Baker Hughes Awarded Contracts to Supply Petrobras with Flexible Pipe Systems, Associated Services across Several Fields

Rhea-AI Summary

Baker Hughes (NASDAQ: BKR) has secured significant contracts with Petrobras to supply 77 km of flexible pipe systems for Brazil's pre-salt fields. The multi-year project, signed October 15, 2024, includes risers and flowlines for hydrocarbon production and associated gas and water injection, with delivery starting mid-2026. The systems will be deployed across Petrobras' Búzios, Libra, Berbigão, Sururu and Sépia fields, addressing stress-induced corrosion cracking from CO2. The equipment will be manufactured at Baker Hughes' Niteroi plant in Brazil, supporting local employment and the energy supply chain.

Positive

• Secured major contract for 77 km of flexible pipe systems with Petrobras
• Additional Q3 2024 contracts for 69.1 km of flexible pipe systems
• Local manufacturing in Brazil strengthens market position
• Technological advantage in handling high CO2 concentration challenges

Negative

• Project delivery won't start until mid-2026, indicating delayed revenue recognition

Insights

Energy Industry Analyst

This significant contract win strengthens Baker Hughes' position in Brazil's lucrative pre-salt fields. The 77 km flexible pipe systems contract demonstrates the company's technological edge in handling high-CO2 environments, particularly addressing critical stress-induced corrosion challenges. The deal's strategic importance extends beyond immediate revenue, as it includes maintenance and installation services that provide recurring revenue streams.

The contract timing aligns with Petrobras' commitment to reduce CO2 emissions, positioning Baker Hughes as a key enabler of their environmental goals. The local manufacturing component in Niteroi provides a competitive advantage and helps secure future contracts. Combined with Q3's 69.1 km pipe systems contract and other service agreements, this represents significant market share growth in Brazil's offshore sector.

Supply Chain Analyst

The localization strategy through the Niteroi manufacturing facility represents a significant competitive moat. Local production capabilities reduce logistics costs, minimize supply chain disruptions and align with Brazil's local content requirements. This positions Baker Hughes advantageously for future tenders against competitors. The multi-year nature of the project, with deliveries starting mid-2026, provides stable revenue visibility and operational planning benefits. The facility's role in employing hundreds in Rio de Janeiro also creates political goodwill, potentially influencing future contract awards.

• Company to support projects in Brazil’s pre-salt fields, reinforcing position as a leading provider of flexible pipe for deepwater and high CO₂ projects
• Local manufacturing boost Brazilian economy, strengthen energy supply chain

HOUSTON and LONDON, Oct. 28, 2024 (GLOBE NEWSWIRE) -- Baker Hughes (NASDAQ: BKR), an energy technology company, announced Monday significant contracts with Petrobras to provide 77 km of flexible pipe systems to be deployed in Brazil’s pre-salt fields. The agreement was signed Oct. 15, 2024, following an open tender.

The multi-year project includes risers and flowlines for hydrocarbon production and associated gas and water injection with support for equipment storage, maintenance and installation. Delivery is scheduled to begin in mid-2026, and the equipment will be utilized across Petrobras’ Búzios, Libra, Berbigão, Sururu and Sépia fields.

These systems will also address the critical issue of stress-induced corrosion cracking from CO₂ (SCC-CO2), which can affect flexible pipes in pre-salt fields with high concentrations of the gas. Baker Hughes’ flexible pipes have proven effective at mitigating this issue, which can arise as gas is reinjected into wells to reduce flaring and enhance oil recovery. Petrobras has committed to limiting CO₂ emissions to the atmosphere in their operations, and CO₂ storage is an important tool for producing lower-carbon barrels.

“Brazil’s Santos Basin contains incredible potential to help power Latin America into the future,” said Amerino Gatti, executive vice president, Oilfield Services & Equipment at Baker Hughes. “Operating in deep waters with high CO₂ concentrations presents unique challenges. Baker Hughes’ combination of industry-leading subsea technology and engineering, expertise in offshore operations, and extensive experience in the region will assist Petrobras to unlock and develop this potential, delivering these vital resources safely and efficiently.”

Baker Hughes has been deeply involved in the development of Brazil’s offshore oil and gas fields for decades, and its localization strategy contributes to the nation’s economy while strengthening its energy supply chain. The company’s plant in Niteroi, Brazil, where these systems will be manufactured, is a major supplier of flexible pipe systems for the industry and employs hundreds of people in the state of Rio de Janeiro.

The company has announced several agreements with Petrobras throughout 2024, including additional contracts for 69.1 km of flexible pipe systems and associated services in the third quarter. Other awards have included integrated well construction services in the Buzios field and integrated solutions for workover and plug and abandonment services across Petrobras’ pre-salt and post-salt fields.

About Baker Hughes
Baker Hughes (NASDAQ: BKR) is an energy technology company that provides solutions to energy and industrial customers worldwide. Built on a century of experience and conducting business in over 120 countries, our innovative technologies and services are taking energy forward – making it safer, cleaner and more efficient for people and the planet. Visit us at bakerhughes.com.

For more information, please contact:

Media Relations

Brian Reynolds
+1 346-315-6663
brian.reynolds@bakerhughes.com

Investor Relations

Chase Mulvehill
+1 346-297-2561
investor.relations@bakerhughes.com

FAQ

What is the size of Baker Hughes (BKR) new contract with Petrobras in 2024?

Baker Hughes won contracts to supply 77 km of flexible pipe systems to Petrobras for Brazil's pre-salt fields.

When will Baker Hughes (BKR) begin delivering equipment for the Petrobras contract?

Delivery of the flexible pipe systems is scheduled to begin in mid-2026.

Which Brazilian oil fields will use Baker Hughes (BKR) flexible pipe systems?

The flexible pipe systems will be used across Petrobras' Búzios, Libra, Berbigão, Sururu and Sépia fields.

Where will Baker Hughes (BKR) manufacture the flexible pipe systems for Petrobras?

The flexible pipe systems will be manufactured at Baker Hughes' plant in Niteroi, Brazil.