Notice

FPSO Cidade de Saquarema, Brazil

Published 4 December 2015

© Crown copyright 2015

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1. Description of project

UK Export Finance has agreed to provide reinsurance to Atradius, the Dutch Export Credit Agency, in respect of the supply of goods and services by a number of UK-based exporters to Single Buoy Moorings Inc (SBM), the Engineering, Procurement and Construction (EPC) contractor for the construction and operation of a Floating Production, Storage and Offloading (FPSO) vessel Cidade de Saquarema (the Project). The Project includes:

  • Construction (refurbishment and conversion of the FPSO, fabrication of the mooring system, modules, and topsides, and final integration) carried out at Chengxi shipyard in China, Singpapore, and the Brasa shipyard in Brazil. The supplies from the UK relate to the construction of the FPSO; and

  • Operation of the Saquarema in the Lula oilfield offshore Brazil.

SACE, the Italian Export Credit Agency, is also providing reinsurance to Atradius.

2. Project sector

The Project is in the oil and gas sector.

3. Project sponsor

SBM

4. UK exporters

Approximately 40 UK suppliers as sub-contractors to SBM.

5. Export credit agent bank

ING Bank NV.

6. Amount of UK Export Finance support

The principal value of the support is approximately US$50 million.

7. OECD Common Approaches

Atradius, supported by UK Export Finance and SACE, classified the Project as Category A (having potentially significant environmental, social and human rights (ESHR) impacts) in accordance with the definition in the 2012 OECD Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the OECD Common Approaches).

As required by the OECD Common Approaches, UK Export Finance disclosed its possible involvement in the Project. This notification was posted on the UK Export Finance web site on 2nd March 2015, which directed interested parties to the contact from where published environmental information can be sourced. UK Export Finance did not receive any comments from Interested Parties.

Environmental Resources Management (ERM) was commissioned by the Global Coordinating Bank, ING Bank, to undertake an independent environmental and social due diligence review on behalf of the Lender group/ECAs.

8. ESHR standards

Project related ESHR documentation and information including the operational phase Environmental Impact Assessment (EIA) were reviewed for their alignment against the 2012 IFC Performance Standards on Environmental and Social Sustainability and the World Bank Group Environmental, Health and Safety (EHS) Guidelines. The applicable Performance Standards and World Bank Group EHS Guidelines were:

  • PS1: Assessment and Management of Environmental and Social Risks and Impacts;
  • PS2: Labour and Working Conditions;
  • PS3: Resource Efficiency and Pollution Prevention;
  • PS4: Community Health, Safety and Security;
  • PS5: Land Acquisition and Involuntary Resettlement;
  • PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources;
  • PS7: Indigenous Peoples;
  • PS8: Cultural Heritage;
  • World Bank Group Environmental, Health and Safety (EHS) Guidelines as follows:
    • General EHS Guidelines (2007);
    • Sector Guidelines for Off-shore Oil and Gas Development (2007);
    • Sector Guidelines for Shipping (2007); and
    • Sector Guidelines for Ports, Harbours and Terminals (2007).

9. Nature of ESHR impacts

The review of potential ESHR risks and impacts took into account the following impacts, receptors and issues during the construction and operational phases of the Project:

  • health and safety;
  • emissions to the atmosphere (including land, air and water);
  • wastewater treatment;
  • waste and hazardous material management;
  • marine habitats;
  • worker conditions of contract;
  • community engagement;
  • grievance mechanisms; and
  • emergency planning and response.

10. Assessment of ESHR impacts

ERM reviewed project related ESHR documentation and information, met with SBM and undertook site visits to the Brasa shipyard in Brazil and Chengxi shipyard in China.

Taking account of ERM’s review, the Project was deemed to have potential to cause a number of adverse environmental and social impacts both during construction and operation. However, a proposed suite of controls as part of the Project’s environmental and social management systems should facilitate the management of these impacts.

11. Decision

After taking account of the review undertaken by UKEF’s environmental practitioners, it was concluded that the Project should meet the relevant international standards. UKEF therefore decided to provide reinsurance to Atradius in respect of the UK supplies to the Project.

A condition of support is that the Project will be subject to monitoring and reporting by ERM and SBM, so UKEF can be satisfied that the Project is aligned with the relevant international standards throughout the duration of the reinsurance period.

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