Petrobras cancelled the renewal of four rig contracts:
Seadrill – West Taurus contract ending this month and West Eminence with contract ending in July 2015. People in the know say daily rate was above present market conditions.
Diamond Offshore – Ocean Baroness contract ending in September 2015. Diamond tried to negotiate a 3 year extension. We understand the reason for cancellation was low operational efficiency of the rig.
Pacific Drilling – Pacific Mistral whose contract ended February 6, 2015. PD tried to negotiate a 3 year extension. Rumor in the marketplace is that daily rate was above present market conditions.
Petrobras Business Plan will definitely be revised and these cancellations is part of the revision.
The likely scenario is that Petrobras will restructure and start contracting again in 12 to 18 months as it will need to get production up.