Keppel Secures $534M in Rig Contracts
Keppel FELS has secured two rig contracts amounting to US$534 million (approximately S$820 million).
The contracts are for the construction of a drilling and production jackup rig and a deepwater drilling tender rig. Both rigs will be built to Keppel's proprietary design.
The first contract, worth US $400 million, is for the third KFELS N Class jackup rig for Skeie Drilling and Production, a member of the Skeie Group.
The contract is subject to certain conditions being met by July 9, 2007.
The new rig is expected to be delivered in the fourth quarter of 2010.
Said Mr. Choo Chiau Beng, Chairman & CEO of Keppel Offshore & Marine (Keppel O&M), parent company of Keppel FELS, "Having three KFELS N Class orders in less than half a year is strong endorsement for this innovative design. It reinforces our confidence that the rig has what it takes to meet market requirements for highly robust rigs in the North Sea type of conditions."
Developed by Keppel O&M's R&D arm, Offshore Technology Development, the KFELS N Class jackup rig will provide customers the flexibility of having a unit that can undertake drilling and production activities concurrently. Capable of operating in water depths of up to 430 feet and drilling depths of down to 35,000 feet, the rig will have features to readily accept process modules for production activities. The design is in full compliance with the demanding and technically challenging requirements of rigs operating in the Norwegian sector of the North Sea.
The second contract is from repeat customer Seadrill Asia Limited (Seadrill Asia) for a semisubmersible drilling tender (SSDT) at US $134 million.
Slated for delivery at end 2009, the drilling tender will be built to Keppel FELS's proprietary design, the KFELS SSDT™ 3600E.
Mr. Choo added, "We are glad to continue our support of Seadrill in meeting their drilling requirements by delivering quality products on time and within budget. It is our aim to be the service provider of choice for our customers through innovation, engineering and excellent execution of projects."
This new tender rig will be an enhancement of the last two KFELS SSDT 3600 design rigs, West Setia and West Berani, which Keppel FELS built for Seadrill Asia. The enhanced version includes modifications such as increased crane load capacity to 250 tonnes, four mud pumps and accommodation and services for 160 personnel.
The Keppel O&M group has built a total of five tender drilling rigs for Seadrill Asia, formerly Smedvig, since 1994. All the five rigs are gainfully deployed across the world. The first rig, West Pelaut, was voted "Shell Platform Rig of the year" in 2006 for consistent long-term performance. The last rig, West Berani, was successfully put into operation in Kuantan, East Malaysia, immediately after its delivery in December 2006.
Seadrill Asia's parent company, Seadrill Limited, has also ordered four jackup rigs with Keppel FELS, of which three are currently under construction. The first of the four, West Ceres (ex Seadrill 3), was delivered on time and within budget in 2006.
The KFELS SSDT series is developed by Keppel O&M's R&D arm, Deepwater Technology Group. A conventional drilling tender can only be deployed next to fixed platforms, but the KFELS SSDT series, with their enhanced capabilities, can operate in deepwaters up to 5,000ft alongside Spars and Tension Leg Platforms.
Keppel FELS is a wholly owned subsidiary of Keppel Corporation Limited, through Keppel O&M, a leader in offshore rigs, ship repair and conversion and specialized shipbuilding. Keppel O&M's near market, near customer strategy is bolstered by a global network of 20 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, the group aims to be the provider of choice and partner in solutions for the offshore and marine industry.
The contracts are not expected to have any material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the financial year ending December 31, 2007.
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