Petroleo Brasilero SA (PETR4), Latin America’s largest company by market value, plans to boost oil production by more than 50 percent over the next four years. To do so, it needs helicopters bigger than houses and floating platforms longer than two football fields.
The state-controlled oil company’s demand for heavy helicopters, used to move equipment and workers to platforms as far as 300 kilometers (186 miles) from the coast, will double in 2012 from 2011 and rise 350 percent over the next nine years, according to Barclay’s Capital. U.S. helicopter lessors Bristow Group Inc. (BRS) and Seacor Holdings (CKH) Inc. may benefit the most.
Petrobras, which produces 90 percent of Brazil’s crude, is spending more than any other oil company as it seeks to develop offshore fields located in the pre-salt area, so called because the deposits lie below a layer of salt two kilometers thick. The company has a $224.7 billion, five-year investment plan through 2015 to do so.
Repsol YPF SA (REP),
BG Group Plc and
OGX Petroleo e Gas Participacoes SA (OGXP3) also are seeking to develop the fields.
“Nowhere in the world looks like Brazil” for helicopter and vessel companies offering support to off-shore drillers, said James C. West, an analyst with Barclay’s Capital. “Winning lease contracts from tenders announced recently by Petrobras, and others expected early next year, would be a positive” for Bristow and Seacor shares, he said in a Nov. 28 phone interview from
New York.
Ocean Depths
Petrobras’s demand for rigs capable of drilling in ocean depths of more than 2,000 meters is expected to grow by 147 percent between 2010 and 2015, to 37, according to a Sept. 25 presentation by Mauro Yuji Hayashi, the company’s exploration and production pre-salt planning manager. The company’s heavy helicopter needs will climb to more than 40 in 2012 from the current 20, according to Barclay’s West.
A Sikorsky S-92 heavy helicopter costs $17.7 million, according to the website Aircraftcompare.com.
Bristow’s global helicopter fleet numbers more than 550 worldwide, according to Senior Vice-President Mark Duncan, who oversees new business. The Houston-based company has six leased helicopters in
Brazil, all operated by Belo Horizonte-based Lider Aviacao Holding SA, 42.5 percent owned by Bristow and the country’s largest provider of helicopter services, Duncan said.
“We entered into Lider in 2009 when we saw the increased demand in Brazil,” Duncan said in an e-mailed response to questions. “We saw it as having growth potential similar to the
North Sea in the mid-1970s. The pre-salt will be a new dimension.”
Recent Contract
Five more Bristow medium-size helicopters will start operating in Brazil next year under a recent contract, Duncan said. Petrobras has a bid in progress for six to eight heavy helicopters. Such choppers generate average revenue of $1.5 million to $2 million per month, while prices in local markets may vary widely, he said.
The total global fleet of helicopters servicing offshore oil and gas companies is about 1600, Duncan said, estimating annual revenue at about $4 billion.
Medium-size helicopters are used to fly 10 to 12 passengers as far as 120 miles. To reach the pre-salt fields requires heavy choppers than can handle 19 passengers. The Sikorsky S-92, which Lider leases out, is about 18 meters (60 feet) long and 5.5 meters high.
Rio de Janeiro-based Petrobras declined to confirm how many helicopters it will need in 2012 to “avoid influencing prices offered in tenders,” the company’s press office said in an e- mailed response to questions. The company currently has 91 choppers for off-shore activities, the statement said. It did not address a question about the contract mentioned by Duncan.