CEO: Noble Targets NOCs, Plans Pemex Deepwater Relationship

Roughly 60% of US oil rig contractor Noble's (NYSE: NE) revenue in 2007 will come directly or indirectly from national oil companies (NOCs), Noble CEO, president and chairman Mark Jackson said.

Noble has 10 jackup rigs working with Mexico's state oil company Pemex, as well as two semi-submersible rigs and three drill ships with Brazil's federal energy company Petrobras (NYSE: PBR).

"Our view has been over the last 5-7 years that if national oil companies control 75% of the oil and gas reserves in the world, we'll control activity," Jackson said in a presentation at the Lehman Brothers CEO Energy/Power Conference in New York City.


Noble will do more than US$600mn in business annualized in the fourth quarter of 2007 with Pemex, Jackson said.

Noble in 2001-02 decided to begin moving its nine rigs in the US Gulf of Mexico to the Mexican side of the maritime border.

Noble now has nearly US$1.2bn in jackup backlog with Pemex, its largest customer. By comparison, other competitors operating at depths exceeding 250ft (76m) in Mexico have a combined 27 jackup rigs and less than US$500mn in backlog, according to the presentation.

"Mexico is a market we've targeted and it has paid off very well for the company," Jackson said.

The three-year contract for the Max Smith semi-submersible rig - Mexico's first ultra-deepwater rig - adds another US$500mn to Noble's backlog, he said.

By positioning itself in Mexico's deepwater market, Noble aims to be able to develop a relationship "that we'll build on for the next decade," Jackson said.

"We believe if you look at the prospects yet to be drilled in the world in deepwater, Mexico has the best prospects to drill anywhere in the world right now," he added.

Mexico has potentially vast deepwater reserves in the Gulf of Mexico, but high investment costs associated with exploration, a lack of technological know-how and legal barriers to private participation have prevented the country from exploiting the resources.

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