China Oilfield Services' Deepwater Rig Project to be Delayed

HONG KONG (Dow Jones Newswires), December 5, 2008

China Oilfield Services Ltd. said Friday construction of one of the deepwater drilling rigs previously ordered by its recently acquired unit, Awilco Offshore ASA, will be delayed.

Chen Weidong, executive vice president of China Oilfield, told Dow Jones Newswires the construction "will certainly be delayed," but declined to say by how long.

"The semisubmersible is a new type of rig, so it involves a lot of changes at the design stage," Chen said. "There were also some coordination problems when the order was still handled by Awilco - before we acquired it."

The delay isn't related to recent plunging crude oil prices and cutbacks by some oil companies on cost concerns, he said.

Awilco said earlier it has ordered three jackup rigs and three semisubmersible rigs, which will be built at the Yantai Raffles Shipyard in Shandong province, northeastern China.

Yantai Raffles isn't immediately available for comment.

Construction of the rig, which is capable of drilling at depths of 2,500 feet, might be delayed to the second quarter of 2010 from 2009, a person familiar with the situation said earlier Friday.

StatoilHydro ASA has signed an eight-year contract with Awilco to lease the rig at a daily rental rate of around US$350,000, the person added.

Copyright (c) 2008 Dow Jones & Company, Inc.

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