Petrobras leases five deepwater rigs for $4 billion

By OGJ editors
HOUSTON, Apr. 4 -- Petroleo Brasileiro SA (Petrobras) has signed a memorandum of understanding with Noble Corp. to lease five deepwater rigs over a period of 29 rig years at a potential cost of $4 billion. The contracts are subject to the approval of Petrobras's top management.

Petrobras currently is employing the two semis and three drillships off Brazil.

Noble said the new contracts could increase its total backlog to more than $10 billion. The deal includes performance bonuses, a 1-year option on the Noble Paul Wolff, and paid shipyard time during upgrades for three dynamically positioned drillships.

The deal would include:

-- The Noble Paul Wolff dynamically positioned semisubmersible for a 5-year primary term beginning in November 2009, with a 1-year option. The fourth generation semi can drill in 9,200 ft of water. With an 18% performance bonus, the total cost is $1.08 billion.

-- The Noble Roger Eason drillship rated to drill in 7,200 ft of water. Contract is for 6 years, beginning in March 2010. The lease will cost $888 million, including a 15% performance bonus.

-- The Noble Leo Segerius drillship, rated to drill in 5,600 ft of water, for a 6-year term, beginning in the second or third quarter of 2009. Cost to Petrobras is $769 million, including a 15% performance bonus.

-- The Noble Muravlenko drillship for 6 years beginning in March 2009. The drillship can drill in 4,900 ft of water. Its lease will cost $744 million, including a 15% performance bonus.

-- The Noble Therald Martin conventionally moored semisubmersible that can drill in 3,900 ft of water. It will lease for a 5-year term beginning in October 2010. Cost of the lease is $542 million, including a 10% performance bonus.

Noble will proceed with planned upgrades on each of the three drillships, said David W. Williams, Noble chairman, chief executive, and president. The upgrades will cost about $175 million/ship and will take each rig out of service for about 150 days. Petrobras will pay about "$90,000/day for up to 150 days for each rig's scheduled shipyard stay," Williams said.

"We expect to perform the upgrade work on the rigs sequentially and will begin ordering the required long lead equipment once the contracts are formalized," Williams said.

Separately, Noble's newbuild Noble Dave Beard deepwater semi is scheduled to begin a 5-year contract with Petrobras off Brazil in 2009, said Williams.

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