OGX signs agreement for FPSO OSX1

Brazil's largest independent oil and gas company OGX Petróleo e Gás Participações S.A. signed a preliminary strategic cooperation agreement with OSX Brasil S.A. for the charter of the Floating Production Storage Offloading (FPSO) vessel OSX 1 for work offshore Brazil.

The agreement to lease the FPSO OSX 1 is for a period of 20 years at a rate of $263,000 a day, which includes any related operational and maintenance services. Built in the Samsung Heavy Industries shipyard, the FPSO OSX 1 has a daily production capacity of 80,000 barrels of oil, which is expandable to 100,000 barrels of oil, and a storage capacity of 950,000 barrels of oil. The FPSO OSX 1 is scheduled to begin production by 2011.

“Our drilling results have revealed a new oil province in the southern part of the Campos basin and broken paradigms regarding the quality and potential of the reservoirs in this area,” said Mr. Eike Batista, CEO and Chairman of OGX.

Furthermore, OSX agreed to support the long-term demand for equipment and production services of OGX. The agreement provides for a first negotiation for the construction of production units in Brazil, as well as the charter and operation of the facilities by OSX. Under the agreement, the equipment must be provided at a competitive rate.

The company plans to reach a production target of 1.4 million barresl of oil equivalent a day by 2019, and the equipment needed to acheive this production rate includes 19 FPSO, as well as other production equipment.

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