Galp Energia CEO Manuel Ferreira De Oliveira. Image courtesy of Galp Energia.

Galp Energia said Tuesday that four offshore Brazil projects could face at least a year long delay due to an ongoing corruption probe into Brazil’s Petrobras.

Galp warned that construction on production ships for the Petrobras operated Lula Sul, Lula Norte, Lula Extremo Sul and Lula Oeste fields may be delayed by a year, Reuters said.

“We have assumed on average a one-year delay in the pre-salt projects,” Galp CEO Manuel Ferreira De Oliveira told investors.

Portuguese-based Galp is currently involved in nearly 30 offshore and onshore oil and gas projects in Brazil.

“We’ve looked unit by unit at the state of development and conditions of the subcontractors. This was a deep exercise that the company did for itself and the level of uncertainty is still high and we are fully confident that we are conservative to say that on average we see a one-year delay,” De Oliveira said.

The delays could push back a planned 600,000 barrel per day output capacity boost at offshore block BM-S-11 that holds the Lula and Iracema fields.

State owned Petrobras holds a 65 percent operating interest in block BM-S-11.

UK-based BG Group holds a 25 percent interest and Brazil-based Petrogal Brasil, a Galp subsidiary, holds a 10 percent interest.

Lula is currently in test production and produced 278,000 bpd of oil and 12.1 million cubic meters of gas per day in January, Brazilian regulators said.

Galp’s P-66 FPSO for the Lula field and its P-67 rig for the Lula Norte field are now expected to go onstream in 2017.

The company’s P-68 and P-69 floaters, also set to work in block BM-S-11, are now scheduled to start production in 2018.

Brazilian prosecutors allege that employees at Petrobras conspired with engineering and construction companies to inflate the value of deals and skim off excess funds.

The scale of the corruption is still unknown although Brazilian authorities have claimed kickback and bribery schemes could have diverted anywhere between $3.7 billion to $28 billion from the company.



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