Brazilian woes continue as Sete Brazil reins in rig building programmeNews // January 19, 2016
Broker Westshore says the Brazilian market looks set to endure more pain, with Sete Brasil, the company created to manage the build of 29 new rigs to go on hire to Petrobas, steadily scaling back its ambitions since the scandals broke that have engulfed Petrobras.
As initial 29 had been slashed to 15 by late last year but latest reports suggest that has been cut further to just six units. The units to be delivered are those in the most advanced stages of build.
"The knock on effect of this is massive," said Westshore. "Companies the world over had been contracted to supply goods and services for the construction of the rigs and will now endure significant ramifications as a result.
"The Brazilian rig market has endured cuts just as the vessel market has," said Westshore. "It is now estimated that the rig market has been scaled back to 2008 levels – a reduction of 33 per cent from its peak. The current picture shows 48 rigs under contract in Brazilian waters, 19 drillships, two jack-ups and 26 semi submersibles. The current picture shows that this will remain roughly the case for the remainder of 2016."
As Westshore noted, and as previously reported in Offshore Shipping Online, Petrobras has also initiated a second round of cost renegotiations, named ‘Onda 2’ - this time aimed directly at floating production and drilling rigs that were not included in the first round of talks.