Singapore Offshore and Marine Sector

Petrobras announced its five year investment plan for 2011-15, after two earlier refusals by the company’s board. Investments of US$224.7 bn are in line with the previous plan of US$224.1 bn. Importantly, the quality of the spend seems to have a larger upstream focus, with investments of US$127.5 bn, 7% higher than the previous plan.

Petrobras announced that it has launched a new tender for 21 rigs after awarding the first batch of seven rigs to a Brazilian consortium led by EAS and cancelling the pre-existing tender in mid-April 2011.

The rig-building programme will proceed with the order of nonchartered units to be owned by Sete Brasil, a holding company established on 13 May 2011 backed by BNDES (Brazil’s state-owned development bank) with potential investment by other funds.

Petrobras will hold a stake of between 5% and 10% in Sete Brazil.

As the third and fourth lowest bidders in Petrobras’ tender for 28- deepwater rigs, we believe Keppel and Sembcorp Marine remain in a strong position to win drillship orders from Petrobras.