Following sea trials during the past few weeks, Dockwise, a Dutch heavy lift and transportation specialist, now confirms the delivery of Dockwise Vanguard. The vessel has left the yard of Hyundai Heavy Industries (“HHI”) this morning and started its maiden trip.
Dockwise Vanguard will sail to the Samsung Heavy Industries (“SHI”) yard in Korea to pick up the giant hull of the Jack / St Malo semi-submersible floating production facility for transportation to the US Gulf of Mexico.
“We are pleased to see Dockwise Vanguard leave the yard following a delivery without a single LTI (Lost Time Incident), on schedule for its maiden trip for one of our key customers. As said before, we are confident that that the Vanguard will rapidly earn its place in the market and has the potential to create a new market of its own”, comments André Goedée, Dockwise’s CEO..
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Shipyard delivery for the first drillship is scheduled for mid-2015. The remaining three drillships are expected to be delivered from the shipyard at approximately six-month intervals thereafter. After customer acceptance, the contracts are expected to commence in 2015 and 2016, contributing an estimated revenue backlog of $7.6 billion, excluding mobilization. The aggregate capital investment for the four newbuild rigs is an estimated $3.0 billion, excluding capitalized interest.
All four drillships have advanced capabilities: each is designed to operate in water depths of up to 12,000 feet and drill wells to 40,000 feet. Featuring state-of-the-art equipment, including Transocean’s patented dual-activity drilling technology, the newbuild drillships will possess industry-leading hoisting capacity. The drillships will also have a variable deckload capacity of 23,000 metric tons and feature enhanced well completion capabilities. In addition, each newbuild rig will be outfitted with two 15,000 psi blowout preventers (BOPs), which are expected to reduce customer non-productive time between wells. The four newbuild drillships will be able to accommodate a future upgrade to a 20,000 psi BOP, when it becomes available. The rigs will also feature diesel engines configured to comply with anticipated Tier III International Maritime Organization (IMO) emissions standards.
“These contracts add 40 years of rig work to our revenue backlog, expand and upgrade our ultra-deepwater fleet, improve our fleet mix and provide an opportunity to expand our relationship with an important customer with which we have 40 years of experience in advancing the state of the art in offshore drilling technology,” said Steven L. Newman, President and Chief Executive Officer of Transocean Ltd. “We look forward to providing Shell with incremental value through the addition of these seventh-generation, ultra-deepwater drillships.”
Peter Sharpe, Shell’s Executive Vice President, Wells, said, “Shell continues to develop its deepwater operations and modernize its contracted rig fleet at fair market rates. These state-of-the-art deepwater rigs, on which we are collaborating with Transocean to design, will comply with the highest industry standards for safety, operations and environmental protection for drilling deepwater wells.”
The newbuild rigs will be constructed at the Daewoo Shipbuilding and Marine Engineering Co., Ltd. facility at Okpo, South Korea, where Transocean’s five Enhanced Enterprise-Class rigs were built and where the company currently has two other ultra-deepwater drillships under construction. Construction on the first drillship is expected to commence during the fourth quarter of 2013.
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Rowan Companies plc (“Rowan” or the “Company”) announced that it has exercised its option to build a fourth GustoMSC P10,000 design ultra-deepwater drillship with Hyundai Heavy Industries Co., Ltd. (“HHI”) with delivery scheduled in March 2015.
The cost for this rig, including commissioning, project management and spares, but excluding capitalized interest, is estimated to be approximately $620 million. This cost compares to peer companies’ previously announced 12,000 foot capable rigs equipped with 10,000 feet of riser. Rowan plans to equip its drillships with 2,000 feet of additional riser to enable operations in water depths up to 12,000 feet upon delivery. Each drillship will also be equipped with a second BOP for minimizing non-productive time. The Company will also incur operational training and personnel ramp-up costs in readying the drillships to commence well operations. Expected costs for the additional riser, BOP and training and ramp-up costs will be approximately $75 million. Total cost for the Company’s fourth drillship will be approximately six percent higher than the Company’s first three drillships primarily due to equipment price increases and projected labor cost increases. The agreement with HHI also includes an option for a similar fifth drillship exercisable in the fourth quarter of 2012, for delivery in the third quarter of 2015.
