No doubt, oil service stocks have had a big run, up 78% on average since the January 2007 low, as evidenced by the chart below…
(click to enlarge)
What makes this most interesting is that Petrobras, the state owned Brazilian oil company has contracted 80% of deep water oil service deep water drilling capacity. The Bloomberg article reports…
“The oil majors have their backs against the wall as Petrobras has aggressively locked up significant rig capacity,” said Omar Nokta, head of maritime research at Dahlman Rose & Co. in New York.
Petrobras is negotiating for as many as 17 more vessels to probe the Tupi discovery and neighboring fields, said Bill Herbert, an analyst at Simmons & Co. International in Houston. The company already controls almost seven times as much capacity as the next biggest user of rigs that can drill in 7,500 feet of water, according to research by Dahlman Rose.
Seems like Brazil, unlike the United States, understands the importance of oil for many years to come. It also seems like oil drillers, especially deep water oil drillers are going to be very busy and charging lost of money for it.
