Expected growth in Brazil's oil industry is expected to help kick the offshore sector into gear — but US players are less than thrilled.
At Marine Money's Houston Offshore Finance Forum Wednesday, Tidewater chief executive John Rynd said making money in the South American country was a "dogfight" with the highest cost per day of any country the New York-traded company operates in.
"It’s tough. And you’re going to have to have Brazilian flag vessels,” Rynd said. “The activity appears to be ripening. We think it’s more of a 2020 event.”
Brazil is one of the world's largest offshore markets, but the oil industry there has suffered in recent years thanks in part to the corruption scandal known as Operation Car Wash.
But Petrobras' exploration and production rates are forecast to rise and oil majors are expected to enter the market. Both should raise the rig count, which is positive news for offshore companies mired in a multi-year downturn.
While Rynd said Brazil was a market Tidewater would "stay close to" and SEACOR chief executive John Gellert pointed out his company has a dozen PSVs in the market, neither Harvey Gulf International Marine nor Laborde Marine appeared interested in the market.
Harvey Gulf president Robert Gwinn said the company had yet to find an entrance point.
Laborde founder Peter Laborde said he would never go back to Brazil after building three vessels there 17 years ago.
“[I've] regretted it ever since,” he said.
"It's a very difficult environment," Laborde added. "It's not for the faint. The Brazilians have a certain way of doing things their way. It’s a challenge.
"Would I go back? Never.”
