A unit of General Electric Co. announced it is investing $54 million to become part owner of a ship drilling for oil off the coast of Brazil.
As the price of oil skyrockets, investors and explorers are drilling further offshore and in deeper waters for oil. The equity investment in offshore drilling is a first for GE Energy Financial Services.
GE Capital Markets, an affiliate of GE Energy Financial Services, is helping arrange $259 million in financing for Peregrine I, a deepwater drill ship to be bought by Mike Mullen Energy Equipment Resource Inc., a Dallas-based offshore assets investor, from a subsidiary of Houston-based Transocean Inc.
Peregrine I, which is under contract with Petrobras, Brazil’s largest company, is rated to drill in 5,200 feet of water to a depth of 25,000 feet.
Dan Castagnola, managing director at GE Energy Financial Services in Houston, said the escalating price of oil is spurring new offshore drilling. In addition, negotiating an extension on the use of the ship allows exploration to continue rather than waiting several years needed to build a drilling ship, he said.
