Petrobras, Mitsubishi plan $830 million drillship

Brazil's Petrobras and Mitsubishi have agreed to form a 50-50 joint venture to construct and operate a drillship having the capacity to drill in 10,000 ft of water.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 13 -- Brazil's Petroleo Brasileiro SA (Petrobras) and Mitsubishi Corp. have agreed to form a 50-50 joint venture to construct and operate a drillship having the capacity to drill in 10,000 ft of water.

The firms said the ship, which is to be completed and delivered in June 2010, will cost $830 million. The two firms said they will cover 10-15% of the cost of the vessel, with the new joint venture to procure the rest of the funds itself.

On delivery, the joint venture will charter out the vessel to an affiliate of Schahin Engenharia SA, a leading drillship operator in Brazil. The Brazilian firm will provide drilling services for the exploration and development of Petrobras's deepwater oil and gas fields in Brazil and overseas.

The announcement follows reports last December that Petrobras obtained $750 million in financing from a group of Japanese banks, including Sumitomo Mitsui Banking Corp., Mizuho Corporate Bank, and Banco de Tokyo-Mitsubishi UFJ Ltd.

Petrobras said the money would be used by to finance its investment program, including expansion of a refinery based in Sao Jose dos Campos, Sao Paulo.

The Brazilian firm, which said the loans will have a maturity of 10 years, did not immediately reveal the financing cost or other details as the contract has a confidentiality clause. However, Petrobras's Chief Financial Officer Almir Barbassa said the conditions of the loan were "pretty reasonable" and "attractive," although "not as good as a year ago."

Contact Eric Watkins at hippalus@yahoo.com.

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