Brazil could have up to 40 deepwater rigs by 2021; manufacturers look to Latin America with optimism.
Brazil may have up to 40 deepwater rigs working in offshore concessions in 2021. The forecast is from consultancy Bassoe Offshore, which provides that Petrobras will demand at least 30 units at the beginning of the next decade, while other majors operating in the country will need of ten more.
The figures are based on Petrobras’ forecast that the new phase of pre-salt development could require up to 178 wells, with the installation of 12 new FPSOs. Considering that drilling of each well can take up to 100 days, Bassoe Offshore estimates a need for at least six rigs dedicated only to this region. There are also expectations that the areas auctioned in 2017 by the ANP will generate up to 300 new drillings in the country.
“Brazil will help increase overall demand and this is a very important step in improving the use of daily rates for the entire deepwater market,” explains David Shinn, an analyst at Bassoe Offshore.
Rig makers are already eyeing the prospect of new business in the country. If, last year, almost all major data acquisition companies mentioned Brazil from an optimistic perspective during conferences with analysts, predicting that seismic contracts will be contracted, this time the country begins to appear in the statements of the executives of the drilling rig companies.
Transocean, for example, says that the growth of international oil companies’ participation in the country will help raise daily prices, as well as create demand for new types of assets, different from the units usually demanded by Petrobras.
“There is a lot of interest, mainly from the majors, in Brazil … We expect huge participation from foreign oil companies (in the auctions), which is very positive not only in terms of foreign investment, but also in reducing dependence on only one company, Petrobras, “said Roddie Mackenzie, Transocean’s vice president of Market and Contracts, in February.
At the same time, Ensco said that hiring in Latin America may indicate that global demand and supply of rigs is already moving toward equilibrium.
“We anticipate that Brazil and Mexico will boost demand for floaters in the next few years and we are participating in bids in these markets, with units expected to start working in the second quarter of 2018,” said Carl Trowell, Ensco CEO, during a conference on results from last year.
The executive probably referred to the bids initiated by Petrobras in February. The oil company has opened the contracting season to replace part of the contracts that will expire during 2018 with the launch of a notice for two drilling units anchored, one for 500 m and another for 2,2 thousand m.
Today, Petrobras has in its portfolio 23 drilling rigs operating in Brazil, in addition to one abroad and three in law suits. Of these, 14 contracts mature in 2018, one of which is in a law suits. Contracts are expected to continue and a new tender will soon be opened for the Libra campaigns in the Santos Basin pre-salt, which will run at least two new rigs.
Despite the good news, there is no prospect of a return to the numbers at the time the price per barrel was up. In 2013, before the crisis, the country had almost 80 rigs in operation.
“Brazil probably will not return to the scenario four, five years ago, for that volume of excess rigs. Alone, the country will not save the market, but will remain a key player in offshore drilling, “Shinn concludes.
How are prices?
The forecast is also of continuation in the low daily rates. The analyst at Bassoe Offshore believes that the values should take at least another one or two years to go into a recovery path.
“I do not believe that Brazil alone will increase daily rates, but it will contribute to this, as will other countries in South America. This will help prices eventually, but the forecast is still that the daily rates for the next Petrobras competitions are much lower than in previous years, “explains Shinn.
Petrobras’ own president, Pedro Parente, recently stated at a news conference that the company would hardly pay taxes such as “$ 400,000 / day or $ 500,000 / day of old.”
South America
Another change from the years before the crisis is that, from now on, Latin America will have more activities beyond Brazil. In addition to Guyana, where Exxon has made major discoveries in deep waters, contracting offshore drills for Peru and Suriname is also planned.
Argentina could also become an attractive market. The country is preparing to tender deep-water areas this year and, if the auction is successful, Bassoe predicts up to four deepwater rigs in activity by 2021.
“We can see up to 50 offshore rigs working in deepwater campaigns throughout South America depending on the prospects’ results,” Shinn believes.
Source: Brasil Energia
Brazil Energy Insight 
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