WATCH: Foresea rig comes to Brazilian shipyard ahead of its drilling gig with Petrobras

Brazilian offshore drilling player Foresea has sent one of its drillships to undertake a 15-year special periodic survey (SPS) at the Rio Grande Shipyard, where the rig will get ready for its new assignment off the coast of Brazil, which is slated to begin next quarter with the state-owned energy giant Petrobras.

Ocyan confirmed the completion of its restructuring process in June 2023, which separated its drilling business into a new company, temporarily called DrillCo. The business side, which covers offshore production, subsea construction decommissioning, maintenance, and offshore services, remained fully at Ocyan. The Brazilian player was also interested in integrating new energies and services into its portfolio. DrillCo emerged as Foresea in June 2023 with a contract backlog of $1.8 billion at the end of the period.

Reflecting on this journey, Rogério Ibrahim, CEO of Foresea, noted: “A year ago, we were a business unit transforming into an international offshore drilling company, with new capital structure and shareholders who trusted our expertise. Today, we’re reciprocating that trust by creating value for them. Our successful first year has solidified our leadership position.”

The company’s Norbe VIII drillship came to Guanabara Bay on Friday, September 8, 2024. The rig has since started a maintenance cycle that will include a drydocking period in Rio Grande do Sul. Foresea points out that this will be the second time it will have one of its 240-meter-long drillships out of the sea.

The first such operation was carried out between June and August 2023, when its ODN I rig spent 66 days docking out of the water, as the drillship was completely removed from the sea in what the rig owner describes as “the most challenging and extensive” scheduled maintenance shutdown ever made by the company so far.

The Norbe VIII drillship docked earlier this month at the Rio Grande Shipyard for a scheduled stop at a dry dock. Once the rig’s 15-year SPS and contract preparation are over, the new deal with Petrobras is estimated to commence at the beginning of the fourth quarter of 2024. Previously, the drillship worked for the Libra consortium, which consists of Petrobras (40%), Shell (20%), TotalEnergies (20%), CNPC (10%), and CNOOC (10%).

Norbe VIII drillship arrives at the Rio Grande Shipyard for drydock maintenance

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Foresea recently won the Silver Seal in the Brazilian GHG protocol program, which evaluates and certifies companies that monitor emissions from their activities, for the publication of its complete inventory of greenhouse gas emissions for 2023. The drilling firm signed up for this program to reinforce its commitment to transparency, emission reduction, and continuous improvement of its operations’ energy efficiency.

Ibrahim elaborated: “Recently, Foresea won the Silver Seal in the GHG Protocol program, for the disclosure of its first inventory of greenhouse gas emissions. This is another important step towards reducing emissions, in the permanent search for the highest standards of excellence and sustainability in our operations. Joining the program is voluntary and reinforces our commitment to transparency. Foresea remains aligned with the ESG agenda, investing in research and innovation for the continuous optimization of its energy efficiency.”

The firm’s CEO believes the drilling sector will remain highly competitive in 2024, with increased demand and a stabilization of tariff recovery experienced earlier this year. While Brazil has 42 contracted drilling rigs, Foresea accounts for 18% of these rigs. With a solid capital structure, a fully contracted fleet, and an operational uptime rate of 98.2% in 2023, the company, which operates its fleet of drilling rigs, anticipates further growth.

In addition to its five proprietary rigs chartered to Petrobras, including the ODN I, ODN II, Norbe VI, Norbe VIII, and Norbe IX, the drilling firm also operates the Hunter Queen rig for PRIO, Brazil’s second-largest oil company. Foresea’s largest client is Petrobras.

“We are facing a new growth cycle in the oil and gas market, one of the most dynamic and robust sectors of the Brazilian economy, and Foresea is prepared to play a leading role in this movement. Our efficient and innovative operations, coupled with low debt levels, position us well. We are actively exploring business opportunities that align with our growth objectives. However, given our strong capital structure, we can carefully evaluate and wait for the optimal timing,” Ibrahim disclosed.

The company’s first financial report revealed a healthy position, with $141 million in cash and a profit of $65.8 million while its contract backlog stood at $1.6 billion. On August 6, 2024, the company said its fleet was 100% contracted and operating with a backlog of $1.4 billion as of June 30. The driller’s revenue efficiency was 94.9% in 2Q 2024.

Foresea’s hopes for further growth are fueled by Petrobras’ increase of exploration capex to develop new frontiers and expand production, with $73.5 billion earmarked for the period from 2024 to 2028. The Brazilian state-owned energy player also revealed its giant tender for subsea trees in July 2024. This $500 million-plus tender is for 82 subsea trees.

The firm plans to have 14 additional FPSOs by 2028 and intends to drill 50 new wells between 2024-2028. As a result, 25 new wells will be drilled in Southeast Basins, 16 in the Equatorial Margin, and 9 in other countries. The ‘Strategic Plan 2024-2028‘ emphasizes Petrobras’ intention to dish out $102 billion over the next five years, with $11.5 billion earmarked for projects propelling its decarbonization agenda forward. 

With 74% of its fleet contracted until the end of 2026, Foresea highlights that its historical average fleet utilization is 95.5% and the average contract tenor is estimated at 2.4 years.