Two sources familiar with the matter have confirmed that Brazil's state oil company Petrobras may cancel a tender for a production, storage and offloading vessel from India's Shapoorji pallonji Energy.

Sources claim that the state-run company believes the Indian shipbuilding firm's bid of $1.5 million per annum is too high and complains about the FPSO not having enough parts made in Brazil.

According to one person, a final decision will be made soon on this matter.

Petrobras stated that the bid process was "still in progress" without adding any more comments. Shapoorji Pallonji Energy didn't immediately respond to an outside-of-working hours request for comments.

The Shapoorji vessel could produce up to 100,000 barrels per day of oil and 6 million cubic metres of gas. It has been in the process of being contracted since August 2023.

The Brazilian President Luiz inacio Lula da So has prioritized the nation's shipbuilding industry. As part of this, Petrobras is focusing on using local ships and creating jobs locally. (Reporting and writing by Rodrigo Viga Gaier, Editing by Gabriel Araujo & Susan Fenton).

(source: Reuters)