Seadrill Finalizes PEMEX Contracts, Unveils Joint Venture
Seadrill Limited has finalized drilling contracts with Mexico state energy company Petroleos Mexicanos (PEMEX) and established a joint venture to own and manage jackups in Mexico.
The company finalized contracts for the jackups West Oberon (400’ ILC), West Intrepid (350’ ILC), West Defender (350’ ILC), and West Courageous (350’ ILC). Seadrill expects the fifth contract for the newly acquired Prospector 3, now called West Titania, to be finalized in the second quarter of this year. Last November, Seadrill acquired the business that owns the yard construction contract for the high-specification jackup Prospector 3.
The six-year contracts could generate revenue of more than $1.8 billion, Seadrill said in a statement.
Hamilton, Bermuda-based Seadrill initially announced the heads of agreement with PEMEX for the rigs in its Nov. 25, 2013 third quarter earnings report.
The company also is establishing a 50/50 joint venture, SeaMex Ltd., to own and manage jackups working for PEMEX and develop other opportunities in Mexico and elsewhere in Latin America. Seadrill’s partner in the venture is an investment fund controlled by Fintech Advisory Inc., which Seadrill said has a strong investment and operational record in Latin America.
As part of the agreement, Seadrill will 50 percent interest in the five rigs to its partners for an estimated $488 million in proceeds.
The contracts’ long-term nature and SeaMex’s establishment will create economies of scale in the region, Seadrill CEO Per Wulff said in a Feb. 18 press release.
“Seadrill sees recent development in Mexico such as new petroleum legislation, PEMEX’s expansion plans and recent large deepwater discoveries as supportive to the great opportunity to expand business within the country,” Wulff commented.
By employing the joint venture to build up a strong local independent organization with close proximity to its customers, strong focus on education, and a high degree of local content, Wulff expects the company to be able to create an efficient, high quality and more cost effective organization.
The Seadrill rig West Pegasus (UDW semisub) is also under contract with PEMEX.
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