Sete Brasil Will Invest $27 Billion on 30 Oil Drilling Rigs

Sete Brasil Participacoes SA, an oil-rig provider owned by Petroleo Brasileiro SA, banks and pension funds, will spend $27 billion by 2020 on drilling units as the South American country expands output.

The company will borrow $13.5 billion from Brazil’s BNDES development bank and $7 billion from other lenders to order 30 rigs, Chief Executive Officer Joao Carlos Ferraz told reporters in Rio de Janeiro today. Rio de Janeiro-based Sete is also seeking a capital increase of about $6.5 billion from investors, Ferraz said.

The creation of Sete was part of Brazil’s drive to expand the domestic shipbuilding industry to supply oil companies as they tap the largest discoveries in the Americas in over three decades. Petrobras needs to source as much as 70 percent of goods and services from local suppliers to develops so-called pre-salt deepwater reserves in the Atlantic Ocean that hold at least 50 billion barrels of recoverable oil.

Sete already has contracts with shypyards for nine of the 30 rigs, including agreements with Estaleiro Atlantico Sul and Keppel Offshore & Marine Ltd. It’s negotiating with five other shipyards for the remaining contracts, including billionaire Eike Batista’s OSX Brasil SA, Estaleiro Enseada do Paraguacu, Jurong Aracruz, Keppel and Rio Grande 2, Sete said in a statement distributed in Rio today.

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