Constellation a step away from BM-S-11

June 11, 2019

The directors of Shell and Petrogal will appreciate the contracting of the Constellation Laguna Star drillship during a two-year operation in the BM-S-11 block in the pre-salt of the Santos Basin. The drilling unit was offered by the Brazilian group in a Petrobras bid, and its chartering now depends only on the approval of the two oil companies, partners in the assets.

Petrobras’ board of directors submitted, last weekend, an opinion from the bidding committee indicating the charter of the equipment. The expectation is that both Shell and Petrogal will authorize the charter of the unit, and that the contract will be signed between the end of June and the beginning of July.

The hiring of the drillship will be submitted to the approval of the partners almost three months after the opening of the commercial envelopes of the tender. The unit was offered at a daily rate of about U$ 160,000, ousting offers from Transocean / Ocean Rig, Ensco, Seadrill and Petroserv.

If the contract is approved, Constellation will return to Petrobras after almost a year. The company had six drilling units for the Brazilian oil company, but its last contract was finalized in 2018, when it filed a request for judicial recovery.

Originally, Constellation offered two drillships in the tender: the Laguna Star and the Amaralina Star, both at the same value. Following the opening of the commercial proposals, the bidding commission asked the company to indicate only one unit, and the group chose to select the Laguna Star, which runs the Enauta campaign in the Atlanta field until the end of the year.

The tender notice requires that the drillship be capable of operating at a water depth of 2.4 thousand m and be available within 120 days after the signing of the contract. The opening of the first proposals took place in mid-January.

The duration of the contract will be of two firm years, with the possibility of extension for the same period. Should the two parties opt for renewal, the contract provides for renegotiation of the charter fee.

Petrobras accounts for the operation of the BM-S-11, with a 65% stake in the asset, while Shell and Petrogal hold 25% and 10%, respectively. The consortium maintained, until May 2018, two units from Ocean Rig operating in the project with exclusive dedication.

The exploratory campaign on the block resulted in the discovery of Lula and other pre-salt fields.

Source: Brazil Energy Magazine

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