Shapoorji Pallonji Energy Appeals To Brazil On Petrobras-Canceled Tender

India’s Shapoorji Pallonji Energy is appealing directly to the Brazilian government after state-run Petrobras canceled a tender for construction of an oil production platform.

A delegation for the offshore infrastructure company was in Rio de Janeiro and the capital Brasilia last week as it seeks to reverse Petrobras’ decision, said a person familiar with the matter who asked not to be named discussing private information.

The move escalates disagreements between the companies, with India’s embassy following the situation, the person said. The countries are part of the BRICS economic and political coalition, and Petrobras is seeking to develop closer ties with India.

Petrobras called off the tender to charter a floating production storage and offloading vessel (FPSO), claiming a change in economic viability, the firm’s head of engineering, Renata Baruzzi, said in late February. The company is now weighing whether to reopen bidding for the FPSO while adopting the build-operate-transfer format, in which the contractor builds the vessel and operates it for years before the client takes it over, she added.

The decision to cancel the tender surprised the Indian platform builder, the sole bidder in a process started in August 2023. Shapoorji presented a new offer on March 16 to match Petrobras’ last price in a bid for the Barracuda/Caratinga FPSO charter, the person said, adding that the firm is considering taking legal action to block a new tender if Petrobras calls off the deal.

Petrobras said in a statement that the tender was revoked in accordance with the law and that the result of an appeal will be announced soon. Brazil’s mines and energy ministry referred questions on the matter to Petrobras.

Shapoorji is seeking a solution “that aligns with both Petrobras’ strategic goals and Brazil’s national interests,” the company said in an emailed statement. The project represents a significant investment commitment and will “enhance the economic and strategic ties between India and Brazil,” it added.