Sete Brasil, the ill-fated venture designed with the construction and management of the pre-salt drillships in mind, is again on the path of being wiped out of the market, over a strong opposition of Petrobras technical experts regarding issues such as the operation of the drillships.
Sete´s restructuring was making good ground until last week, when Petrobras came up with additional requirements, some of which were regarded as unbearable to the company, which lost the financial support by the administration.
Although sources with knowledge of the negotiations say that Sete and Petrobras are close to coming to terms, behind-the-scene talks are that Petrobras wants to deliver a smashing blow to Sete.
According to Portos e Navios (Ports and Ships) online magazine, the daily rate of a drillship in the international market is of US$ 300 thousand, in a US$ 50-oil scenario, whereas Sete Brasil´s drillships rates are in excess of US$ 400 thousand a day.
Petrobras does not agree to pay this price, no matter if at the expense of the local content regulations, as chartering the drillships abroad would turn out to be much more economical.
Source: Portos e Navios (Ports and Ships) online magazine
Petrobras is seeking to limit drillship operation by Sete to five units, out of fifteen under contract, as well opposing Sete to hold minor stakes on other companies which will be in charge of managing drillship operations.
Furthermore, Petrobras was looking forward to calling off any contracts where Sete failed to meet the local content requirements, but after extensive negotiations, the penalty was limited to a fine, twice as much as originally established.
Sete Brasil was forced to accept such dire conditions to stay afloat in a scenario where cash reserves are enough to pay salaries, taxes and overheads until 1Q16 at best.
State-owned and private Brazilian lending banks have decided not to enforce any performance guarantees until a solution comes up.
Losses of R$ 25 billion, or about US$ 8 billion, along with severe harm to shipyards and vendors, may result in case Sete Brasil is actually shut down.
This post originates here.