COSL to upgrade rigs for deeper water drilling

China Oilfield Services Ltd. plans a $10 million overhaul of one of its drilling rigs to extend its operating water depth and capture growth opportunities for deepwater oil drilling.

Eric Watkins
Senior Correspondent

LOS ANGELES, Apr. 2 -- China Oilfield Services Ltd. plans a $10 million overhaul of one of its drilling rigs to extend its operating water depth and capture growth opportunities for deepwater oil drilling.

COSL is in talks with parent China National Offshore Oil Corp. to find a window from the latter's drilling schedule to carry out the upgrade. A 50:50 joint venture of COSL and Norway's Atlantic Deepwater Technology will test the upgrades.

COSL Chief Executive Yuan Guangyu said strong demand is making the drilling schedule for rigs very tight. Yuan added that the overhaul would see the operating water depth of one of COSL's three semisubmersible rigs increase to 1,500 m from less than 500 m.

COSL's semisubmersible rigs, which are capable of operating in 300-500 m of water, had an average rental rate of $118,483/day in 2006, up 107.5% over 2005. According to COSL figures, the day rate of semisubmersible rigs capable of working in 1,500 m of water could rise to $500,000/day.

Contact Eric Watkins at hippalus@yahoo.com.

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