NOVEMBER 7, 2013 — Transocean Ltd. (NYSE: RIG) has awarded Singapore's Keppel FELS shipyard contracts for the for the construction of five Super B 400 Bigfoot Class jack-up drilling rigs. The first rig is expected to be delivered from the shipyard in the first quarter of 2016 and the remaining four jack-ups delivered at approximately four-month intervals thereafter.
Transocean says the combined capital cost for the five rigs is estimated at under $1.2 billion, excluding capitalized interest, and includes the shipyard contracts; project management; all owner-furnished equipment; capital spares and inventory; and costs associated with operational readiness. Keppel FELS values the contracts at $1.1 billion.
Each of the five contracts includes an option to order an additional jack-up of the same design and specifications on similar terms. The first option must be exercised within one year; the remaining four options must be exercised within consecutive four-month intervals thereafter.
The jack-ups will be capable of operating in water depths up to 400 feet and constructing wells up to 35,000 feet. The rigs also will have Keppel FELS' latest proprietary design and incorporate the most advanced offshore drilling technology. In addition, the rigs are configured with Transocean-developed features that improve performance and deliver wells more efficiently for customers. These include offline tubular handling capabilities, superior jacking and preload capabilities, a flexible mud system, and simultaneous operations support. The rigs are designed to accommodate 150 personnel.
"Continuing our growth in the high-specification jack-up business is an important element of our asset strategy," said Steven L. Newman, President and Chief Executive Officer of Transocean Ltd. "We are very excited about the potential for these rigs given our expectation for continued customer demand for assets of this capability and the outstanding operating performance of the four new high-specification jack-ups we have recently placed into service."
Mr. Wong Kok Seng, Managing Director (Offshore) of Keppel O&M and Managing Director of Keppel FELS said, "We are glad that Transocean has chosen to expand their fleet of premium jack-up rigs with the KFELS Super B Class design. It is a testament to our strong track record and the value-add that we offer to our customers.
"Having already delivered three jack-up rigs to them earlier this year, on time, within budget and without incidents, we have assured them that we have the expertise and experience to deliver high quality rigs to their schedule and requirements.
"In this industry, any delay can be costly. We understand the importance of delivering quality rigs safely and on schedule as it affects our customer's planning in deploying the rigs swiftly for a return on investment. This year, Keppel FELS has already delivered 17 rigs to the satisfaction of our customers and is on track to complete an unprecedented 20 or even 21 rigs by year-end."
Mr. Wong added, "Even with the stiff competition in the market, we are heartened that customers, whether new entrants or well-established ones like Transocean are choosing to build in Singapore and differentiating us for our proven rig designs, reputation for excellent project execution and having a competitive total project price.
"This year, Keppel O&M has already secured 20 newbuild projects worth about S$6.4 billion, including this latest order. All of them are based on our proprietary designs. We build winning partnerships with our customers, and our collaboration with Transocean over the years has enabled us to customise innovative products well suited to meet the market's needs."