SÃO PAULO, BRAZIL, March 26, 2012 – In its third major assignment in service of Brazil’s offshore energy sector in the past three months, Milbank, Tweed, Hadley & McCloy LLP represented the lenders in the US$692 project financing to purchase a deepwater drillship to be chartered to Brazil’s Petrobras (Petróleo Brasileiro SA).
Milbank represented Deutsche Bank AG London Branch, Nomura Securities International, Inc., Morgan Stanley Senior Funding, Inc. and Mizuho Corporate Bank, Ltd.
The transaction is structured as a project financing to Dleif Drilling LLC, a subsidiary of the Schahin Group. Dleif is using the funds to purchase a deepwater rig christened the Sertão, which in turn will be chartered to Petrobras for drilling off Brazil’s northeast coast, where some of the world’s richest offshore oil and gas deposits have been discovered. Currently under construction by Samsung Heavy Industries of Korea, the Sertão will be able to operate in waters up to 9,800 feet and drill to depths up to 37,400 feet, or more than seven miles below the sea surface.
“Drillships such as Sertão are critical parts of Brazil’s offshore exploration of energy resources, and we expect to see continued financings in this sector throughout 2012 ” said Milbank project finance partner Dan Bartfeld, who together with partner Jay Grushkin led the financing with a group of attorneys in New York and London.
Jay Grushkin added “The discovery of massive oil and gas reserves off Brazil’s northern coast has caused a huge shift in the world’s energy markets. Milbank’s longstanding expertise and presence in Latin America has given us a major advantage in working with leading global financial institutions eager to participate in key projects such as the financing of Brazil’s energy infrastructure.”
This past December, Milbank acted in two other major Brazilian offshore financings: a project financing for the Schahin Group to purchase the Black Diamond I deepwater drillship, and a project financing of a Floating Production, Storage and Offloading (FPSO) unit to be deployed on the Tíro and Sidon oil fields off the coast of Brazil. Both the deepwater drillship and the FPSO unit will also be chartered to Petrobras.
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