Brazil Orders $30 Billion In New Drill Ships and Rigs

May 21st, 2008 · Comments - by tim -

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Petrobras, which today passed GE as the worlds fifth largest company, placed an order for $30 Billion in new Drill Ships and Rigs.

For more on this story head over to Bloomberg.com

Petroleo Brasileiro SA, 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 3 kilometers (1.9 miles) deep, Petrobras, as the Rio de Janeiro-based company is known, said in a statement yesterday. 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 the 5-billion-to-8-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.

“Building all the ships Brazil wants to build will likely be a challenge,” Judson Bailey, a shipping and oil analyst with the Houston office of Jefferies & Co., an investment bank, said in an interview. “There is a shortage of almost everything in the offshore industry.”

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