Why Tendering Strategy Matters in Today’s Floating Production Market

The floating production market is becoming increasingly complex, and tendering strategy is no longer a routine step—it is a critical determinant of project viability and overall development success. The way tenders are structured directly influences project cost by shaping contractor competition and pricing dynamics. Imbalanced risk allocation often leads to inflated bids or limited participation, while poorly defined terms can transfer excessive financial, schedule, or operational risk to one party, increasing the likelihood of delays and cost overruns.

Recent experiences from Petrobras and ENI illustrate how contracting models and risk-sharing decisions can make or break project timelines and competitiveness.

What This Article Covers:

• Why tendering strategy now directly impacts cost, risk, and project success.

• Key procurement challenges illustrated by Petrobras’ recent FPSO tenders.

• How ENI’s flexible contracting approaches deliver faster, more competitive outcomes.

• The importance of balanced risk allocation in attracting bidders and controlling costs.

• How EMA helps operators design smarter, more resilient tenders.
  

Petrobras: Lessons from Brazil's Deepwater Challenges

Since 2020, Petrobras’ FPSO tendering process has delivered mixed outcomes. Out of 18 units tendered:

• 9 awarded (7 EPC contracts, 2 lease agreements)
• 5 cancelled
• 4 still in progress 
  
  

Half of these tenders attracted only a single bidder, and timelines from issuance to award have ranged from 8 months to 30 months, highlighting the complexity and competitive pressures in Brazil’s FPSO market. Three ongoing projects were initially tendered under the lease model but later shifted to BOT agreements after cancellations. These projects have faced repeated deadline extensions as contractors struggle to submit bids—underscoring the uncertainty in Petrobras’ procurement strategy.

ENI : Flexibility as a Competitive Advantage

ENI’s West Africa portfolio demonstrates how strategic flexibility can accelerate delivery and mitigate risk:

• Agogo FPSO: A converted VLCC awarded through competitive tender with three bidders; achieved first oil 29 months after FID, 12 months faster than the deepwater average.

• Baleine Development (Côte d’Ivoire): Phased approach combining redeployment and new-build solutions—Phase 1 used ENI-owned Firenze FPSO, Phase 2 leased Petrojarl Kong, and Phase 3 will introduce a new-build FPSO with 150,000 bpd capacity.

• Marine XII Gas Project: A diverse mix of units and contracting strategies, including purchased FLNG, leased FSU, newbuild FLNG, and redeployed semisubmersible rig—showcasing adaptability in complex offshore gas developments.

Key Takeaways

Tendering strategy shapes cost, risk, and competitiveness. Petrobras’ experience highlights how prolonged timelines and single-bid scenarios can drive uncertainty and cost escalation, while ENI demonstrates that flexibility—through conversions, redeployments, and mixed contracting approaches—can deliver faster, more resilient outcomes. Balanced risk allocation and strategic tendering are essential to attract bidders, control costs, and ensure timely execution in today’s challenging FPSO market.

How EMA Can Help 

Energy Maritime Associates (EMA) supports operators by:

• Providing market intelligence and benchmarking to optimize tendering strategies.

• Delivering real-time floating production project data and contractor performance insights through our Flowline platform.

• Offering strategic advisory services to design balanced tenders, mitigate risk, and accelerate timelines.

With EMA’s expertise, operators can navigate complexity, improve competitiveness, and achieve successful project delivery.

📩 Get in touch:

eric.sherman@energymaritimeassociates.com