Petrobras Has Leased 80% Of World's 3,000-Meter Rigs, Pushing Other Supplier Costs Higher - BBerg

[hatrack]

May 15 (Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, 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, as the Rio de Janeiro-based company is known, is hiring rigs that can drill in at least 3,000 meters (9,800 feet) of water, Chief Executive Officer Jose Sergio Gabrielli said in an interview last week. The world has 21 such vessels, according to Rigzone.com, which tracks the offshore drilling industry.

The company's ``insatiable'' demand is forcing producers including Exxon Mobil Corp. and BP Plc to pay more as they compete for the remaining units, said Kjell Erik Eilertsen and Truls Olsen, analysts at Fearnley Fonds AS in Oslo. Explorers that don't have rigs under contract may delay projects or pay rents of more than $600,000 a day. ``The oil majors have their backs against the wall as Petrobras has aggressively locked up significant rig capacity,'' said Omar Nokta, head of maritime research at Dahlman Rose & Co. in New York.

Petrobras is negotiating for as many as 17 more vessels to probe the Tupi discovery and neighboring fields, said Bill Herbert, an analyst at Simmons & Co. International in Houston. 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, according to research by Dahlman Rose.

U.S. and European oil companies probably will 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, Nokta said. 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.

EDIT

http://www.bloomberg.com/apps/news?pid=20601086&sid=a8V5CHwdycrk&refer=latin_america

[thunder rising]

1. Quick Exxon needs another tax break.

[daa]

4. They are not even looking for oil nt

[ensho]

2. I'm sure the neo cons are not liking that one bit

unless they have some fingers in Petrobras?

[pscot]

3. that lease rate has doubled

over the last couple of years>