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Driller killer
19 November 2009
Petrobras' last round of drill-ship procurements fell victim to cost overruns and a collapsing bank market. Can the market recover, and clear the backlog, in time for the next round of bids? By Tom Nelthorpe.
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[petrobras]
[project finance]
[oil rig]
The offshore rig financing market has been the most promising, lucrative, and robust of its kind in Latin America. It offered generous pricing, dollar revenues, and exposure to the best-regarded national oil company in Latin America – Petrobras. When Petrobras discovered huge deposits of oil in deep offshore formations, foreign lenders looked forward to a gush of business.
Petrobras has always been something of an anomaly among national oil companies. It has a reputation for solid management, has a US listing and prefers to be the operator of its own fields. Yet it can usually be pressed into service as an instrument of Brazilian economic policy, if not to the extent of Venezuela's PDVSA.
For drill-ship operators and their lenders, the isolation of Brazil's deposits from other production areas has meant historically that rig owners can charge Petrobras higher charter rates. In the last three years, Petrobras has responded by signing...
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