New Brazilian drilling contractor created as rig market heats up

A new Brazilian drilling contractor has emerged out of a major restructuring process that saw local oilfield services provider Ocyan spun off its rig business.

Bondholders including AIG Asset Management, Contrarian Capital Management, Moneda and Allianz agreed to convert $2.7 billion of Ocyan debt into capital, giving birth to a new entity responsible for owning and operating five rigs.

With a backlog order of $2.4 billion thanks to long-term charters for the semi-submersible rig Norbe VI and the drillships Norbe VIII, Norbe IX, ODN I and ODN II, Foresea replaces Ocyan in the drilling arena and is looking for opportunities to win contracts abroad.

“Foresea is a drilling company with financial robustness, an excellent team and efficient operations, which are pillars for sustainable growth,” said chief executive Rogerio Ibrahim.

“We started our activities with a consolidated structure that will allow us to take advantage of the current expansion of the oil and gas segment in Brazil and worldwide.”

The name Foresea is the playing of words foresee and sea, creating an entity that claims to know the sea so well that it is able to foresee situations within it.

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The company has a workforce of about 1600 people that, for the most part, were professionals who were part of and leaders in Ocyan’s drilling segment.

Besides the five rigs currently in operation to Brazilian state-controlled company Petrobras and leading independent Prio, Foresea also has a contract to operate the semisub Hunter Queen, formerly known as Capricorn.

Prio acquired the rig from Aquadrill Offshore for $40 million and hired Foresea to operate it for drilling operations in the Campos basin.

As part of the agreement to convert debt into equity, bondholders will also invest $197 million into the operation of the five rigs. Ocyan will remain with a 6.64% interest at Foresea.

The deal includes only the drilling rig segment, with Ocyan keeping its remaining business, which includes floating production assets, subsea engineering, procurement, construction and installation, and offshore maintenance services.