Maersk Drilling orders harsh environment jack-up at DSME

maersk InnovatorSEPTEMBER 25, 2013 — Maersk Drilling has ordered a new ultra harsh environment jack-up rig, XL Enhanced 4, to be built at the Daewoo Shipbuilding and Marine Engineering (DSME) shipyard in South Korea.

Mærsk Innovator

The rig is scheduled for delivery in mid-2016. It is of the same class as the three ultra harsh jack-up rigs currently under construction for Maersk at Keppel FELS in Singapore. All four XL Enhanced ultra harsh environment jack-up rigs are based on the design of the Mærsk Innovator and the Mærsk Inspirer, which were built at Hyundai Heavy Industries in Korea and which Mærsk says are the world's largest and most advanced jack-up drilling rigs.

The rig order at Daewoo is backed by a 5-year contract with BP Norway for plug and abandonment work on the Valhall field in the Norwegian North Sea. The estimated value of the contract with BP Norway for the firm 5-year period is $812 million including mobilization of the rig from South Korea to Norway, but excluding cost escalation. BP Norway has options to extend the contract up to a total duration of 10 years. The rig will have the capability to be electrically powered from shore via the Valhall complex, which has significant environmental benefits.

The total project cost for the rig is $650 million including a turnkey contract with the yard, owner furnished equipment, project management and capitalized interest. The contract with DSME includes priced options for delivery of up to two additional units with delivery in 2016 and 2017.

"We are very pleased with the contract award from BP Norway extending the strong global relationship we have with BP," says Claus V. Hemmingsen, CEO of Maersk Drilling and member of the Executive Board of the A.P. Moller - Maersk Group. "With this latest contract we now have four rigs contracted to BP, two in Norway, one in Egypt and one in Azerbaijan in the Caspian Sea. Furthermore, this is our first rig order placed with DSME - a top quality yard having solid experience with construction of offshore rigs, and we look forward to take delivery of the rig in 2016

Maersk Drilling says the order is in line with its strategy of growing its business within the ultra harsh environment market segment and will contribute to the achievement of Maersk Drilling's financial target of delivering a profit of $1 billion by 2018.

"Norway is a strategic focus area for Maersk Drilling, and this latest contract further solidifies our market leading position in the Norwegian jack-up market. Opportunities continue to emerge in the Norwegian market and we will continue to evaluate opportunities for further growth in this market," says Mr. Hemmingsen.

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