Brazil/ Loan Insurance for Petrobras in relation to the FPSO Hulls Project
Nippon Export and Investment Insurance
Nippon Export and Investment Insurance (NEXI) has decided to provide insurance for loans in relation to engineering, procurement and construction (EPC) contracts for the construction and conversion of hulls for floating production, storage and offloading units (FPSOs) by Petroleo Brasileiro S.A. ("Petrobras") of Brazil.
The loan agreement and the supplemental agreement regarding NEXI insurance underwriting in relation to this Project were signed between Petrobras, its subsidiary, Mizuho Bank, and NEXI on August 1, 2014, on the sidelines of a summit between Japanese Prime Minister Mr. Shinzo Abe and Brazilian President Ms. Dilma Rousseff.
Petrobras through its subsidiaries has placed an order with EEP (Note 1) and ECOVIX-Engevix (Note 2), Japanese-affiliated ship builders operating in Brazil for 12 FPSO hulls to be located in the offshore oilfield in Santos Basin pre-salt layer. Construction of these hulls for the FPSOs is underway at the two shipyards.
The Japanese shareholders of EEP and ECOVIX-Engevix including Kawasaki Heavy Industries (KHI) and Mitsubishi Heavy Industries (MHI) have made a full-scale entry into the Brazilian shipbuilding market by investing in local shipbuilders and providing technologies and human resources. They are especially focusing on business with Petrobras that has a strong demand for FPSOs and drill ships. In this context, this loan agreement with Petrobras is significant in contributing to strengthening and expansion of Brazilian shipbuilding business by Japanese shipbuilders.
NEXI has supported strong ties with Petrobras and promoted Japanese business with the company. In July 2008, NEXI and Petrobras signed a memorandum of understanding for project cooperation. Also in July 2013, NEXI signed a line of credit undertaking which provides for NEXI insurance conditions for commercial bank financing under a credit line agreement between Petrobras, Japan Bank for International Cooperation (JBIC) and Mizuho Bank, Ltd. as the agent. Through NEXI's loan insurance for the Petrobras project, Japanese companies will strengthen cooperative ties with Petrobras. NEXI's support is also expected to encourage Japanese business with Brazil and ties between Japan and this resource-rich country.
NEXI will continue to support the expansion of overseas business by Japanese companies.
| Japanese lender (Insured) | Mizuho Bank, Ltd. |
| Insurable value | USD 500 million |
| Tenor | Approx. 12 years |
(Note 1) KHI acquired 30% EEP shares in 2012.
(Note 2) A consortium of MHI, Imabari Shipbuilding Co., Ltd., Namura Shipbuilding Co., Ltd., Oshima Shipbuilding Co., Ltd., and Mitsubishi Corporation acquired a 30% stake of ECOVIX-Engevix in 2013.