VESSELS, RIGS, UPGRADES

Oct. 1, 2006
Chevron has awarded Transocean a second contract for construction of an Enterprise-class drillship.

Rig construction

Chevron has awarded Transocean a second contract for construction of an Enterprise-class drillship. This follows Chevron’s five-year contract with Transocean for construction of theDiscoverer Clear Leader announced in March, and will be the third such contract for Transocean this year.

The rig will come equipped with the company’s patented dual-activity drilling technology along with a new top drive system, an expanded high-pressure mud-pump system, and enhanced completions capabilities, enabling it to drill to 40,000 ft TD. It will have a variable deckload of more than 20,000 metric tons with the capability of drilling in water depths up to 12,000 ft.

The contract can be converted to a three-year duration before September 2007. If it runs the full five years, the value will be around $862 million. The contract is scheduled to begin in 1Q10 following construction, commissioning, and mobilization to the US Gulf of Mexico.

Construction of the DP, double-hull drillship will be by the Daewoo Shipbuilding and Marine Engineering Co., Ltd. yard in Okpo, South Korea, where the two previously announced drillships will be constructed. The estimated total capital expenditure for the unit is approximately $670 million, excluding capitalized interest.

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Seadrill has signed a letter of intent on a four-year contract to use the semiWest Sirius in the Gulf of Mexico. The operator has an option to extend the contract for one or two years. The estimated contract value is $690 to $980 million. The rig is under construction at Jurong Shipyard in Singapore, with delivery scheduled in 2Q08.

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A contract has been signed by OffRig with Yantai Raffles Shipyard in China to build the semisubmersible drilling rig,OffRig Innovator. National Oilwell Varco will deliver the drilling package. Delivery is set for 4Q08. This is the second newbuild contract OffRig has signed with Yantai. It has options on two more rigs.

New construction vessels

Helix’s board of directors recently approved the construction of a $160 million DP multi-service, dive support/well intervention vessel for work in the North Sea and West of Shetlands. The vessel will come equipped with a coiled tubing intervention unit. It is expected to join Helix’s active fleet in 2008. “We believe that with two multi-service vessels capable of performing LWI services and ourQ4000 semisubmersible that uses our purpose-built 7 3/8-in., 10,000 psig intervention riser system (IRS), we are well positioned to perform intervention services for the rapidly growing global subsea well market,” says Owen Kratz, Helix chairman and CEO.

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DOFCON has selected Aker Yards to build and deliver two new construction vessels. Both vessels will be delivered from Aker Yards’ site at Søviknes in Norway.

The first vessel is an Aker OSCV 06 L-design, scheduled for delivery in the spring of 2009. The DP-3 vessel will measure 153 m in length. It will be capable of a maximum speed of 18.5 knots, which is of significant importance for global operations in order to minimize mobilization time, according to Aker Yards.

The second vessel is scheduled for delivery one year earlier. It will measure 118 m in length, and will come equipped with a 250-metric ton crane and DP-3 capacity. Both vessels are being designed by Aker Yards.

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Solstad Offshore ASA (SOFF) has issued a letter of intent to Flekkefjord Slipp og Maskinfabrikk AS for supply of a new construction vessel. The newbuild, measuring 113 m by 24 m, will be purpose built for inspection, maintenance, and repair work.

In July, SOFF and Subsea 7 entered into an agreement for use of the vessel for a fixed period of four years with four, 1-year options. The vessel is being designed by SOFF, Subsea 7, and Vik-Sandvik AS.

Rig migration

Rowan continues to widen the supply deficit of jackups in the Gulf of Mexico with the relocation of two more rigs to the Middle East, against term contracts with Saudi Aramco at a day rate of around $190,000.

The two Tarzan-class jackups,Hank Boswell and Scooter Yeargain, will begin transit from the Gulf in January 2007. Both rigs are contracted for four-year drilling programs off Saudi Arabia, beginning late in 1Q07. Rowan estimates that revenues from the contracts will exceed $550 million.

“These contracts reaffirm our strategic plan to build high-specification jackups capable of ultra-deep drilling, while geographically diversifying our fleet, says Danny McNease, Rowan chairman & CEO.” “After moving these rigs to Saudi Arabia we will have 60% of our offshore fleet operating outside the US GoM.”

Asset sales

Two Halliburton subsidiaries, Halliburton West Africa Ltd. and Halliburton Energy Services Nigeria Ltd., have agreed to sell non-core assets to Hercules Offshore Inc.

The sale will include eight lift boats and will give Hercules the right to operate five additional lift boats under an agreement with the third-party vessel owner. The initial purchase price is approximately $50 million, with potential additional proceeds to Halliburton from an earn-out arrangement.

“This announcement is in line with Halliburton’s decision several years ago to exit the lift boat business,” says Cris Gaut, Halliburton’s CFO.

The 13 vessels have an average age of around 20 years, and have had substantial retrofitting over the years. All are based in Nigeria.

The transaction is expected to close in the fourth quarter and will result in a pre-tax gain for Halliburton of at least $40 million.

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KCA DEUTAG, Wayzata Investment Partners LLC, and Marlin Offshore Marshall Island have formed a joint venture entity, Marlin Offshore International Ltd. (MOIL), which has purchased from Transocean four tender assist drilling rigs:W.D. Kent, Charley Graves, Searex IX, and Searex X.

The purchase of theW.D. Kent has been completed, while acquisition of the remaining three are subject to closing conditions.

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An FDPSO hull construction contract worth $120 million was awarded to COSCO Shipyard Group by MPF Corp. Ltd. The vessel will be equipped with drilling, production, and storage facilities designed for ultra deepwater operations. The unit will be built at the Cosco Dalian Shipyard. The project is expected to take approximately 16 months, with delivery scheduled for early 2008. According to the company, this contract falls under its EPC arrangement with Dragados Offshore SA of Spain. MPF has an option for one additional unit.