP has estimated that total gross peak oil production could reach 1.4 million barrels per day.

The contract is not expected to have any material impact on the net tangible assets and earnings per share of Sembcorp Marine for the year ending December 31, 2014. Including the above mentioned contract, Sembcorp Marine’s new contracts secured year-to-date stands at S$3.7 billion.