Matt Ralls, President and Chief Executive Officer, commented, “We are very pleased to add a fourth ultra-deepwater drillship to our fleet. The recent three-year contract obtained for our first drillship, the Rowan Renaissance, and strong customer enthusiasm for Rowan’s history of operational excellence, high-specification drillship design and experienced deepwater team, reaffirms our confidence in our expansion into the ultra-deepwater market.”
The Rowan Renaissance struck steel in July 2012 and is expected to be delivered in late 2013. The second and third drillships are expected to be delivered in the second and fourth quarters of 2014, respectively.
Seadrill has received a commitment from a major oil company for new contracts on newbuild drillships West Auriga, West Vela and a third drilling unit currently in operation, which will be named later. The combined 3 rig package involves 19 rig years and a potential contract value of US$4 billion, including mobilization fees for the newbuild units.
West Auriga and West Vela are currently under construction at Samsung Shipyard in Korea. The newbuild units will commence transits to the Gulf of Mexico upon delivery from the yard, scheduled for late February and May 2013. Start-up of operations are scheduled for September and December 2013. The West Auriga and West Vela are the fourth and fifth drillships delivered to Seadrill by Samsung in the last 4 years. Each rig will be equipped with 1250 ton load capacity, an active heave compensated subsea construction crane and two 7 ram blow out preventers.
Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS, says, “The breadth and depth of this commitment from a major oil company is the result of our track record of delivering rigs on time, operating with a competent workforce and having the availability of a modern fleet. We are excited about the opportunity to further grow our fleet and operations in the US Gulf of Mexico, which we consider as one of the most cost effective drilling regions. In addition, the term of the contracts fits well with Seadrill financing plans including the potential use of MLP financing.”
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Vantage Drilling Company has signed a definitive agreement to acquire the rights and obligations under the construction contract for the ultra-deepwater drillship known as Dragonquest from Valencia Drilling Corporation, a Marshall Islands corporation for a purchase price of approximately $164 million.
Upon closing of this transaction the Company will be responsible for funding the remaining construction-related payments for the Dragonquest. In addition, Vantage has agreed to pay up to $5 million of Valencia’s costs and expenses at closing. The closing of the acquisition is subject to specified closing conditions.
The Dragonquest was constructed at Daewoo Shipbuilding & Marine Engineering Co., Ltd. (“DSME”) in Okpo, Korea. Construction has been completed on the vessel, and upon delivery of the Dragonquest and the closing of the transaction, Vantage will be required to make expenditures for the final construction payment, project costs, equipment, and spares, and the total delivered, in-service cost of the project, including the purchase price under the agreement with Valencia, totaling approximately $800 million. The closing of the transaction and the delivery of the Dragonquest are currently expected to take place in April 2012.
Paul A. Bragg, the Company’s Chairman and CEO, commented, “We are excited to acquire the Dragonquest as we continue to build one of the most modern and technologically advanced offshore drilling fleets in the world, and expect to complete the acquisition and take delivery of the rig in the coming weeks.
“We have managed the project since its inception in 2008, so we have the highest confidence in the quality and capabilities of the asset we are buying.”
Upon delivery, the Dragonquest is expected to be deployed in the U.S. Gulf of Mexico, pursuant to an eight-year contract with Petrobras. Bragg continued, “Beginning in the third quarter of 2012, we expect the Dragonquest to generate $140 to $150 million of EBITDA per year or approximately $1.2 billion over the life of this contract.”
The Dragonquest is equipped for drilling in water depths of up to 10,000 feet, with a total vertical drilling depth capacity of up to 40,000 feet. The Dragonquest’s hull design has a variable deck load of approximately 20,000 tons and measures 781 feet long by 137 feet wide.
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