Transocean books five year, $830 million Chevron contract

DECEMBER 31, 2018 — In a year-end morale booster for the offshore drilling industry, Transocean Ltd. (NYSE: RIG) reported Friday that it had signed a rig design and construction management contract, as well as a five-year drilling contract, with Chevron USA, Inc. for one of the two dynamically positioned ultra-deepwater drillships it currently has under construction at Singapore's Jurong shipyard.

Transocean says that the drilling contract has an estimated backlog of $830 million, excluding mobilization and reimbursables.

The rig will be the first ultra-deepwater floater rated for 20,000 psi operations and is expected to commence operations in the Gulf of Mexico in the second half of 2021.

In the event of termination for convenience by the customer, Transocean will be compensated for its incremental 20,000 psi subsea investment in the rig. Additionally, a termination for convenience occurring after April 2020, would result in a substantial termination fee.

Transocean says the drillship will "feature the most advanced capabilities and state-of-the-art technology available including dual 20,000 psi blowout preventers, net hook-load capacity of three million pounds, 165-ton active heave compensating crane, and an enhanced dynamic positioning system." The rig's power plant will be configured to comply with IMO Tier III emissions standards.

"We are extremely pleased to announce that we have entered into an agreement with Chevron to construct and operate the industry's most capable ultra-deepwater drillship," said Jeremy Thigpen, President and CEO. "Transocean has a long and storied history of introducing new technologies that enable our customers to safely and efficiently access the world's most challenging reservoirs. Adding to that history, we are proud to be delivering the industry's first rig capable of drilling and completing wells requiring subsea equipment rated to 20,000 psi."

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