BG Group announced Thursday that it has received initial approval from the Brazilian Development Bank (BNDES) for up to $1.8 billion of long-term finance to fund part of the company’s interests in the pre-salt Santos Basin, offshore Brazil.
Subject to further approvals and the completion of a final agreement, the funding facility will be allocated to BG Group’s share of local procurement and construction costs for the eight floating production, storage and offload (FPSO) facilities that will be owned by BG Group and its Santos Basin partners.
The 150,000 barrels of oil per day capacity vessels are part of the wider first phase, fast-track development program in the Santos Basin that will deliver 2.3 million barrels of oil equivalent per day of capacity by 2017.
By the second quarter of 2012, BG Group expects to agree terms with BNDES on finance with a 14-year term.
“We are delighted to have received this initial approval from BNDES for long-term financing of up to $1.8 billion which will add to the diverse funding options already in place as we progress our global growth programme,” said BG Group Chief Financial Officer Fabio Barbosa.
“In particular, the funds will help underpin BG Group’s investments for the successful development of our world-class pre-salt Santos Basin interests. Finally, it also represents the support of one of the key players in the Brazilian government to our partnership with Petrobras and the country.”
Petrobras, the state-controlled Brazilian oil giant, announces the result of the negotiation with Sete Brasil and Ocean Rig, which had submitted offers for the charter and operation of drilling rigs to be manufactured in Brazil.
A source close to the matter told Reuters that Petrobras would pay an aggregate $76.3 billion over 15 years to lease the rigs.
The Company approved the contract for 21 offline rigs with Sete Brasil, at an average daily rate of US$ 530 thousand and the contract for 5 dual activity rigs with Ocean Rig, at the average day rate of US$ 548 thousand, both for a 15-year term.
All units, which have local content requirements ranging from 55% to 65%, are to be delivered within 48 to 90 months, according to the schedules established in the contracts. The project includes the construction of new shipyards in the country and the use of existing infrastructure.
The contract also includes the possibility of reducing average daily rates if PIS/COFINS exemption is granted and depending on the final financing conditions agreed between the companies and the Brazilian Development Bank – BNDES. Petrobras expects to reduce the average daily rates to US$ 500 thousand for the Sete Brasil contract and to US$ 535 thousand for the Ocean Rig contract. These amounts may suffer further reductions if the parties detect and agree to mechanisms that reduce operating costs.
With these contracts, the Company completes the plan to contract 28 drilling rigs to be built in Brazil to meet the demands of the long-term drilling program, primarily for use in pre-salt wells. Based on the conditions submitted by the companies and on the current demand for the development of future projects, the Company chose to take advantage of the negotiated conditions and contract five additional which were not originally planned.
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After the BRICS Interbank Cooperation Mechanism Annual Meeting and Financial Forum, Petrobras’ CEO, José Sergio Gabrielli de Azevedo, its CFO and Investor Relations Director, Almir Barbassa, and company executives were welcomed today (April 13) by the chairman of the China Development Bank, Chen Yuan, and his top aides.
During the meeting, they discussed mechanisms for cooperation between the Chinese bank and the Brazilian company.
The chairman of the CDB opened the meeting stating that the bank has loaned upwards of $14 billion to Brazilian companies, $10 billion of which to Petrobras, and stressed that the projects are being very well implemented. Chen Yuan highlighted the importance of the Brazil-China partnership and the need for transparency in the negotiations for further integration.
Petrobras’ CEO spoke of the strategic relations between the governments of Brazil and China, the importance of the credit that has been extended to the company, and the opportunities that are opening up in Brazil.
( Original Article )