Petrobras' Search May Be a Boon for National Oilwell Varco

NEW YORK (TheStreet) -- In need of raising $15 billion due to rising costs associated with its offshore production projects in Brazil, Petroleo Brasileiro, also known as Petrobras (PBR), is reaching out for an investment partner with deep pockets.

According to a Sept. 10 article in the Wall Street Journal, PBR has asked Morgan Stanley (MS) to help it find a partner that would be willing to fork out as much as $4 billion to help it invest in state-of-the-art technology used for finding oil and gas deep down in "Davey Jones's Locker."

According to an article on the company's interesting Web site on Sept. 6, "...[P]roduction started at the Chinook field, in the U.S. Gulf of Mexico,  which is connected to the FPSO BW Pioneer (a Floating, Production, Storage and Offloading platform).

"The Chinook #4 production well was drilled and completed in Lower Tertiary reservoirs, a promising offshore exploration frontier in the Gulf of Mexico, at a depth of about 8,000 meters.

"This FPSO, located approximately 250 kilometers off the coast of the State of Louisiana at a water depth of 2,500 meters, is also connected to the Cascade field which initiated production in February 2012."

That's what I call "really deep drilling" -- 2,500 meters equates to around 8,000 feet deep, and the technology needed to operate at those depths is still semi-experimental and extremely expensive. In fact, it has been the risks and costs involved in this process and getting the oil it produces all the way to shore (175 miles away) that has made some of Petrobras' drilling partners shy away.

PBR owns nearly 67% of Chinook, and French energy giant Total (TOT) is its partner. The Chinook project is the first in U.S. waters to utilize a floating production, storage and unloading vessel that collects the oil at the surface where tankers can receive it.

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