Dutch maritime engineering company IHC Caland is in exclusive talks to land a leasing deal with Brazil's Petrobras that could be worth about 500 million euros ($631.6 million), the company said on Friday.

It said the contract for subsidiary SBM to lease a floating production, storage and offloading unit (FPSO) for the development of the Golfinho field in the Espirito Santo basin of offshore Brazil would start in the first quarter of 2006 and last 7 years.

"Following this opening Petrobras has, in accordance with their tendering procedures, invited SBM for discussions to finalize the contract documentation," IHC Caland said in a statement.

SBM has signed two other contracts with Petronas Carigali in Turkmenistan and Indian Oil Corporation, bringing the total portfolio value of the projects to $725 million, IHC Caland said.

IHC Caland shares, which were already up after trade magazine Upstream reported that SBM was the only remaining bidder for the Petrobras contract, rose further to a new 52-week high of 45.30 euros after the company's confirmation.

At 1232 GMT, the stock was the biggest gainer among the Amsterdam exchange's largest stocks, up 4.8 percent at 45.24 euros.

"This sounds like a sizeable contract... It removes worries that IHC was losing its competitive edge," said Paul Andriessen, analyst at SNS Securities in Amsterdam.IHC Caland's SBM already supplies Petrobras with three FPSO's.

The company, which builds and operates offshore loading and unloading systems for oil companies, had net turnover of 1.85 billion euros in 2003.

A Typical FPSO deal is worth between $300 and $600 million and IHC Caland Chief Executive Didier Keller said in August he was hoping to score one such contract this year and two more next year.

(From Reuters, October 22, 2004)

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