The oilfield services piece of the biggest business empire in Brazil — that belonging to billionaire Eike Batista — is profitable again as the world’s energy companies get serious about developing hydrocarbon resources off the South American coast.
Batista’s oilfield services company OSX (think ship-building, operational services etc.) doesn’t trade in the United States, but its ability to turn its business around is a good sign for Batista’s other energy companies, especially independent oil driller OGX (OGXPY, quote), which is naturally aligned with the field services environment.
OSX lost $11.3 million (BRL 21.7 million) in the first quarter of 2011 but is now operating at a narrow but positive margin of $5.5 million (BRL 10.5 million) in the recently concluded reporting period.
As an indication of how much rigging is going on in the South Atlantic, net revenue surged to $54.9 million (BRL 105.7 million) from the dismal $4.5 million (BRL9.5 million) reported in the previous year.
And Batista evidently wants more. Capital investment in the first quarter totaled $108.6 million (BRL 209.2 million) as OSX pursues ambitious projects like a state-of-the-art shipyard to build more rigging vessels.