May 16, 2008

LOOK WHO’S DRILLING: Petrobras Hires 80% of Deepwater Rigs, Inflates Rents.

Petroleo Brasileiro SA, Brazil’s state-controlled oil company, leased about 80 percent of the world’s deepest-drilling offshore rigs to explore prospects including the Western Hemisphere’s biggest discovery in decades.

Petrobras, as the Rio de Janeiro-based company is known, is hiring rigs that can drill in at least 3,000 meters (9,800 feet) of water, Chief Executive Officer Jose Sergio Gabrielli said in an interview last week. The world has 21 such vessels, according to Rigzone.com, which tracks the offshore drilling industry.

The company’s “insatiable” demand is forcing producers including Exxon Mobil Corp. and BP Plc to pay more as they compete for the remaining units, said Kjell Erik Eilertsen and Truls Olsen, analysts at Fearnley Fonds AS in Oslo. Explorers that don’t have rigs under contract may delay projects or pay rents of more than $600,000 a day.

Sounds like they’re onto something. And maybe we need to be doing more drilling at home? Hell, thanks to Congress we can’t even get shale oil going.

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