Brazilian oilfield operator surges back into profit

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.

Image courtesy Steven Straiton: http://www.flickr.com/people/st33vo/

Global Santa Fe Rig 140. A 2,800 foot all-weather, twin-hulled semi-submersible drilling vessel

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.

MPX (MPXEY, quote), Batista’s largely green power generation company, is less directly linked to OSX’s results.

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.

The goal here is famously to become “the Embraer (ERJ, quote) of the sea.”

Not a terrible ambition — and it’s the kind of entrepreneurial thinking that’s kept OGXPY shares performing better than giant, bureaucracy-laden rival Petrobras (PBR, quote) across the last year.