Good news, Shell contracts ship from Queiroz Galvão

Good news! Shell hires a ship from Queiroz Galvão. This shows that the oil and gas market is heating up again.

Shell, an Anglo-Dutch multinational oil company, contracted the maritime unit, drill ship, Brava Star, from the company Queiroz Galvão Oil & Gas. The contract was signed for the drilling of four wells located in the Santos Basin, in the Alto de Cabo Frio Oeste and Sul Gato do Mato assets, where both were awarded in the sharing auctions. With a one-year term, the contract will start operating in 2019 with a daily rate of less than US$130, according to investigations.

Signed last weekend, the contract between Shell and Queiroz Galvão has the prospect of drilling an exploratory well in Alto de Cabo Frio Oeste, Sul Gato do Mato and two stimulation wells in the BC-10 area. The price strategy even lower than that practiced in the market was motivated by the situation that Brava Star will be idle from August, when the charter contract with the Brazilian state-owned Petrobras will end. Such a contract was in force since 2015. The price below the market surprised everyone and managed to beat giants like A Seadrill.

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Even with a relatively low value, such a 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. In turn, Shell ensures the chartering of a unit with higher local content. By the end of 2018, Queiroz will be finalizing the contract with two more units, with a total of 5 contracts coming to an end this year.

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Shell hires Queiroz Galvão rig