Petroleo Brasileiro SA, Brazil's state-controlled oil company, has leased about 80 percent of the world's deepest-drilling offshore rigs to explore prospects including the Western Hemisphere's largest discovery in decades.
Petrobras, as the Rio de Janeiro-based company is known, is hiring rigs that can drill in at least 9,800 feet of water, Chief Executive Officer Jose Sergio Gabrielli said this month. 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.
"The oil majors have their backs against the wall as Petrobras has aggressively locked up significant rig capacity," said Omar Nokta, head of maritime research at Dahlman Rose & Co. in New York.
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.
Business, Pages 85 on 05/18/2008