Brazil's Kingfish Places $732 Million Newbuild Order for 11 Tankers

RIO DE JANEIRO (Dow Jones)–Brazilian oil field services company OSX Brasil S/A (OSXB3.BR), part of Brazilian businessman Eike Batista’s industrial empire, said Monday that it had received a $732 million order to build 11 medium-range tanker ships for Kingfish do Brasil Navegacao.

OSX will build the ship at its Acu port complex, which is under construction in northern Rio de Janeiro state, the company said. OSX’s Acu port complex is part of a rebirth for Brazil’s shipbuilding sector, with demand for ships and oil field equipment soaring due to development of recently discovered reserves off the country’s coast. Brazil was once one of the world’s largest shipbuilding countries before an economic downturn in the 1980s caused the sector to nearly shut down.

The oil field services company is branching out from its initial role to build vessels for sister company OGX Petroleo e Gas Participacoes S/A (OGXP3.BR, OGXPY). OSX will build two production platforms, OSX-4 and OSX-5, known as FPSOs, or floating production, storage and offloading vessels.

OSX recently secured a contract to build a pipe-laying vessel for Sapura Seadrill.

Also, Sete Brasil, a drill-rig holding company, said last month that it was in talks with OSX to build two drilling rigs at the Acu shipworks. The rigs are part of the massive 21-vessel order from state energy company Petroleo Brasileiro S/A (PBR, PETR4.BR), or Petrobras, that Sete Brasil won in February.

“Fourteen naval construction projects now compose the work plan for OSX’s team at our Acu naval construction unit,” said Luiz Eduardo Guimaraes Carneiro, OSX’s chief executive, in a statement.

Kingfish will lease the vessels to Petrobras, OSX said.

-By Jeff Fick, Dow Jones Newswires