Daewoo Shipbuilding to Build Drill Ships for Petrobras

December 16, 2009

Daewoo Shipbuilding to Build Drill Ships for Petrobras


 Daewoo Shipbuilding & Marine Engineering Co. will build more than $1 billion worth of drill ships for Petroleo Brasileiro (PBR), people familiar with the matter said Tuesday, making it the first South Korean company to get a contract from Brazil's state-run oil company.

"Daewoo Shipbuilding will sign a contract this week in Brazil, and there will be an official announcement this Friday," one of the people with direct knowledge of the matter told Dow Jones Newswires.

The deal may give the company an edge over other shipbuilders in future bids for offshore facilities for Petrobras, such as drill ships and floating production storage & offloading units, analysts said. However, Daewoo's bigger rivals such as Hyundai Heavy Industries Co. and Samsung Heavy Industries Co. could also get such orders from the Brazilian company, which plans to place more than $40 billion of orders for offshore facilities in the long term, Martin Song at Woori Investment & Securities said.

Daewoo Shipbuilding said that not counting the Petrobras order, it has so far this year received a mere $1.1 billion of new orders for four bulk ships, two ferries, three wind turbine installation vessels and two barges as struggling shipping companies held off orders for new vessels amid the economic slowdown. It had originally targeted $10 billion in fresh orders in 2009, down 15% from the previous year's $11.8 billion.

Copyright (c) 2009 Dow Jones & Company, Inc.