Developed by the Deepwater Technology Group (DTG), the KFELS SSDT3600-GOM-C42 will be the fourth vessel in the series of successful SSDTs that have been gainfully deployed in this region.
Valued at US$94 million, Keppel FELS and Smedvig Asia will own and operate the ultra deepwater semi tender on a 72/28 basis respectively.
The newbuild is due for completion in the third quarter of 2005.
Under the agreement, Keppel FELS will build the rig, while Smedvig Asia will contribute the drilling equipment. Smedvig will also be responsible for marketing, managing and operating the rig for a 10-year period during which time it has an option to purchase Keppel FELS' stake in the rig.
This co-operation agreement is similar to Keppel Shipyard's arrangement with Smedvig Asia to build SSDT West Alliance in 2001. In that project, Smedvig Asia exercised its option to purchase Keppel Shipyard's stake in the SSDT upon project completion.
Mr. Tong Chong Heong, MD & COO of Keppel O&M, said, "With E&P activities moving farther offshore into deep and ultra-deep waters, we decided to embark on this construction partnership as part of our strategy to meet anticipated growing demand.
"The KFELS SSDTs have improved motion characteristics and larger variable load capacity and deck space, which give operators greater flexibility in the exploration and production (E&P) of offshore oil and gas.
"These qualities have opened up new opportunities for tender rigs to work alongside Tension Leg Platforms (TLPs) and Spars which operate in deeper waters.
Mr. Staale Roed, Managing Director of Smedvig Asia, agreed, "In view of this anticipated market development, we have defined a strategy for the renewal and modernization of our tender rig fleet. We chose to build with Keppel because their three earlier SSDTs have proven to be successful with operators."
The three semisubmersible tenders are West Alliance, West Menang and West Pelaut. West Alliance is currently being deployed by Unocal, a US oil and gas E&P company; while West Menang and West Pelaut are on charter to Brunei Shell/Total and Brunei Shell respectively. These units are performing with a high level of efficiency.
The KFELS SSDT3600-GOM-C42 will be a further enhancement to its predecessors, incorporating the latest technological advances in six-column drilling tenders and self-erecting column stabilizers. It is developed for deployment in severe environments and ultra-deep waters like Campos Basin of Brazil, Gulf of Mexico, North West Shelf of Australia, Timor Sea and offshore Angola.
KFELS SSDT series of semisubmersible drilling tenders provides for mud pits, bulk storage, mud pumps, power generation, cementing unit, laydown and storage areas as well as accommodation for the drilling crew. They also have enough variable deck load capacity to be self-contained without the need for other supporting barges to transport the Derrick Equipment Set (DES), equipment, mud and drilling fluids to site.
The cooperation agreement is not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation for the year ending December 31, 2004.
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