Good News! Shell Hires Ship from Queiroz Galvão. This Shows That the Oil and Gas Market Is Starting to Heat Up.
SHELL, the Anglo-Dutch oil multinational, has hired the marine unit, drillship Brava Star, from the company Queiroz Galvão Oil & Gas. The contract was settled for drilling four wells located in the Santos Basin, in the assets of Alto de Cabo Frio Oeste and Sul Gato do Mato, where both were granted in the sharing auctions. With a duration of one year, the contract is set to begin operations in 2019 at a daily rate below 130 thousand dollars, according to reports.
Signed over the past weekend, the contract between Shell and Queiroz Galvão anticipates drilling an exploratory well in Alto de Cabo Frio Oeste, Sul Gato do Mato, and two stimulation wells in the BC-10 area. The strategy for an even lower price than practiced in the market was motivated by the fact that the Brava Star will be idle starting in August, when it will complete the charter contract with the Brazilian state-owned company Petrobras. This contract had been in effect since 2015. The below-market price surprised everyone and was able to beat giants like Seadrill.
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Even with a relatively low value, this contract ensures an important strategic gain for Queiroz Galvão, which is having a charter contract with an IOC in its portfolio, even if the profit margin is very low. For its part, Shell ensures the charter of a unit with a higher local content. By the end of 2018, Queiroz will be finishing the contract with two more units, bringing the total of five contracts to an end this year.
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Shell Hires Drillship from Queiroz Galvão

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