Lula: Brazil to build rigs for South American oil companies

Rio de Janeiro, Agency
President Luiz Inacio Lula da Silva said Brazil now is capable of building oil rigs not only for state-controlled energy giant Petrobras but also companies in other countries, especially South America.

"We're going to make rigs here for other countries as well," Lula said Thursday during the inauguration of the P-57, an oil platform with a 180,000-barrel-per-day capacity that Petrobras is planning to bring online later this year.

The president said Brazil's shipbuilding industry, which became one of the world's largest in the 1970s but had been all but abandoned before he took office in 2003, has recovered once again and attracted foreign investment.

The P-57, a floating, production, storage, and offloading-type platform that cost $1.2 billion, was built by Brazilian shipyards with close to 68 percent domestic components.

"The platform's hull was converted from the Island Accord oil tanker at the Keppel Shipyard in Singapore between October 2008 and March 2010," Petrobras said in a press release.

The company added that the P-57 is the first in a new generation of offshore platforms that are to be used to develop massive reserves in Brazil's pre-salt cluster, so-named because the estimated 80 billion barrels of oil equivalent that area may contain are located deep below the ocean floor under a layer of salt up to 2 kilometers (1.2 miles) thick.

If the most optimistic estimates prove correct, the pre-salt deposits - located in a 160,000-sq.-kilometer (62,000 sq.-mile) area - could translate into a nearly six-fold increase in Brazil's current proven reserves of 14 billion barrels and transform the South American nation into a major oil power.

Lula recalled that Petrobras plans to invest close to $224 billion through 2014 - primarily to exploit those deepwater reserves - and therefore will have to commission numerous rigs and tankers.

"We're going to need a lot of tankers and a lot of platforms, and also a lot of shipyards to build them here," the former lathe operator and union chief said in a decidedly nationalist speech.

"And those Singapore companies are going to install more shipyards here because we have to build rigs here for many countries that need them, for South American countries and other countries that don't have our same technology," Lula added.

The president said shipyards in Singapore build equipment in Asia to attend to demand from countries like China, but noted that they will have to set up shop in Brazil to meet demand from South America and Africa.

Lula recalled that in recent years Brazilian and foreign companies have installed or rebuilt shipyards in his country to meet growing demand, nothing that the country previously had depended on imports.

"It was a Brazil that believed everything had to come from outside because it was better, prettier and cheaper," Lula said, noting that Petrobras arranged for its rigs to be built overseas.

"We're going to build the hulls for eight more rigs in (the state of) Rio Grande do Sul. In the coming years, we're going to build dozens of rigs and hundreds of support ships in the country," Petrobras CEO Jose Sergio Gabrielli said during Thursday's ceremony at the Brasfels shipyards in Angra dos Reis, southwest of Rio de Janeiro.