Seadrill to buy four newbuild jack up rigs

Uchenna Izundu
International Editor

LONDON, June 6 -- Seadrill has ordered four newbuild jack up rigs from KFELS and PPL Shipyard in Singapore under contracts totaling $850 million. Seadrill's fleet will increase to 12 units, up from 8, when the rigs are delivered 2010.

According to the $420 million contract with KFELS, two of the rigs will have the capability to operate in 400 ft of water and reach drilling depths of 30,000 ft. They will be built at KFELS and will be based on the KFELS Mod V 'B' design. These will be ready for delivery in June and November 2010. They will be the fifth and sixth jack up orders that Seadrill has placed with KFELS.

The rigs to be built by PPL Shipyard will be able to operate in 375 ft of water and drill to 30,000 ft. They will be modelled on the Baker Marine Pacific Class 375 Deep Drilling design. Deliveries are scheduled in March and November 2010. The contract price is $430 million. Seadrill said these were the second and third jack up orders it has placed with PPL Shipyard.

The company also has struck option agreements for additional jack up newbuilds in 2011.

Alf C Thorkildsen, chief executive of Seadrill Management AS, said the offshore rig market would remain tight in the years to come. "The decision to initiate the $850 million building program was taken based on expected high return on invested equity due to the following factors: the current jack up order book is less than 20% of the existing aging fleet (which has an average age of 23 years), the newbuild jack up capacity before 2011 at first class yards is limited, and the number of term contract for jack ups is increasing."

Contact Uchenna Izundu at uchennai@pennwell.com.

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