Petrobras embarks on newbuilding binge

Petroleo Brasileiro SA (Petrobras), the state controlled oil producer in Brasil, plans to order 40 drilling ships and platforms worth about $30 billion for delivery by 2017. The deep-water drilling ships and semi-submersible rigs will cost about $750 million each and will explore for oil and gas in seas up to 3,000 metres deep.

Petrobras plans to spend $112 billion through 2012 to help increase its oil and natural gas production and expand its refining and distribution operations. The discovery of 5 billion-to 8 billion-barrel Tupi field and the possibility of other large fields nearby may require even more spending on offshore equipment, according to a company spokesman.

Foreign companies already in Brazil building ships include Singapore’s Keppel Corp. and Sembcorp Marine Ltd., Galliano, Louisiana-based Edison Chouest Offshore and Oslo-based Aker Yards ASA. Brazilian companies include construction companies Construtora Camargo Correa SA, Construtora Queiroz Galvao SA, Grupo Wilson, Sons, and Construtora Norberto Odebrecht SA.

Yards in South Korea and Singapore, the world’s two biggest offshore vessel-building nations, are also adding new docks and extending the lengths of existing ones to work through order backlogs that stretch to 2012. Daewoo Shipbuilding & Marine Engineering submitted a bid to Petrobras to supply drill vessels and semi-submersibles in early April and the company is confident it will be successful in winning some of the orders.

The plan was announced a day after Petrobras and shipping and construction industry officials met with Dilma Rousseff, chief of staff to Brazilian President Luiz Inacio Lula da Silva to map out how the country can increase its ability to build equipment needed by the oil industry in Brazil. While preference will be given to Brazilian-built equipment, foreign contractors and yards will also be allowed to bid on the ships, the Petrobras statement said. The Brazilian government has low-cost loans available for Brazilian ship construction.

Last week, Petrobras ceo Jose Sergio Gabrielli said the company also planned to order 146 offshore oil service ships over the next six years to manage, supply and service offshore rigs and platforms.

Brazil, the world’s second-largest shipbuilder after Japan in 1980, has seen its shipbuilding industry shrink dramatically to about 2,000 workers in the late 1990s. Now the country has more than 80 firm orders for ships and 40,000 workers, according to Sinaval, Brazil’s shipbuilders association. Those orders include more than 20 tankers from Transpetro, Petrobras’ transportation unit. Transpetro may announce another order for at least 16 more tankers by the end of May.