Seadrill says wins $4.1 bln Petrobras contracts - extended

Shares in oilfield services group Seadrill rose on Monday after the company won deepwater rig contracts worth up to $4.1 billion from Brazil’s Petrobras, a sum that exceeded analysts expectations. The contracts included deals for three separate drilling rigs with a duration of 18 rig years, Seadrill Ltd said in a statement. “Upon execution, these new contracts will increase Seadrill’s backlog to approximately $12 billion,” the Oslo-listed company said. Shares in Seadrill rose 3.37% to 144.75 krone ($28.79) by 0829 GMT, valuing the company at about 59.6 billion Norwegian krone ($11.85 billion) and outperforming the benchmark index which was down 1.1%.

Analysts said the contracts were better than expected, and that they could contribute to push forward by several years the day-rate peak in the deep sea market. “This was better than expected both considering duration and day-rates,” said analyst Anders Hagen at ABG Sundal Collier, adding that this would increase the likelihood, that the market will stay strong until 2015. “One can easily raise Seadrill to 165 krone,” Hagen added. Analyst Stian Eliassen at Carnegie said the day rates in the contract averaged 80,000 krone more, than his forecast. “An amazing deal,” he said.

“This is one of the most important assignments ever awarded to Seadrill,” CEO of Seadrill Management, Kjell Jacobsen, said. “Brazil will become one of the strategically most important areas of operations for the company in the years to come.” Total revenue potential for drilling rig West Eminence, scheduled for start-up in the first quarter of 2009, is $1.35 billion. Total revenue potential for the rig West Taurus is $1.42 billion, and start-up for operations offshore Brazil is also expected in the Q1 of next year. The rig West Orion is not expected to start operations in Brazil until the Q3 of 2010, and has a total revenue potential at $1.35 billion, Seadrill said. (Reuters)