UP Offshore (Bahamas) Limited

completed

The project consists of the acquisition of up to 10 new and second-hand offshore platform supply vessels (PSV) in order to provide supplies and services to oil and gas companies engaged in exploration and production activities (E&P) on the Brazilian Atlantic shelf. New PSVs will be built both in Brazil and overseas; these PSVs are most in demand for the deep and ultra-deep waters currently being explored off the coast of Brazil. Brazilian flagged vessels that are to be built in Brazil will be held in a Brazilian subsidiary of the project company, while vessels acquired internationally will be held through a Panamanian subsidiary and chartered to the Brazilian entity.Liberalization of the Brazilian oil and gas industry in 1998 and increasing E&P activities off the Brazilian Atlantic coast create a large market for services to offshore oil and gas platforms. These services include transportation of personnel, equipment and various supplies as well as anchor handling, towing, and line handling, and are typically performed by specialized vessels at all stages of the E&P activities. By specialization, offshore supply vessels ("OSV") are categorized into (i) anchor handling, tow and supply vessels, (ii) line handling vessels, (iii) crew boats and (iv) PSVs. PSVs are involved in providing offshore drilling and production facilities with various supplies including equipment, pipes, lubricants, chemicals and drilling mud. They can also perform fire fighting as well as oil recovery operations in case of an oil spill at an offshore platform. The demand for PSVs operating at the Brazilian coast is estimated to double by 2005 from the present level of around 30 vessels. The Project will focus on the PSV segment of the market where there is a greater need for modern vessels and more potential for differentiation from competitors.By investing in this project, IFC would be supporting Brazil’s efforts to beneficially exploit deep water natural resources important for economic growth, facilitating the provision of private infrastructure services and supporting private sector activity in the Brazilian shipping and shipbuilding sector.