BW Energy Buys Aquadrill Semi-Sub Rig For $14M

BW Energy Buys Aquadrill Semi-Sub Rig For $14M
BW Energy has bought Aquadrill’s semi-submersible drilling rig Leo which will be repurposed for the company’s Kudu development.

Oil and gas company BW Energy has bought Aquadrill’s semi-submersible drilling rig Leo which will be repurposed for the company’s Kudu development.

The Leo rig, bought for $14 million, will be repurposed as a floating production unit meaning that it would remove it from the drilling market.

BW Energy stated in the announcement that it was currently working on a revised development plan for the Kudu gas field offshore Namibia.

The field was discovered in 1974 and is located about 80 miles offshore southern Namibia. It contains an estimated 1.3 TCF of gas. BW’s Kudu working interest is 95 percent while NAMCOR holds the remaining 5 percent working interest.

As for the new development plan, it specifies the use of a repurposed semi-submersible drilling rig as it will significantly reduce capital investments compared to previous development concepts.

“The revised development concept offers tangible financial, schedule, and environmental benefits. The re-use of existing facilities also supports a substantial reduction in field development-related greenhouse gas emissions compared to a new-build. We have consequently decided to take advantage of the availability of this high-quality semi at an attractive price. The replacement of imported power with domestic power produced with natural gas will reduce Namibia`s carbon footprint and ensure power stability for the future,” Carl Krogh Arnet, CEO of BW Energy, stated.

“We consider the electrification of the African economies as a significant long-term growth opportunity for BW Energy and a potential avenue for us to develop a new strategic position closer to the end customers of energy,” Arnet added.

BW Energy also said in the statement that the timing of the final project sanctioning was subject to realizing a project financing solution for the Kudu gas to power project.

In a separate company statement, Aquadrill said that if the unit was used to perform drilling services in the future, liquidated damages of $50,000 per day will apply under the terms of this agreement. This could lead up to a maximum of $6 million in damages if the unit is used to perform such services.

Furthermore, if within the first two years, this semi-submersible is sold on terms that do not exclude drilling purposes, and the resale price exceeds $15 million, the buyer would need to pay Aquadrill 50 percent of the amount exceeding $15 million.

Some pieces of the unit’s capital equipment like the BOP, top drive, and traveling block were excluded from the sale. If these spare parts are used for the firm’s existing fleet, savings of around $7 million are expected compared to purchasing equivalent replacement parts.

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