SBI Offshore Limited, together with its subsidiaries wishes to announce that China Sunrise Group Co. Ltd. (CSG) has appointed the Company as the lead contractor responsible for procurement of drilling equipment systems (DES) of a CS70 semisubmersible offshore rig.
Designed by Moss Maritime of Norway, the rig will be built in China. Guangzhou-based CSG, which will own the proposed rig, has entered into a memorandum of intent with the Company in relation to the exclusive appointment.
Intended for deployment in the North Sea (Norsok Compliance) at up to 11,811 feet (3,600 meters) water depth, the dual drilling semisubmersible will be the largest of its kind to be built in China to date. CSG has short-listed three state-owned shipyards in China to construct the rig. Work is expected to commence in the first half of 2015 for completion in 42 months.
The Company has signed technical agreements with two of the three short-listed yards and is expected to conclude a signed technical agreement with the third yard by mid-January 2015. Upon appointment by CSG, the successful shipyard is expected to enter into an engineering, procurement and commissioning (EPC) agreement by the first half of 2015 with the Company with respect to DES package. None of the Directors or controlling shareholders of the Company has any interest, direct or indirect, in the Appointment, other than through their shareholdings in the Company.
Due to the nature of the Appointment, the financial impact to the Group cannot be currently quantified. Assuming that CSG’s appointment of the yard and the latter’s EPC agreement with the Company are concluded as scheduled, the Company expects to recognize some initial revenue in the financial year ending Dec. 31, 2015 (FY2015), and the bulk of the project revenue over FY2016 to FY2018.
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