Brazil gets corner on market for deep rigs
May 16, 2008
By Joe Carroll
Houston - Petroleo Brasileiro (Petrobras), Brazil's state-controlled oil company, has leased about 80 percent of the world's deepest drilling offshore rigs to explore prospects including the western hemisphere's biggest discovery in decades.
Petrobras was hiring rigs that could drill in at least 3 000m of water, chief executive Jose Sergio Gabrielli said in an interview last week.
The world has 21 such vessels, according to Rigzone.com, which tracks the offshore drilling industry.
The company's "insatiable" demand was forcing producers including Exxon Mobil and BP to pay more as they competed for the remaining units, said Kjell Erik Eilertsen and Truls Olsen, analysts at Fearnley Fonds in Oslo.
Explorers without rigs under contract may delay projects or pay rent of more than $600 000 (R4.5 million) a day.
"The oil majors have their backs against the wall as Petrobras has aggressively locked up significant rig capacity," said Omar Nokta, the head of maritime research at Dahlman Rose in New York.
Petrobras was negotiating for as many as 17 more vessels to probe the Tupi discovery and neighbouring fields, said Bill Herbert, an analyst at Simmons International in Houston.
The company already controls almost seven times as much capacity as the next-biggest user of rigs that can drill in 2 300m of water, according to research by Dahlman Rose.
US and European oil companies probably would pay $50 000 more a day to lease deepwater rigs during the next three years because Petrobras had already contracted for so much of the worldwide fleet, Nokta said. Such units were designed to bore beneath the sea floor and identify oil and gas deposits as much as 10km below the ocean surface.
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