By OGJ editors
HOUSTON, June 23 -- Petroleo Brasileiro SA (Petrobras) has approved contract awards totaling $985 million, excluding bonuses, to Transocean Inc. for five rigs in Brazil. The contracts, to be signed within the next 60 days, will extend through the end of this decade four current Petrobras contracts in Brazil—all at significantly higher day rates—and mobilize the Peregrine I drillship, which has been idle since April 2004.
Contract terms total 19 rig-years for the Deepwater Navigator and Peregrine I dynamically positioned drillships, the Sedco 707 and Sedco 710 dynamically positioned semisubmersibles, and the Transocean Driller semi.
On a tax-adjusted basis, the rates for these rigs represent an even higher netback for Transocean, as drillers operating off Brazil typically pay little or no taxes.
Peregrine I's 3-year contract at $112,000/day, which could generate minimum revenues of $123 million, will begin in November following a 4-month upgrade in a Brazilian shipyard. With performance bonuses, the day rate could be as high as $135,000/day.
Deepwater Navigator's new 4-year term at $180,000/day nearly doubles its current $99,000/day commitment and will generate a minimum $263 million in revenues, commencing in October 2006.
The 4-year, $263 million lease at, $180,000/day, for Sedco 707 will commence in January 2006 following completion of the rig's current $100,000/day contract commitment and an estimated 60-day planned shipyard program.
A 4-year contract for Sedco 710, which at $120,000/day is valued at a minimum $175 million in revenues, should commence in October 2006. The rig's current day rate is $100,000/day.
The $161 million minimum contract for Transocean Driller at $110,000/day has a 4-year term to commence in August 2006. The day rate more than doubles its current $53,000/day contract.