Offshore Contractors Adjust Rig Fleets on Brazil Woes

A weaker real against the U.S. dollar has squeezed the company further as it requires more of its shrinking domestic fuel revenue to pay debt denominated primarily in dollars. To ease the problem, Petrobras has been selling assets worldwide and trying to reduce costs.

Petrobras did not immediately respond to phone and e-mail requests for comment.

On Thursday, contractor Diamond Offshore Drilling Inc said that debt-laden OGX Petroleo e Gas SA was "delinquent" on payment obligations for the Ocean Quest (mid-water semisub) rig and that Diamond had the right to terminate the contract.

OGX is part of Brazilian tycoon Eike Batista's crumbling EBX Group energy, mining, shipbuilding and port operation empire. Failure to meet production targets from its first offshore field in 2012 caused the group's market value to fall by more than 90 percent.

"We are pursuing other contracting opportunities to substitute for OGX if the contract is terminated," Diamond said in its fleet status report.

Diamond said its Ocean Star (DW semisub) was already sublet to Queiroz Galvao for rest of its contract with OGX, which owed Diamond $22.7 million as of June 30 and was on the hook for $36 million this quarter - all of which is currently unpaid.

Transocean and Diamond are not the only rig contractors to adjust their Brazilian presence. On Tuesday, rival Ensco Plc revealed that it was now going to stack its Ensco 5000 (mid-water semisub) - previously under contract with Petrobras - in South Africa.


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Phil  |  September 20, 2013
Lots of work in Asia available right now for these rigs.


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