Foreign Companies Do Not Submit Proposals, and Brasfels May Purchase and Complete Sete Brasil’s Drilling Rigs

Contrary to Expectations, Borr Drilling and Seadrill Do Not Submit Proposals and Keppel Fels, Operating Brasfels, Emerges as Probable Buyer

According to Click Oil and Gas, on the last Wednesday, 03/27, offers for the acquisition of the four rigs were submitted that Sete Brasil decided to continue building at the Brasfels and Jurong shipyards.
Contrary to expectations, Borr Drilling and Seadrill did not confirm the bids for the rigs, and it is reported that Keppel Fels, the parent company of the Brasfels shipyard in Angra dos Reis (RJ), had made a proposal for Urca and Frade, the rigs under its construction.

The lack of bids from other international companies, such as Seadrill and Transocean, according to experts, is due to the same reasons that caused the absence of proposals from Borr Drilling and Seadrill; the difficulty for companies to convince their boards to undertake a deal considered high risk.
The lack of information is due to the high confidentiality in the delivery of bids due to the judicial recovery situation of Sete Brasil.

The proposal from Keppel Fels in the auction has no official confirmation, but it is speculated that it would be associated with a national operator, which would be Petroserv.

The reason for the association would be the knowledge that Petroserv has of Sete Brasil’s project, as it had a contract to operate the SS Frade rig.

The Shipbuilding Yards

Brasfels is building the SS Urca and Frade and is said to have presented a value 40% higher than that of Jurong, responsible for building the drillships Arpoador and Guarapari.
So far, it is not known if Sete Brasil received proposals for the drillships being built at the Jurong Shipyard in Aracruz (ES).

Keppel Fels’ strategy is entirely reasonable, aiming to reduce its accumulated losses due to the halt in construction; it would buy the rigs and ensure the completion of their construction, as well as secure two ten-year charter contracts with Petrobras, valued at US$ 299,000 per day, and then sell the units.

It is worth remembering that upon defining the deal, it must be approved by the creditors, according to Sete Brasil’s judicial recovery plan.
The minimum price established in the bidding document is US$ 554 million, and if the bids are lower than this amount, the matter will have to go through the creditors’ assembly for acceptance of the offered value.

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