Restructuring McDermott Scoops Brazilian Transport and Install Award
The contractor will transport and install pipeline related to the Wahoo development in the Campos Basin.
McDermott has won a transportation and installation contract by PRIO (former PetroRio) for the Wahoo field, offshore Brazil. Under the scope of the contract, the contractor will perform the transportation and installation of approximately 30 km of coated 10-in. rigid pipelines and associated subsea structures. Once installed, the pipelines will connect the Wahoo field to the Frade FPSO. The contract also includes an extension option for a second pipeline.
“This award is a reflection of our offshore installation expertise in the region," said Mahesh Swaminathan, McDermott’s senior vice president, subsea and floating facilities. “Our proven track record in subsea installations, state-of-the-art vessels, technical expertise, and collaborative approach positions us well for the successful delivery of this project.”
The Wahoo field is located about 30 km north of the already-producing Frade field in Brazil's Campos basin.
McDermott's team in Rio de Janeiro will oversee project management and engineering. The installation activities will be performed by one of McDermott’s rigid pipelay vessels.
PRIO submitted a development plan to the National Petroleum Agency, Natural Gas and Biofuels (ANP) in December 2021 that would create a production cluster through the tieback between the Wahoo and Frade fields.
PRIO said in July it had brought on stream the ODP5 (F23P3) well in the Frade field, with initial production of approximately 8,000 B/D of oil.
The transport and installation contract award comes just weeks after McDermott launched a restructuring bid to strengthen its short-term liquidity and secure its long-term financial health.
The company entered into a transaction support agreement with more than 75%, in aggregate, of its secured letter of credit providers, funded debt creditors, and equity holders to initiate the process. Additionally, it received $250 million in new capital from a group of its existing equity holders, which will support its ability to operate its business, deliver on existing projects, and expand its backlog with new client projects.
Under the terms of the agreement, McDermott will amend and extend its term loans and letter-of-credit facilities for 3 years, through mid-2027, with no change in pricing, increase the company's liquidity, and discharge certain legacy legal liabilities.
"We intend to continue all operations as normal as we move through these processes, including continued delivery on our client projects," said Michael McKelvy, president and CEO of McDermott.
McDermott is celebrating its 100-year anniversary this year.