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Thursday, May 15, 2008

Petrobas Deep Sea Drilling Capacity

Petroleo Brasileiro SA, Brazil's state-controlled oil company, has reportedly 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 is hiring rigs that can drill in at least 3,000 meters (9,800 feet) of water according to Chief Executive Officer Jose Sergio Gabrielli. The world has 21 such vessels, according to Rigzone.com, which tracks the offshore drilling industry.

Petrobras is reportedly negotiating for as many as 17 more vessels to probe the Tupi discovery and neighboring fields. The company already controls almost seven times as much capacity as the next biggest user of rigs that can drill in 7,500 feet of water. U.S. and European oil companies are likely to have to pay $50,000 more per day to lease deepwater rigs during the next three years because Petrobras has already contracted for so much of the worldwide fleet. Such units are designed to cope with high seas and hold equipment needed to bore beneath the seafloor and identify oil and gas deposits as much as 6 miles below the ocean surface.

Petrobras has signed leases this year for six deepwater rigs, more than twice as many as any other producer, according to Dahlman Rose. The contracts have an average duration of five years and four months at rates of $410,000 to $580,000 a day.

Petrobras plans to start pumping oil in the first quarter of 2009 from Tupi, the biggest find in the Americas since Mexico's 1976 discovery of the Cantarell field in the Gulf of Mexico. Petrobras also is evaluating as many as seven nearby fields, including the Carioca prospect, according to Gabrielli who said Petrobras began signing multiyear drilling leases as far back as 2004 because it foresaw a shortage of deepwater vessels.

Well done Petrobras.

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