Petrobras To Spend $4.6B On 7 Rigs

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Petrobras, Brazil's state-run oil company, said it has approved a contract that will see the company spend $4.6 billion on seven rigs to be used for deepwater drilling. Brazil-based Estaleiro Atlantico Sul was the winner of the bidding process, Petrobras said.

Petrobras (PBR) announced the contract on Friday. ''The final price for each rig was $662.4 million and projections are that they will enter into operation in 2015,'' the company said. The rigs will be used to tap Brazil's oil-rich pre-salt fields, which Brazil is looking to to bolster its oil output in an effort to become a major global oil producer.

Due to requirements set forth by Brazil's government, rigs used by Petrobras must contain at least 20% materials that are domestically produced. The contract for seven rigs is part of the company's plans to purchase or charter 28 rigs. Of the 28 rigs, Petrobras plans to acquire just eight of the units and permanently hire the rest from a newly created holding company, according to Fox News Latino.

Petrobras estimates that construction of the first seven rigs will create 32,000 direct and indirect jobs over the next eight years, as well as another 10,000 jobs once the rigs enter into operation, Fox reported.