Dril-Quip, Inc. announced that Dril-Quip do Brasil LTDA, its wholly owned subsidiary, has been awarded a four-year contract by Petrobras, Brazil's national oil company, for the supply of subsea wellhead systems and associated tools to be used in the drilling of deepwater wells offshore Brazil. Based on current exchange rates and after Brazilian taxes, the contract is valued at $650 million if all of the equipment under the contract is ordered. Amounts will be included in Dril-Quip's backlog as purchase orders are received under the contract.
Dril-Quip expects to begin delivering products under the contract in the second half of 2013. The contract is subject to customary terms and conditions for agreements of this type, including termination, extension, product inspection, local content requirements and price adjustment provisions. Dril-Quip is a leading manufacturer of highly engineered offshore drilling and production equipment, which is well suited for use in deepwater, harsh environment and severe service applications.