• Wednesday, 16 May, 2012

Gabrielli’s final flourish for Petrobras

Change of scene: Jose Sergio Gabrielli steps down as chief executive of Petrobras this week.

BLOOMBERG

By GARETH CHETWYND Rio de Janeiro

 10 February 2012 01:16 GMT

Petrobras chief executive Jose Sergio Gabrielli was set to take his leave of the company this week amid a flurry of offshore contracting activity that highlighted the importance of local content and Brazilian industrial development during his tenure.

As Upstream went to press, the government-controlled administrative board was meeting to appoint former gas and energy director Maria das Gracas Foster as Petrobras’s new chief executive and Gabrielli was basking in the political kudos emanating from a local contracting splurge running close to $20 billion, according to some estimates.

Gabrielli, a former university professor from Bahia, is planning to run for governor in his home state, and is expected to take up a position in the administration of Governor Jaques Wagner in the meantime.

Both are members of the governing Workers Party, and generating jobs through local content policies has been a flagship policy under two successive administrations.



Under pressure Gabrielli has come under pressure due to the long delays in finalising contracting arrangements for ordering 28 ultra deep water rigs from local shipyards.

Seven drillships were initially ordered from the Estaleiro Atlantic Sul (EAS) shipyard, but the process then lost momentum.

After two major contractual tender attempts, followed by direct talks with two bidders, Petrobras was this week set to announce the contracting of more rigs for terms of 15 years, extendable by 15 more.

Sources suggested Sete Brasil, the holding company created by Petrobras, will pick up 21 orders, in accordance with a Petrobras board decision.

Rival bidder Ocean Rig was in eleventh-hour talks with the oil giant, clinging on to the hope of building at least some of the five Huisman-designed dual activity drillships offered in the original tender. Any such orders would be on top of those going to Sete Brasil.

It is understood the Sete Brasil rigs are being offered at dayrates averaging about $540,000, with some variation due to the staggered delivery schedules.

Singapore shipyard groups have emerged as the dominant players among the constructors, with six or seven of the shipshape units to be built at the new facility that Jurong is building at Aracruz, Espirito Santo state, and five or six semi-submersible units to be placed at Keppel Fels’ BrasFels yard.

A new yard that Odebrecht, UTC and OAS are building at at Paraguacu, Bahia, will also feature prominently.

Under the financing, construction and operating mechanism set up by Petrobras, Sete Brasil will retain 85% of the equity in special purpose companies formed to own each rig, making 15% available to the drilling companies that will operate the units.

The companies that have taken up this offer include Seadrill, Odfjell, Odebrecht, Etesco, Petroserv and Queiroz Galvao.

Sete Brasil will build another 15 drillships, adding to the seven ordered from EAS, and six semi-submersibles.

Ocean Rig offered five drillships, to be built in partnership with Brazil’s Synergy Group, controller of the Estaleiro Maua and Eisa yards in Niteroi, Rio de Janeiro.

Petrobras’ troubled relations with Synergy’s controller, German Efromovitch, and because the oil company was founder and remains an equity holder in Sete Brasil, have engendered persistent speculation that the Ocean Rig units would be excluded.

On the other hand, Ocean Rig’s backers the EISA and Maua yards have begun delivering a new wave of tankers to Petrobras, contrasting with the serious tanker delays at the EAS shipyards, where the first seven drillships have already been ordered.



Earlier units The Greek company has also proved successful in finding cash to finance its earlier units, and won Petrobras mandates for the Ocean Rig Corcovado and the Ocean Rig Mykonos last year. The Ocean Rig Poseidon is already contracted to Petrobras.

Sete Brasil is backed by seven Brazilian finance investors including banks, Brazil’s four biggest pension funds, with Petrobras as a minor equity partner.

In the original tender for 21 drillships, Sete Brasil offered dayrates ranging from $605,000 to $630,000 but was surprised when Ocean Rig bid a lower rate of $588,000, taking advantage of a discount for dual-activity drilling capability.

•• Petrobras has issued $7 billion in global notes in the capital markets, representing the largest ever Brazilian international bond offering, despite the financial turmoil in Europe.

Petrobras is raising cash overseas to help finance its $224.7 billion investment plan for the 2011-2015 period.

User

Become an Upstream member!

Membership includes a subscription to our weekly newspaper providing in-depth news from the energy industry, plus full-access to this site and its archives. Still not convinced? Try our free trial.

Already a member?

Login

Upstream share price index

Recruitment
See all available positions
Events
2
06.05.2012

06

May

06.05.2012 -  20th Middle East Petroleum & Gas Conference (MPGC 2012)

MPGC 2012 will be held from 6-8 May and is returning to Bahrain again, on the occasion of its 20th Anniversary. The conference will be held under the Patronage of His Excellency Dr. Abdul Hussain bin Ali Mirza, Minister of Energy-Chairman of National Oil & Gas Authority, Kingdom of Bahrain and with National Oil & Gas Authority (NOGA) & The Bahrain Petroleum Company (Bapco) as hosts.
The Conference Connection Inc
Read more »
07.05.2012

07

May

07.05.2012 -  20th Middle East Petroleum & Gas Conference (MPGC 2012)

MPGC 2012 will be held from 6-8 May and is returning to Bahrain again, on the occasion of its 20th Anniversary. The conference will be held under the Patronage of His Excellency Dr. Abdul Hussain bin Ali Mirza, Minister of Energy-Chairman of National Oil & Gas Authority, Kingdom of Bahrain and with National Oil & Gas Authority (NOGA) & The Bahrain Petroleum Company (Bapco) as hosts.
The Conference Connection Inc
Read more »
08.05.2012

08

May

08.05.2012 -  20th Middle East Petroleum & Gas Conference (MPGC 2012)

MPGC 2012 will be held from 6-8 May and is returning to Bahrain again, on the occasion of its 20th Anniversary. The conference will be held under the Patronage of His Excellency Dr. Abdul Hussain bin Ali Mirza, Minister of Energy-Chairman of National Oil & Gas Authority, Kingdom of Bahrain and with National Oil & Gas Authority (NOGA) & The Bahrain Petroleum Company (Bapco) as hosts.
The Conference Connection Inc
Read more »