Seadrill has signed a contract with LLOG Bluewater Holdings, LLC, for employment of the newbuild drillship, West Neptune, offshore Gulf of Mexico.
The contract duration is a minimum of three years plus an option for a one-year extension at mutually agreed rates. The potential revenue for the primary contract term is approximately US$662 million. The West Neptune is expected to be delivered to Seadrill from the Samsung Heavy Industries shipyard in Geoje, South Korea, in early June 2014. The rig will be outfitted to work in up to 10,000′ of water and is capable of water depths up to 12,000′ and drilling depths up to 37,000′.
Fredrik Halvorsen, CEO and President of Seadrill Management Ltd. says in a comment, “We are delighted to have signed our first contract with LLOG, a leading independent operator in the Gulf of Mexico. This award complements our expanding deepwater operations in the area with Seadrill’s fleet growing to six ultra-deepwater units within the US and Mexican Gulf of Mexico over the next 18 months. In addition, this contract brings Seadrill’s order backlog to US$20.9 billion. We continue to experience strong demand for premium ultra-deepwater rigs and expect to further increase our backlog and earnings visibility in the next months as our additional ultra-deepwater units under construction secure term contracts.”
Scott Gutterman, President and CEO of LLOG, added: “The West Neptune will be the first dual BOP rig in the Gulf of Mexico for LLOG. LLOG will initially utilize the rig to perform completions of our Delta House wells. Having two BOP’s will allow LLOG to complete our wells efficiently saving up to 12 days per completion. Execution of this contract is another key step in accelerating the drilling and development of our extensive portfolio of exploration prospects in the Gulf of Mexico. Seadrill is an outstanding company and we are looking forward to the business relationship.”
DOF Subsea USA has entered into a long-term charter agreement with Harvey Gulf International Marine for the new build DP II Multipurpose Construction Vessel, the Harvey Deep-Sea. The four year charter agreement will commence upon delivery of the vessel from Easter Shipyard, Florida in June 2013.
The vessel is the only new build Jones Act compliant construction vessel available to the market until the latter part of 2015.
Since 2010, DOF Subsea North America has experienced strong growth in capability and market recognition, delivering to the DOF Subsea Group important and challenging projects using the existing Atlantic fleet. This charter is an integral part of DOF Subsea’s planned expansion strategy as a global service provider for the deep-water offshore Survey, IMR and Construction market.
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.
- Shell Gives Transocean a Huge Shot in the Arm with 40 Years of Drilling Contracts (gcaptain.com)
- Atwood Oceanics Orders Third Ultra-Deepwater Drillship (gcaptain.com)
- Time to Buy This Offshore Driller? (fool.com)