Petrobras claim to drilling contractors related to Sete project
Seadrill said on its earnings call that it recently had received a claim of USD213m from Petrobras related to its involvement in the Sete project in Brazil. Sete was launched in 2011, looking to build 29 deepwater rigs in Brazil, with involvement from several drilling contractors; Seadrill, Odfjell Drilling, Queiroz Galvao (now Constellation), Odebrecht (now Foresea), Petroserv (now Ventura Offshore) and Etesco. Seadrill said local and international peers have received similar claims. It further said that Petrobras might offset the claim against future earnings on its rigs in Brazil. Going forward, we expect to see a lengthy legal process related to these claims, and do not expect any cash outflow from Seadrill near-term. Given the background and the failure of Sete, we are also puzzled how the drilling contractors could be liable, and one scenario could be that this a is ‘pro forma process’, in our view. Still, it can create uncertainty among investors. For other listed companies involved in Sete (Odfjell Drilling and Ventura), we understand that their relevant subsidiaries involved in the Sete projects are either not active (with a parent guarantee) or part of the corporate structure any longer, which probably protects them from any impact.
Odfjell Drilling Ltd. (Odfjell Drilling) is an integrated offshore drilling and oil service company. The Company operates through three segments: Mobile Offshore Drilling Units (MODU), Drilling & Technology, and Well Services. The Mobile Offshore Drilling Units is responsible for operations of mobile drilling units fully or partly owned by the Company and units owned by other companies. It operates mobile drilling units in Norway, United Kingdom, Angola, Vietnam and Brazil. The Drilling & Technology segment is providing platform drilling, project management and engineering services. Drilling & Technology operates from offices in Bergen, Stavanger and Aberdeen. The Well Services segment is a provider of casing and tubing running services (TRS), drill tool rental and well intervention services to the onshore and offshore oil and gas industry. The Well Services are provided to onshore and offshore drilling operations in the North Sea, mainland Europe and Black Sea, among others.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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