Petrobras S.A. PBR, a state-owned energy company of Brazil, has awarded two drillship contracts to Constellation Oil Services. The contracts were awarded for two ultra-deepwater drillships, Laguna Star and Tidal Action. The value of the contracts came in at approximately $1 billion. The contracts cover mobilization fees and provisions for any additional services that Petrobras may request. These agreements also include an option for contract extension.

The drillships are expected to begin contracts with Petrobras in the third quarter of 2025. Laguna Star is currently working for Petrobras with its term ending in the first half of 2025. The drillship will undergo the necessary adjustments and class inspections before beginning its new assignment with the energy firm of Brazil. Laguna Star is a part of Constellation’s rig fleet. The Tidal Action drillship is a newly constructed rig at the Hanwha Ocean shipyard in South Korea. Both rigs will be deployed at the Roncador Field in the Campos Basin and will work for 2.5 years under the new contract with PBR. 

Previously known as West Libra, the Tidal Action drillship was one of the last high-specification rigs to be constructed in the previous rig-building cycle. The rig will be owned by Hanwha Drilling post-construction at the Hanwha Ocean shipyard. For the new contract with Petrobras, the rig will be managed by Constellation Oil Services. Constellation has highlighted that this is the first time it will be managing an ultra-deepwater rig from a third-party owner.

Laguna Star is a sixth-generation, ultra-deepwater DP drillship capable of operating at a depth of 10,000 feet underwater. It has a maximum drilling depth of up to 40,000 feet underwater. Tidal Action is a seventh-generation drillship, capable of operating at depths of 3,600 meters underwater.

PBR’s Zacks Rank and Key Picks

Currently, PBR carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the energy sector are PEDEVCO Corp. PED, TechnipFMC FTI and VAALCO Energy EGY. PEDEVCO presently sports a Zacks Rank #1 (Strong Buy), while TechnipFMC and VAALCO Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. PED stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a record high of $13.9 million in the second quarter of 2024, indicating a year-over-year increase of 4.51%. This growing backlog ensures strong revenue growth for FTI.

VAALCO Energy is an independent energy company involved in upstream business operations with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Acreage of Canada, EGY’s production outlook seems bright.

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Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report

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