Petrobras cuts rig, reduces rates on second

Petrobras has agreed an early terminatation on its contract for Sevan Drilling's cylindrical drilling rig, the Sevan Driller.

The two firms also agreed to reduce rates on a second Sevan drilling rig, the Sevan Brasil, also on contract to Petrobras, to US$250,000/d from 26 February 2016 to the end of the contract period, July 2018.

Sevan Drilling said the move was a preferred alternative to potentially have both contracts terminated and exposing it to "a legal challenge with an uncertain outcome." 

The Sevan Driller has also found alternative work, namely, a well intervention contract with Shell in Brazil for 60 days, with two 30-day options, started in Q2 2016, and adding about $11 million in revenue backlog. 

As of 26 February 2016, Sevan's total contracted revenue backlog is estimated at $509 million, including the extension of the Sevan Louisiana contract amended in November 2014.

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