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Petrobras to Lease 26 Drill Rigs for $76.3 Bln

Source: Reuters 2/10/2012, Location: South America

Petrobras will pay $76.3 billion over 15 years to lease 26 deepwater oil drilling rigs from Brazil's Sete Brasil and Cyprus's Ocean Rig , the largest contract in the company's history, an executive involved in the deal told Reuters. Petrobras will lease 21 rigs from Rio de Janeiro-based Sete Brasil for an average of $530,000 a day and 5 ships from Nicosia-based Ocean Rig for an average $548,000 a day, according to a Petrobras statement. The ships will be delivered over a 45- to 90-month period.

The rigs will be built in Brazilian shipyards and have financial support from the export development agencies of the United States and Norway, the source, who requested anonymity, said. Petrobras, the world's No. 5 integrated oil company by market value, is in the middle of a $225 billion expansion plan. The company seeks to nearly triple output to 6.4 million barrels a day of oil and natural gas equivalent by 2020, a goal that could help Brazil challenge the United States for the role of No. 3 oil producer after Russia and Saudi Arabia.

It needs the drillships to develop giant oil reserves being discovered in the Santos and Campos offshore basins as well as for new frontier drilling in Brazil, African, Black Sea and Gulf of Mexico projects. The orders are expected to prompt the world's shipbuilders to expand in Brazil to meet local content rules and win subsidized credits from government banks.

In addition to the rigs Petrobras is building more than 300 other oil tankers, support vessels and production platforms to support its expansion. The rigs being leased from Sete Brasil and Ocean Rig will have 55 percent to 65 percent Brazilian content, Petrobras, Brazil's state-controlled oil company, said in a statement.

Ocean Rig owns and operates nine deep-water oil rigs and drilling ships. Two of its ultradeepwater drill ships are under a contract to Petrobras. The contract, which was signed in May, is worth $1.1 billion over three years. Sete Brasil is already overseeing a $4.6 billion plan to build seven offshore drilling rigs for Petrobras. Petrobras owns 10 percent of the company. The rest of Sete Brasil is owned by an investment fund backed by Brazilian pension funds such as Previ and banks Santander, Bradesco, BTG Pactual and state-owned Caixa Economica Federal.

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