Transocean: No Longer Concerned about Petrobras Rig Orders

HOUSTON Sep 6, 2006 (Dow Jones Newswires)

Transocean Inc. (RIG) Chief Executive Bob Long on Wednesday distanced himself from concerns he expressed last month about the long-term outlook for deepwater drillers.

"That's a lot of new capacity ordered all of the sudden," he said on Aug. 3 of a recent Petrobras order for six new rigs. "You have to ask yourself, 'Are we approaching the point at which supply is going to exceed demand?'"

When asked about the issue during an investor presentation Wednesday, Long changed his tune.

"At this point there's probably going to be a supply constraint situation for deepwater capacity for a long time," Long said.

Brazil's state oil company Petroleo Brasileiro SA, or Petrobras (PBR), struck $4.8 billion in deals with Brazilian firms to deliver six deepwater drilling rigs starting in 2009.

Long said in August that the new capacity could weaken the market in 2011 if today's red-hot demand waned.

But long-term demand for deepwater drillships had picked up over the summer, Long said, with Transocean's backlog increasing $700 million since June 30, to $20.1 billion.

The $4.1 billion in rig deliveries scheduled for 2009 already exceeds projected 2006 revenue, he said.

Orders for rigs in the Gulf of Mexico have provided much of the boost. With Tuesday's announcement by Chevron Corp. (CVX) of the discovery of a major new oil field 175 miles off the coast of Louisiana, demand in the Gulf isn't expected to fall off anytime soon.

Long's concerns were widely panned by analysts at the time, who questioned making any predictions about the market five years out.

"We firmly believe these 'concerns' are misplaced at this stage of the game," Lehman Brothers analyst Angeline Sedita wrote in a research note at the time.

Long acknowledged the criticism Wednesday.

"I don't think you should put too much in the comment I made at the last conference call," he said.

Copyright (c) 2006 Dow Jones & Company, Inc.

For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Shop Mechanic - Grand Prairie, TX
Expertise: Customer Service|Mechanic
Location: Grand Prairie, TX, TX
Diesel Mechanic for Williston, ND!
Expertise: Mechanic
Location: Williston, ND
Branch Manager for Heavy Equipment Dealership in Mississippi
Expertise: Facilities Management|Mechanic
Location: Mississippi, United States, MS
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours