Delay in Dismantling FPSO Threatens Brazil’s Shipbuilding Revival

A dispute between state-run oil company Petrobras and steelmaker Gerdau has caused a delay in the dismantling of an oil production vessel in Brazil by at least a year, according to sources familiar with the matter. This setback is a blow to local shipyards, as the operation was seen as an opportunity to revitalize Brazil’s struggling shipbuilding industry by transforming them into industrial recyclers. Petrobras had planned to retire 10 similar ships in the next five years, with a budget of $9.9 billion.

The vessel in question is a 45,000-ton production, storage, and offloading vessel (FPSO) named P-32, which was supposed to complete its decommissioning by December 2024 under a new Petrobras sustainability program. However, the work only began last month, as reported by Benito de Oliveira Goncalves, the head of a local metalworker’s union in Rio Grande do Sul state. The dispute between Petrobras and Gerdau, revolving around the removal of petroleum residues from the vessel, has halted progress for over a year.

The delay in dismantling the FPSO P-32 is a significant setback for Brazil’s shipbuilding industry, which was hoping to leverage this operation to create jobs and boost the economy. The conflict between Petrobras and Gerdau has not only disrupted the decommissioning timeline but has also raised concerns about the future of similar projects. Despite the challenges, efforts are being made to resolve the dispute and resume work on the vessel to meet the decommissioning deadline.

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