AIOC has exercised its option within the existing Azeri contract with Abbot's main operating subsidiary, KCA DEUTAG. This follows on from the previous award for the Engineering and Procurement of Drilling Utilities, Quarters and Drilling Modules on DWG with an original value of approximately $10 million.
KCA DEUTAG's workscope on the DWG development is estimated at more than $50 million, extending over the 5 years of the contract. During the construction and commissioning stage KCA DEUTAG will provide technical support and assistance as well as undertaking pre-operational activity to ensure a seamless and trouble free start up of the rig. The DWG rig is currently under construction and due to leave the Mercon fabrication yard in Holland in early Q2 2006, with rig operations due to commence late 2007.
Commenting Alasdair Locke, Executive Chairman of Abbot said," This contract will consolidate Abbot's position as the leading offshore drilling contractor in the Caspian Region, and justifies our long term investment and commitment to the region over the past 8 years. By 2006 the value of our business from the Caspian region will be in excess of $80 million per annum, and we will be employing more than 450 Azerbaijani staff from our office in Baku.
These long-term offshore contracts together with those in the North Sea, Angola and Sakhalin provide the Group with a strong and consistent revenue stream to 2012 and beyond. This revenue stream provides an excellent base which, together with improving margins for our land rig fleet, will positively affect the Group's performance in the future."
Currently KCA DEUTAG is carrying out drilling operations on the Chirag and Central Azeri platforms with the West Azeri and East Azeri drilling rigs in pre operations mode, all for AIOC. KCA DEUTAG is also supporting Shah Deniz pre operations for the Shah Deniz gas development contract, operated by BP. In addition KCA DEUTAG also has a contract with Agip KCO for drilling operations on an artificial island, offshore Kazakhstan, in the Kashagan field, in the northern Caspian Region.
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