Offshore staff

(US) - Chevron has awarded Transocean contracts totaling $1.7 billion for a newbuild drillship and contract extensions for two rigs currently working for the operator.

The five-year contract for the new drillship is expected to begin in 2Q 2009, following an estimated 30-month shipyard construction phase and sea trials.

"The design of the new drillship, to be namedDiscoverer Clear Leader, will include the most advanced drilling capabilities in the offshore drilling industry," said George Kirkland, executive vice president, Chevron Upstream and Gas.'

"In the GoM, Chevron has drilled in the deepest water, and we have drilled the deepest well. The new drillship, coupled with our strong organizational capabilities, cutting edge technologies and partnerships, will help us maintain our leading position in deepwater E&P."

Ray Wilcox, president, Chevron North America E&P, added, "We already have proved our ability to create the technology and processes needed to be successful in deepwater."

"Now, with these contracts, we expect to secure the deepwater rigs we need to go forward with Chevron's extensive GoM portfolio of exploration prospects and projects under development. These contracts also demonstrate the benefits of building a strong business relationship with core contractors who consistently demonstrate top safety and operational performance."

Construction of the dynamically positioned, double-hull drillship is scheduled to take place at Daewoo Shipbuilding and Marine Engineering Yard Co., Ltd., in Okpo, South Korea, with an estimated total capital expenditure of approximately $650 million.

The drillship will feature a patented dual-activity drilling technology process that uses two drilling systems in a single derrick, allowing for parallel drilling operations designed to save time and money in deepwater well construction, compared with conventional rigs.

In addition, the top drive, or hoisting structure, will be larger, stronger and more efficient than existing top drives, so wells can be drilled deeper. There also will be an expanded high-pressure mud-pump system, expanded completions capabilities, and other unique features of the drillship that target drilling wells down to 40,000 ft total depth.

The drillship will have a variable deckload of more than 20,000 metric tons, and will be capable of drilling in water depths of up to 12,000 ft. It will be an enhanced version of Transocean's three predecessor Enterprise-Class drillships, which have set deepwater drilling records in recent years, including the world water depth drilling record of 10,011 ft.

Furthermore, Chevron has exercised a final one-year option on Transocean's deepwater drillshipDiscoverer Deep Seas, which is expected to begin around January 2008, and awarded a two-year contract extension for the rig with an expected start date in January 2009. The operator has also extended its contract for Transocean's semisubmersible Cajun Express for an additional 30 months beginning around July 2007.

03/02/06