VetcoGray, a GE Oil & Gas business, has signed a four- year frame agreement with OGX Petroleo e Gas to supply subsea wellhead systems and casing strings for an exploratory drilling campaign that could include more than 50 wells offshore Brazil. The drilling campaign has the potential to significantly increase Brazil’s oil discoveries.

Created in 2007, in response to growing interest in major oil reserve discoveries off the Brazilian coast, OGX is the country’s largest independent oil company. OGX has already secured long-term contracts with four semi-submersible drilling rigs to conduct a massive four-year offshore exploratory drilling campaign that has a potential for up to 51 wells to be drilled in several blocks located in Santos, Campos, Espírito Santo and Pará-Maranhão basins offshore Brazil.

OGX has the exploration rights in 22 offshore high-potential blocks, with 4.8 billion barrels of oil equivalent (boe) of total estimated risked recoverable resources of oil and natural gas. Brazil has current proven oil reserves of 11.8 billion barrels, according to the U.S. Energy Department, not including the recent large discoveries in the pre-salt provinces.

The frame agreement with OGX, one of the largest agreements VetcoGray has ever secured in Brazil, will cover the supply of MS-700 and MS-800 subsea wellhead systems, including large bore casing strings, associated rental tools and onshore and offshore assistance during the entire drilling campaign.

The order for the initial six wells already has been placed and first delivery is planned for July 2009. The wellheads will be manufactured at VetcoGray's Jandira Plant located in São Paulo state, Brazil and the casing strings package will be fabricated at the service center located in Macaé, Rio de Janeiro state.

The industry’s first all-metal sealing subsea wellhead system, the field-proven VetcoGray MS-700 meets demanding requirements for high-pressure critical service, deepwater drilling and production.

“The OGX award confirms VetcoGray’s leading position resulting from the outstanding performance of its MS-700 subsea wellhead systems as well as the world class support services offered to the Brazilian and global market,” said Fernando Martins, VetcoGray’s vice president for the Latin American region. “The contract demonstrates OGX’s confidence in VetcoGray as a leading supplier of subsea wellhead systems and services.”

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