Following the US moratorium on offshore drilling due to oil spill, Petrobras (PBR) could benefit from the US Gulf of Mexico (GoM) rigs. Since the upstream players are closing down deepwater GoM drilling activity for the time being, rig operators are looking at a better place to work with.
Nearly 35 rigs are inoperative following the moratorium. Oilfield service companies are presently inquiring about the movement of their rigs to Brazil from GoM. While the moratorium was initially fixed for a period of six months, it may protract due to the negative sentiment against offshore drilling and plans for refurbishment of safety standards.
Brazil is gaining traction in deepwater activity, with Petrobras being the major player. Petrobras is the largest publicly traded Latin American oil company, dominating Brazil’s oil and gas sector. It produces substantially all of Brazil’s crude oil and natural gas.
Petrobras’ know-how and proficiency in deep-water oil and gas E&P is reflected in its exceptional track record of hydrocarbon production growth, as well as its prospects for production and reserves growth in the future, especially following significant offshore finds in the last few years.
Petrobras expects to lease eight deep-water drilling rigs this year and a total of 14 in 2011−2012. In addition, the company will begin receiving the first of 28 new rigs to be built in Brazil by local shipyards, giving it a fleet of more than 60 deepwater rigs by 2017.
If the moratorium continues for more than six months, the chance of rigs shifting to offshore Brazil will get increased. Being the dominant producer in this area, Petrobras will capitalize this favorable trend, in our view.
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