Petrobras Deploys new production ship in Lula field

A new oil and gas production ship arrived in the Iracema Norte area of the Lula field, Petrobras said on Friday, a key step in efforts by the Brazilian state-run oil company and its partners to boost output from one of the country's most prolific areas.

The ship, the FPSO Cidade de Itaguaí MV26, has the capacity to produce as much as 150,000 barrels of oil and 8 million cubic meters (282 million cubic feet) of natural gas a day, Petroleo Brasileiro SA, as Petrobras is formally known, said in a statement.

Production is scheduled to start in the third quarter.

The Lula field is 65 percent owned by Petrobras, which is also the field operator, 25 percent by Britain's BG Plc, and 10 percent by Portugal's Galp Energia SGPS SA (GLPEY). BG is in the process of being purchased by Royal Dutch Shell Plc (RYDAF) .

The ship, whose hull was converted from a VLCC-class oil tanker by Chinese shipyard Cosco, was fitted with oil processing equipment in Brazil. The ship was converted and leased for 20 years to Petrobras by a joint venture between Brazilian engineering company Schahin and Japan's Modec .

The ship can hold 1.6 million barrels of oil before requiring a relief tanker to offload the production for transfer to shore.  

(Reporting by Jeb Blount; Editing by Eric Walsh)