Davis Polk advised Odebrecht Drilling Norbe VIII/IX Ltd., a wholly owned project finance subsidiary of Odebrecht Óleo e Gás S.A. (OOG), in connection with its US$1.5 billion offering of 6.35% senior secured notes due 2021, which were issued pursuant to Rule 144A and Regulation S under the Securities Act. The note proceeds will be used to pay for the construction of two deep-sea drillships, which will be chartered to Brazil’s state-owned oil company, Petróleo Brasileiro S.A. (Petrobras) and operated by OOG.
A portion of the proceeds will be used to repay $1 billion in export credit agency and commercial bank project construction loans for the drillships. The two ships, Odebrecht Drilling Norbe VIII and Odebrecht Drilling Norbe IX, are currently under construction at a Daewoo Shipbuilding & Marine Engineering Co. shipyard in South Korea, and are scheduled to be delivered by the middle of 2011. OOG will use the ships to drill wells for oil and gas in water depths of up to 3,000 meters and to drill to a maximum depth of 12,000 meters below the seabed off the coast of Brazil. This project bond offering is the largest debt offering in Brazil to date in 2010 and one of the largest project bond issuances ever in Latin America.
OOG is part of the Odebrecht Group, which has been active as a service provider for the oil and gas industry for nearly 60 years. OOG is a leading Brazilian oilfield services company focused on providing integrated solutions to its clients in the exploration, development and production of offshore oil and gas fields. OOG was mandated in July 2008 by Petrobras, through an international public bidding process, to charter and operate two dynamically positioned ultra deepwater drillships for a period of 10 years.
The Davis Polk corporate team included partners E. Waide Warner Jr. and Manuel Garciadiaz, associates Gavin R. Skene, Joana G. Benjamin, Laura-Lee Atkinson-Hope, Derek T. Fears, Dessislav Dobrev and Steven R. Klar and foreign temporary associates Rodrigo Martone (admitted only in Brazil) and Artur Fernandes Andrezo (admitted only in Brazil). Partner Bjorn Bjerke and associate Xin Yu provided derivatives advice. Partner Po Sit and associate Anthony L. Oliva provided tax advice. Associate Catherine L. Martin provided 1940 Act advice. Inés Velasco was the legal assistant for the transaction. All members of the Davis Polk team are based in the New York office.
White & Case LLP and Souza, Cescon, Barrieu e Flesch Advogados advised the initial purchasers as to U.S. and Brazilian law, respectively. Dorda Brugger Jordis Rechtsanwälte GmbH, Constantakis Knowles and Maples and Calder advised OOG as to Austrian, Bahamian and Cayman Islands law, respectively.
