A deepwater drill ship. Norway's Seadrill aims to raise nearly $1-billion in an IPO in Brazil as part of its plans for the Brazilian offshore.
Norway's Seadrill, the world's biggest offshore oil driller by market value, plans to raise up to 1.7 billion reais ($971-million U.S.) through the sale of shares in its Brazilian unit, as companies in the sector prepare to tap surging demand for equipment and services in the oil-rich nation.
Rio de Janeiro-based Seabras, as Seadrill's wholly owned subsidiary is known, will sell as many as 65.2 million common shares at a suggested price of 20 reais to 26 reais each, it said in a filing. The amount includes additional and supplementary stock lots that banks are allowed to subscribe.
The company expects to price its share offering on Feb. 9. Shares are scheduled to start trading on Feb. 13 by the symbol "SEAB3.SA" according to the filing.
Brazil's oil sector will open a wealth of opportunities for equipment makers and service providers as it prepares to start extracting oil it found in a deep-sea offshore region known as the subsalt. That region could help Brazil more than triple output to 7 million barrels a day by 2020, putting the country within the world's top four oil producers.
Listing as a Brazilian company would give Seadrill access to a burgeoning capital market and subsidized state loans for the country's nascent oil services industry. Seadrill would also benefit from Brazil's local content rules meant to bolster local manufacturing and balance a natural resource boom.
The Norwegian company is seeking to clinch more long-term contracts with Brazilian state-controlled oil company Petrobras, the main operator of the subsalt, which is estimated to house more than 50 billion barrels of oil deep under a layer of salt rock.
Petrobras, which is undertaking the oil industry's biggest capital spending plan at $224.7-billion through 2015, is expected to become the world's biggest renter of ultra-deepwater floaters and rigs within the next three years, because of the technical challenges that imply extracting oil from the subsalt.
Seabras hired the investment-banking units of BTG Pactual to manage the offering, alongside Morgan Stanley and Citigroup.
The listing plans, which were announced late last year, come as Seadrill seeks to expand services offering in Brazil through joint venture with SapuraCrest, in which it has a 23-per-cent stake. Seadrill supplies floaters as well as high-spec jack-ups and a tender fleet used for offshore extraction.
SapuraCrest is seeking to strike agreements with Petrobras over five-year charters for three pipe-laying support vessels. Two of the vessels could be built overseas while one will be built in Brazil. The equipment should start operations by October, 2014.
If successful, the Seabras share offering could spark a stream of IPOs from more than 40 companies eyeing public listings in Brazil that were sidelined by turbulent global markets last year, according to exchange operator BM&FBovespa.