Petrobras Deploys Riverbed Equipment on Oil Platforms

While Stone Fox Capital has never been that big about investing in a stock based on individual customer deals, this win by Riverbed (RVBD) made us take notice. Petrobras (PBR) has become the global leader in oil exploration and one of the most respected companies in the world. The deepwater oil that they've found recently has set off a huge capital expansion program into Deepwater drilling. For them to use RVBD Steelhead appliances on 40 offshore oil platforms is worth noting.

The data collected from these platforms is mission critical and they'd likely spare all costs to find the best equipment around. They chose RVBD over likely competition from Cisco (CSCO) and all others in the industry and alternative sources of just hooking up more bandwidth. Best of Breed companies typically used Best of Breed vendors. RVBD has clearly set themselves apart from the competition.

RVBD has been a favorite stock in our Growth Portfolio going back into 2008. They continue to shine and show every reason that this company will continue to grow and prosper. The stock continues to trade along the 52 week high and should be bought on all pullbacks.

From the press release:

• Working closely with Decatron, an integrator versed in the implementation and support of Riverbed solutions and related consulting services, Petrobras deployed 43 Steelhead® appliances: 40 on the offshore platforms and three on the continent. The Petrobras IT organization also uses the Riverbed Central Management Console (CMC) for the configuration, upgrade and monitoring of these appliances. According to Lage, Petrobras deployed Riverbed WAN optimization rather than investing in expensive infrastructure, such as optical fiber undersea connecting offshore data to continent systems.
• After installing the Riverbed appliances, the backup window for the offshore oil-drilling platforms, which had reached 34 hours, was reduced to an average of four hours. This reduction released significant bandwidth for end-users to conduct day-to-day operations, such as accessing remote data and applications and audio-conferencing.

• Lage tested several WAN optimization offerings and chose Riverbed over its competitors because the Riverbed solution provided acceleration capabilities designed for not only improving end-user performance, but also accelerating the replication and backup of large amounts of data.
• On average, after installing the Riverbed solution, WAN traffic was reduced by 65%, freeing bandwidth for routine daily activities. The combination of the reduction in WAN traffic, QoS and Riverbed's ability to overcome network and application latency has given remote users LAN-like application performance.

Comments

[Mad Hedge F...:]

Good news! I ran into a couple of geologists from the Brazilian oil company Petrobras (PBR) who knocked my socks off when they told me about the quality of the crude they were pulling out of their new deep offshore Tupi field. They are drilling at 20,000 feet and getting 15,000 barrels a day of hot, light sweet crude blasting back in their faces under its own pressure; the kind of premium crude you normally only find in the Middle East. Overall, the company plans to boost production from 2.4 million barrels/day today to 3.6 million in five years and 5.7 million in ten years, or half of Saudi Arabia’s current production. I was unable to pin them down on the true cost of the offshore production, meekly claiming they didn’t break the figures out separately. They did admit, begrudgingly, that it is well below $40/barrel compared to the $80 offered by some industry analysts, and $9.20 for the company’s own weighted average cost. This confirms my belief that the next move in crude is up to $200, and then down to $10, as it is replaced by alternatives over time. Be sure to own PBR on the up leg.

Jun 10 10:24 AM

[blu:]

Max,
It has become obvious that you are using this forum to promote your own business.
Pasting in snipits (from your website) as comments may be ok with some, but I find it self-promoting and not particularly commendable.

Make some original comments.... or refer readers to your website.
The redundancy of your posts on various topics is annoying.

Jun 10 11:59 AM

[Stone Fox C...:]

Mad,
Though my article was focused on RVBD, PBR and deepwater drilling is another area of interest. Your comments seem to not support oil moving up to $200 if PBR is able to produce oil sub $40. One support for really high oil is that it costs so much to drill for the new oil in the deep oceans. If not, it makes me wonder.

Jun 10 04:35 PM