Sete Brasil seeks $5B to complete offshore rigs

Brazil’s struggling offshore drilling company Sete Brasil has reportedly filed a draft reorganization plan for the company.

The drilling company was formed in 2010 to own and operate a large fleet of drilling rigs, to be used by the Brazilian oil giant Petrobras. This was supposed to be a 28-rigs, $90 billion in revenues project.

However, following a widespread corruption scandal in Brazil, Sete failed to obtain the funds needed to pay for the rigs, and Petrobras also refused to commit to the whole rig contract package.

According to a report by the Brazilian newspaper O Globo, the offshore driller’s reorganization plan includes a proposed downsizing of the initial 28-rigs batch. The company now proposes to build eight to twelve drilling rigs. The plan also seeks for $5 billion in funding to support the construction of the rigs.

According to O Globo, the company’s President Luiz Eduardo Carneiro said it was essential for the driller to have Petrobras commit to the contract with Sete, which would then encourage potential investors to inject the $5 billion needed to complete the rigs.

In the meantime, Sete, which filed for bankruptcy protection in April, is reportedly in talks with Singapore’s Jurong and Keppel shipyards, hoping they might accept an option where they would complete the rigs without being paid upon delivery. The idea is to take delivery of the rigs and pay them off when the company starts generating money.

However, everything now depends on Petrobras, which has yet to sign a contract for the rigs, something, O’Globo says, might not happen at all.
The newspaper has cited an analyst who said that there was no evidence the Brazilian giant, looking to cut costs and divesting its assets, would hire any of the Sete rigs.

“Petrobras demands lower prices, and it gets them with the rigs available today on the international market,” an unnamed analyst said.

Offshore Energy Today Staff