Seadrill Reviews Rig Operations for Third Quarter

West Epsilon
(Click to Enlarge)

West Polaris
(Click to Enlarge)

West Taurus Ultra-Deepwater Rig
(Click to Enlarge)

West Hercules
(Click to Enlarge)

Seadrill has provided an operational update in its third quarter results.

Mobile units

Seadrill had 12 mobile rigs in operation in whole or part of the third quarter. In Norway, the semisubmersible rigs West Alpha and West Venture continued drilling operations for StatoilHydro while the ultra-deepwater drillship West Navigator worked for Shell on the Ormen Lange field. The ultra-large jackup West Epsilon continued operations for StatoilHydro. In the Gulf of Mexico, the newbuild deepwater semisubmersible rig West Sirius commenced operations for ATP on a sublet from Devon Energy late July following the transit from Singapore.

The utilization rate since commencement for the unit has been 93 percent. In Africa, the jackup West Ceres continued the drilling operations offshore Nigeria for Total. In Southeast Asia, the jackups West Janus and West Prospero worked in Malaysia for Petronas and Exxon respectively whereas the jackup West Larissa drilled for VietsoPetro in Vietnam.

The newbuild jackup West Ariel delivered from PPL in June has been in operations for PTT since mid July. In Australia, the jackup West Atlas continued the operations for Coogee while West Triton carried out operations under the Apache-contract. Mid October, West Triton suffered a punch through and damaged one leg. The unit resumed operations in mid November.

Tender Rigs

Seadrill's self-erecting tender rigs were all in operation during the quarter. In Southeast Asia, the tender rig barge T4, T7 and T11 worked for Chevron in Thailand. In Malaysia, the semitender West Alliance continued its operations for Shell, the semi-tender West Setia was on contract with Murphy while the semi-tender West Berani worked under the contract with Newfield on an assignment for Nippon. In Brunei, the semi-tender West Pelaut continued operations for Shell. In West Africa, the tender barge T8 and the semi-tender West Menang
continued operations for Total in Congo.

Well Services (Seawell Limited)(74% ownership)

Seawell is a company providing drilling and well services with its core business being platform drilling, drilling facility engineering, modular rig, well intervention and oilfield technologies. Seawell currently operates on nearly 50 installations in the North Sea and has offices in Stavanger, Bergen, Aberdeen, Newcastle, Houston, Esbjerg and joint ventures in Abu Dhabi and Kuala Lumpur. The overall activity level was sound in the third quarter but
slightly lower than the previous quarter of 2008.

Operations in Associated Companies

Varia Perdana Bhd.

Varia Perdana Bhd. owns five self-erecting tender rigs that were all in operation during the quarter. The tender barge T3 and T10 worked for PTT and CarigaliHess respectively in Thailand whereas in Malaysia, the tender barges T6 and Teknik Berkat worked for Petronas Carigali and T9 worked for Exxon.

Sapura Crest Bhd

Seadrill currently owns 288,364,800 shares in the Malaysian oil service provider Sapura Crest Bhd that corresponds to an ownership interest of 24.6 percent. Sapura Crest owns 51 percent of Varia Perdana Bhd. Based on closing price November 21 on the Malaysian Stock Exchange, Seadrill’s holding in SapuraCrest has a gross value of some US $63 million with US $62 million in unrealized losses compared to the average purchase price. The shares are at September 30 recorded as investment in associated companies in the balance sheet as opposed to being booked as marketable securities at June 30 due to the ownership exceeding 20 percent.

Scorpion Offshore Ltd.

Seadrill currently has a holding of 23,828,092 shares and forward contracts corresponding to 39.65 percent of the outstanding shares. The total ownership percentage has been calculated based on an issued share capital in Scorpion Offshore Ltd of 60,100,955 shares. Scorpion owns and operates four jackups and has 3 jack-ups and one semisubmersible drilling rig under construction. Based on closing share price on November 21 of Scorpion on the Oslo Stock Exchange, Seadrill's exposure, including the shares covered by the forwards, has a gross value of some US$40 million with US$275 million in unrealized losses.

New Contracts and Dayrates

Seadrill has through the quarter been awarded several jackup and tender rig contracts. In August, the jackup West Ceres was awarded a one well assignment by Tullow for operations in Ghana at an agreed dayrate of US$220,500.

In September, Seadrill was awarded a five-year firm contract for the semi-submersible tender rig West Alliance for operations in Southeast Asia with contract commencement in January 2010 in direct continuation of existing contract. The agreed dayrate is US $170,000. Further, Seadrill was awarded a contract by VSP in Vietnam for the jackup rig West Ariel.

The assignment covers 10 wells with expected duration of 18 months at dayrate US $183,500. The Seadrill operated tender rig T9 has been awarded a three-year contract extension with ExxonMobil. Commencement of the extension is scheduled to mid January 2009 and agreed dayrate is US $139,000.

Late October, West Prospero initiated a 25 days assignment for Talisman in Malaysia at dayrate US $130,000. The unit will thereafter undertake a 4-5 weeks yards-stay in order to extend the legs. Following the extensions, the operational water depth for the unit will be 400ft.

Newbuild Program

Seadrill has taken delivery of three deepwater units since July this year when the drillship West Polaris left the Samsung yard heading for its first assignment for Exxon in Brazil.

West Polaris commenced operations early October, at the same time the semisubmersible rig West Hercules was delivered from the DSME yard in Korea. West Hercules commenced operations for Husky in China early November, the same week as the semisubmersible rig West Taurus was delivered from Jurong Shipyeard in Singapore. West Taurus is in transit to its first drilling assignment in Brazil with anticipated start-up of drilling operations in February.

Following these deliveries, the remaining newbuild program includes 13 units of which two are ultra-deepwater drillships, four ultra-deepwater semisubmersible rigs, three tender rigs and four jackups. The delivery schedule is two newbuilds in 2008, one unit in early 2009, eight newbuilds in 2010 and two in 2011.

For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Expertise: Electrical Technician
Location: Odessa, TX
Senior Air Quality Engineer
Expertise: Chemical Engineering|Environmental Engineer|Mechanical Engineering
Location: Kennesaw, GA
United States Duncan MFG: Entry Level Electrical Assembler - Sr. Electrical
Expertise: Electrical Technician
Location: Duncan, OK
search for more jobs

Brent Crude Oil : $50.79/BBL 1.30%
Light Crude Oil : $49.96/BBL 1.10%
Natural Gas : $2.77/MMBtu 2.12%
Updated in last 24 hours