Petrobras is Hoarding the World's Deep Sea Drillers

Wow, interesting factoid via Bloomberg<!----> - Petrobras (PBR) has leased 80% of the world's deepest sea drilling rigs. I mentioned when I sold off Diamond Offshore Drilling (DO) I was very interested in moving that money (on a pullback) to Noble Energy (NE) due to its Petrobras connection [Apr 25: Bookkeeping: Selling Diamond Offshore Drilling - Will buy Noble Later] but frankly it looks like every driller is going to have a Petrobras connection at this rate. Again, Petrobras in my book, will become the largest company (by market capitalization) on the planet (surpassing Exxon) [May 13: Petrobras (PBR) Business as Usual]


Why
do we care about this news? We like... no... love shortages (as
investors). Shortages create higher prices. Shortages of deep sea rigs
mean higher prices for rig operators - think Transocean (RIG), Diamond Offshore (DO) and Atwood Oceanics (ATW) specifically. Also some Pride International (PDE) and Noble (NE) thrown in there....

• Petroleo Brasileiro SA, Brazil's state-controlled oil company, leased about 80 percent of the world's deepest-drilling offshore rigs to explore prospects including the Western Hemisphere's biggest discovery in decades.
• Petrobras, as the Rio de Janeiro-based company is known, is hiring rigs that can drill in at least 3,000 meters (9,800 feet) of water, Chief Executive Officer Jose Sergio Gabrielli said in an interview last week. The world has 21 such vessels, according to Rigzone.com, which tracks the offshore drilling industry.
• The company's ``insatiable'' demand is forcing producers including Exxon Mobil Corp. and BP Plc to pay more as they compete for the remaining units, said Kjell Erik Eilertsen and Truls Olsen, analysts at Fearnley Fonds AS in Oslo. Explorers that don't have rigs under contract may delay projects or pay rents of more than $600,000 a day.
• Petrobras is negotiating for as many as 17 more vessels to probe the Tupi discovery and neighboring fields, said Bill Herbert, an analyst at Simmons & Co. International in Houston. The
  company already controls almost seven times as much capacity as the
  next biggest user of rigs that can drill in 7,500 feet of water, according to research by Dahlman Rose.
• U.S.
  and European oil companies probably will pay $50,000 more per day to
  lease deepwater rigs during the next three years because Petrobras has
  already contracted for so much of the worldwide fleet, Nokta said. Such
  units are designed to cope with high seas and hold equipment needed to
  bore beneath the seafloor and identify oil and gas deposits as much as
  6 miles below the ocean surface.
• Petrobras has signed leases this year for six deepwater rigs, more than twice as many as any other producer, according to Dahlman Rose. The contracts have an average duration of five years and four months at rates of $410,000 to $580,000 a day.
• Exxon Mobil leased Seadrill's West Polaris unit last month for $600,000 a day, Nokta said. BP agreed on May 1 to pay $540,000 a day for a Pride International Inc. drillship, $60,000 a day more than the company committed to three months earlier for an identical Pride rig, he said.
• Petrobras plans to start pumping oil in the first quarter of 2009 from Tupi, the biggest find in the Americas since Mexico's 1976 discovery of
  the Cantarell field in the Gulf of Mexico. Petrobras also is evaluating
  as many as seven nearby fields, including the Carioca prospect,
  Gabrielli said.