* Says activity off Brazil down due to Petrobras financial
* Says Brazil staff, equipment still tight for existing work
* Has not experienced payment problems
(Recasts lead, adds comment on Brazil by CEO, from analyst)
By Henrik Stolen and Joachim Dagenborg
OSLO, Feb 6 Brazil's Petrobras has
been awarding fewer contracts than expected as it seeks to
retain cash for future investments and to limit rising debt, one
of its suppliers, Fred. Olsen Energy, said.
The Norwegian offshore rig company posted a fourth-quarter
operating profit below expectations on Wednesday as its costs
increased due to higher repair and maintenance needed on its
fleet of drilling rigs.
Oil activity offshore Brazil has been a motor for growth for
many offshore drillers, oilfield service firms, seismic
surveyors and other companies, with Petroleo Brasileiro by far
the biggest oil company to offer work.
But to fight cost overruns on its $237 billion, five-year
expansion plan, limit rising debt and make up for more than $8
billion in losses in its refining unit, Petrobras is now
squeezing suppliers and investors by making them wait longer to
Fred. Olsen Energy, which has one drilling rig contracted to
the state-controlled firm, said activity had dwindled over the
past year as fewer contracts had been awarded.
"There has been lower activity throughout 2012, and this is
related to the strategic review of projects taking place in
Petrobras," Fred. Olsen Chief Executive Ivar Brandvold told a
news conference. "This is reflected in the contract activity."
Fred. Olsen shares were down 1.92 percent at 255.5 crowns at
1120 GMT, compared with a 0.35 percent gain on the Oslo
"The share is down mainly because they disappoint on
EBITDA," said Oslo-based analyst Oeyvind Hagen at ABG Sundal
"I think some people had also expected an increased
dividend, which they chose not to do. They are also quite
conservative on future dividends."
The company's operating profit fell to 394 million crowns
($71.7 million) from 542 million crowns a year ago and below the
463 million expected by analysts.
It will propose an ordinary dividend of 10 crowns per share
in May 2013 on top of an extraordinary dividend of the same
Fred. Olsen Energy, which operates nine rigs worldwide, has
not experienced payment problems with Petrobras, Brandvold said,
after presenting the quarterly results.
"We haven't seen that. We have read about it, but we haven't
experienced it ourselves," he said in an interview.
Despite the lower activity off Brazil, it is still hard to
get hold of all the equipment and staff needed to do the work
that is already contracted, he added. Petrobras requires that a
certain amount of contracted work have local content, in other
words include Brazilian suppliers.
"Everything is stretched. It applies at all levels,"
($1 = 5.4929 Norwegian kroner)
(Writing by Gwladys Fouche; editing by Jane Baird)