DSME to buy stake in Brazil yard

Daewoo Shipbuilding & Marine Engineering (DSME) is said to be in talks to buy as much as 20% in a Brazilian rival to seek orders from Petroleo Brasileiro (Petrobras).

The local content clause is important to win Petrobras? projects and the deal with the unnamed Brazilian shipyard may be concluded by the end of the year.

Daewoo joins Keppel Corp. and Samsung Heavy Industries in setting up manufacturing bases in Brazil to win more orders for offshore projects. Petrobras, which made the biggest oil discovery in the Americas in three decades, plans to invest $174.4 billion by 2013 on exploration.

Petrobras plans to order five to seven drill ships, or semi-submersibles and the company claims it will need more than 240 vessels including drill ships, tankers, production platforms and supply vessels in the next five or six years. The Brazilian oil company requires 70% of the offshore orders to be built in the country which makes it essential for a shipbuilder to have a local presence. Keppel, the world?s largest builder of shallow-water oil rigs, is conducting feasibility studies to buy a stake in a second yard in Brazil, which will give the Singaporean company additional capacity to build offshore structures for Petrobras.

Samsung last year bought a 10% stake in Estaleiro Atlantico Sul, to tap orders in Latin America, including those from Petrobras.