Valaris and Aramco Order Newbuild Jackups

Valaris and Aramco Order Newbuild Jackups
A Valaris-Saudi Aramco joint venture has ordered two newbuild jackup rigs from International Maritime Industries.

ARO Drilling, a 50/50 joint venture of Valaris plc and Saudi Aramco, has ordered two newbuild jackup rigs from International Maritime Industries (IMI), Valaris reported Tuesday.

IMI is a joint venture maritime yard comprising Saudi Aramco, Lamprell plc, the National Shipping Company of Saudi Arabia (Bahri) and Hyundai Heavy Industries Co. Ltd., according to a Dec. 2017 Saudi Aramco press release.

“Upon delivery, each rig is expected to commence an eight-year contract with Saudi Aramco and operate at a day rate determined by a six-year EBITDA payback,” Valaris noted Tuesday in a written statement.

After the initial eight-year contract and pending certain conditions, each rig will garner another eight-year contract, Valaris added. Under the subsequent terms, the daily operating rate for each jackup will be repriced every three years and thereafter the rigs will be preferred for new Saudi Aramco contracts, the drilling contractor also noted.

According to Valaris, each newbuild will cost approximately $175 million and fully comply with the latest Saudi Aramco specifications. ARO will pay 25 percent of the cost as an initial down payment from cash on hand and the remaining 75 percent upon delivery.

Valaris stated the first and second newbuild rigs should be delivered in the first quarter of 2022 and second quarter of 2022, respectively.

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