Brava Star to make first oil drilling in a share area
Shell agreed to charter the Brava Star drill rig from Queiroz Galvão Oil & Gas to drill four wells in the assets of Sul Gato do Mato, Alto de Cabo Frio Oeste, both granted at the share auctions located in the Santos Basin, and BC-10, in Campos. The contract between the two companies has a one-year term, with start-up for 2019 and the daily rate was below US $ 130 thousand.
The Shell campaign involves the drilling of an exploratory well at Sul Gato do Mato, one in Alto de Cabo Frio Oeste and two stimulation wells in the BC-10 area. The contract between the two companies was signed late last week.
The oil company’s plan is to start drilling the campaign’s inaugural well in the first quarter, but execution of the schedule will depend on the progress of the environmental licensing process. At first, the first well should be in Sul Gato do Mato.
Shell holds an 80% stake in Sul Gato do mato area and divides the asset with Total with 20%. In Alto de Cabo Frio Oeste, the consortium is formed by Shell (55%); CNOOC Petroleum (20%); QPI Brazil (25%). The company has already filed an application for environmental licensing for drilling in the two areas and licenses are expected to be released between the end of the year and the beginning of 2019.
QGOG’s proposal surprised the market and overshadowed large Seadrill-sized companies. The value presented by the Brazilian company was considered low, especially considering that the Brava Star is a sixth generation rig, capable of operating in water depths of up to 3 thousand m.
Experts and executives consulted consider that with the daily rate below US $ 130 thousand, QGOG will hardly have a profit margin on the contract. The strategy for presenting a price still lower than that practiced in the market was driven by the fact that the Brava Star will be idle from August, when the charter contract with Petrobras, in force since 2015, ends. The Pernambuco group has two other rigs with contracts to the end with Petrobras and three other contracts that started in 2018.
Despite the low value, the business ensures an important strategic gain to QGOG which is to have a charter contract with an IOC. Shell, on the other hand, assures the charter of a unit with higher local content.
This is the second Brazilian company chartered by Shell recently. In February, the oil company hired the semi-submersible Catarina, from Petroserv, which has been carrying out an intervention campaign in the Parque das Conchas and in Bijupirá-Salema, in the Campos Basin.
Source: Brazil Energy