ocean rigSAO PAULO–Brazilian government-run oil company Petroleo Brasileiro SA (PBR, PETR4.BR) on Thursday said it has canceled plans to hire five drilling rigs from Norway’s Ocean Rig UDW Inc. (ORIG, OCRG.NO).

Petrobras said it won’t need as many rigs as it had initially expected, because it won’t have to drill as many wells due to “higher productivity gained through the project wells,” Petrobras said in a statement.

The rigs had been slated to operate in the Brazilian subsalt areas, where massive oil reservoirs have been discovered in recent years. The oil is located off Brazil’s southeast coast, beneath deep Atlantic Ocean waters and several kilometers of rock-bed, including a thick layer of salt.

The five Ocean Rig drilling rigs were to be capable of drilling in up to 3,000 meters of water, Petrobras said.

- Matthew Cowley, (c) 2012 Dow Jones & Company

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