Business | Oil & Gas
Petrobras to order $30b of drill ships
Petroleo Brasileiro, owner of the Western Hemisphere's largest oil discovery in three decades, plans to order 40 drilling ships and platforms worth about $30 billion for delivery by 2017.
- Bloomberg
- Published: 00:07 May 22, 2008
Rio de Janeiro: Petroleo Brasileiro, owner of the Western Hemisphere's largest oil discovery in three decades, plans to order 40 drilling ships and platforms worth about $30 billion for delivery by 2017.
The deep-water drilling ships and semi-submersible rigs will explore for oil and gas in seas up to three kilometres deep, Petrobras, as the Rio de Janeiro-based company is known, said in a statement.
The vessels cost about $750 million each, said J. Michael Drickamer, an oilfield service company analyst at Morgan Keegan & Co. in Memphis, Tennessee.
Petrobras, Brazil's state-controlled oil producer, plans to spend $112 billion through 2012 to help increase its oil and natural gas production and expand its refining and distribution operations. The discovery of five-billion to eight-billion-barrel Tupi field and the possibility of other large fields nearby, may require even more spending on offshore equipment, according to chief financial officer Almir Barbassa.
Challenge
"Building all the ships Brazil wants to build will likely be a challenge,'' said Judson Bailey, a shipping and oil analyst with Jefferies & Co. , an investment bank, in an interview. "There is a shortage of almost everything in the offshore industry.''
Foreign companies already in Brazil building ships include Singapore's Keppel and Sembcorp Marine, Galliano, Louisiana-based Edison Chouest Offshore, and Oslo-based Aker Yards. Brazilian companies include construction companies Construtora Camargo Correa, Construtora Queiroz Galvao, Grupo Wilson, Sons, and Construtora Norberto Odebrecht.
Yards in South Korea and Singapore, the world's two biggest offshore vessel-building nations, are also adding new docks and extending the lengths of existing ones to work through order backlogs that stretch to 2012.
Crude oil has risen 95 per cent in the past year and surpassed $130.00 a barrel yesterday. Concerns that oil supplies are lagging behind demand have boosted prices and investors have also bought the commodity as a hedge against the weakening dollar.
Daewoo Shipbuilding & Marine Engineering, the world's third-largest shipyard, submitted a bid to Petrobras to supply drill vessels and semi-submersibles on April 10, Lee Jae Ha, vice-president of Daewoo Shipbuilding's offshore marketing, said.
"We expect very good results from the bidding,'' Lee said.
"Once they start drilling for oil, there will be demand for offshore production facilities, which Daewoo Shipbuilding is also interested in.''
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