Valaris drillship staying in Brazil for multi-year gig with Petrobras

Offshore drilling contractor Valaris has tucked a long-term contract in Brazil under its belt for one of its drillships, which will carry out operations for the country’s state-owned energy giant, Petrobras.

The 1,064-day contract with Petrobras in Brazil for the Valaris DS-4 drillship comes after a competitive bidding process. Valaris explains that the total contract value is approximately $519 million, inclusive of mobilization fees and additional services, based on the firm contract term.

Anton Dibowitz, Valaris’ President and Chief Executive Officer, commented: “We are delighted to have secured further work for drillship Valaris DS-4 with Petrobras for their upcoming Buzios program and we look forward to continuing to partner with Petrobras on their programs offshore Brazil, a market where we expect to see continued growth over the next several years.

“We have previously stated that we expect Valaris’ earnings and cash flow to increase meaningfully as rigs are re-contracted at market rates. This contract award for Valaris DS-4 is a great example of how we are executing on the operating leverage inherent in our business, with the rig repricing from a day rate in the low $200,000s to an effective day rate in the high $400,000s.”

The drillship’s new contract with Petrobras is anticipated to start late in the fourth quarter of 2024, following the completion of the rig’s current contract with the Brazilian giant, which is expected to finish in September 2024. Upon completion of its current assignment, the rig is expected to be out of service for around 90 days to complete customer-required capital upgrades before beginning the new contract.

The current development concept for the Búzios deepwater field encompasses 11 platforms. At the moment, six units are under construction, including the FPSO Almirante Tamandaré, P-78, P-79, P-80, P-82, and P-83. Petrobras is the operator of the field, with an 88.99% stake with CNOOC (7.34%) and CNODC (3.67%) as partners.

The 2010-built Valaris DS-4 drillship is of Samsung 96k design. It was constructed at Samsung Heavy Industries, Geoje, South Korea. With a maximum drilling depth of 40,000 ft, the rig is capable of operating in water depths of 12,000 ft and can accommodate 200 people.

The new contract award comes days after the much-anticipated news about the purchase and delivery of two newbuild drillships was confirmed by Valaris. The offshore drilling player has expanded its fleet by taking delivery of these newbuild drillships from Daewoo Shipbuilding Marine Engineering (DSME), after exercising the option to buy them.

The rigs will be mobilized from South Korea to Las Palmas, Spain, where they will be stacked until they are contracted for work.

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