Keppel O&M Secures Deployment For Jack-up Rig Pair

Keppel O&M Secures Deployment For Jack-up Rig Pair
Keppel Offshore & Marine has secured utilization deals for two KFELS B Class rigs for deployment in Saudi Arabia.

Keppel Offshore & Marine signed agreements worth $96.3 million for the utilization of two KFELS B Class rigs to be deployed in Saudi Arabia.

The bareboat contracts price tag includes modification works to prepare them for deployment with the charterer, ADES Saudi Limited Company. The charter term starts in the fourth quarter of 2022 and will run for five years.

“We are pleased to secure bareboat charter contracts for two of our jack-up rigs, riding on improving conditions in the oil and gas market,” said Chris Ong, CEO of Keppel O&M. “These charters attest to the good demand for Keppel O&M’s proven state-of-the-art KFELS B Class rig in markets such as the Middle East where our proprietary design has established an unrivaled operational track record. With superior drilling efficiency and proven high performance, our modern KFELS B Class rigs are an economical and attractive proposition for operators and oil companies looking to ramp up exploration activities.”

According to a report by Clarksons Research published in April 2022, rig markets have continued to tighten in 2022, with overall utilization now at its highest level since 2015 and dayrates rising noticeably for jack-ups and floaters. The outlook for the jack-up market is optimistic, with demand expected to increase across 2022-23, underpinned by the strong activity of national oil companies.

“We continue to see strong demand for our rigs and are actively pursuing more charters, as well as sales opportunities. Our early success at securing new bareboat charters will not only enable us to start generating revenue and cash flows from the legacy assets but also improve the overall marketability of our rigs as we build up their operational track records,” Ong added.

Keppel O&M had on April 13, 2022, terminated newbuild rig contracts with certain customers, which will be used in turn to fulfill the latest bareboat charter contracts.

As part of the definitive agreements Keppel Corporation has signed in connection with the proposed combination of Keppel O&M and Sembcorp Marine, these two rigs and their bareboat charter agreements are part of Keppel O&M’s legacy rigs and will be transferred to Asset Co which is majority-owned by external investors on legal completion.

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