Hyundai Heavy books drillship orders from Noble

UPDATED: Hyundai Heavy Industries, the world’s largest shipbuilder, reports that it has booked a $1.03 billion order to build two new deepwater drillships for Noble Drilling Holding, LLC. The agreement also includes an option that Noble Drilling can exercise to order two additional drillships.

The vessels, measuring 229 meters in length and 36 meters in width with a maximum drilling depth of 3.6 km, are scheduled to be delivered by September 2013.

Along with the drillship Hyundai Heavy received on early January from Diamond Offshore Drilling Inc., the company has won all the three deepwater drillships ordered in the global shipbuilding market so far this year.

Hyundai Heavy delivered its first drillship, Deepwater Champion, to Transocean of USA in November 2010.

Noble Corporation (NYSE:NE) announced this week that a subsidiary had signed a Letter of Intent (“LOI”) with a subsidiary of Royal Dutch Shell plc for a new five and one-half year drilling contract on a newbuild ultra-deepwater drillship that is expected to commence in the second half of 2013. Capabilities included 10,000 foot water depth capability, 200 man quarters and DP-3 station keeping.

In a press release issued today, Noble Corporation said:

Noble Corporation (NYSE:NE) today announced that a subsidiary has signed a contract with Hyundai Heavy Industries Co. Ltd. (“HHI”) for the construction of two ultra-deepwater drillships, increasing the company’s number of floating drilling units to 26, 14 of which are dynamically positioned. The new ultra-deepwater drillships, to be named at a later date, will be constructed on a fixed price basis at HHI’s shipyard in Ulsan, Korea, with expected deliveries from the shipyard in the second and fourth quarters of 2013, respectively. Operations are expected to commence 90-120 days after delivery following mobilization and acceptance testing.

The delivered cost of the new drillships is expected to be $605 million each, and includes the turnkey construction contract, Company furnished equipment, project management and spares, but excludes capitalized interest. The construction contract contains favorable payment terms that incentivize on-time delivery. The contract further includes a fixed price option for up to two additional drillships, which must be declared by early May 2011 for delivery in 2014.

“We believe the fundamentals of the global ultra-deepwater market will continue to be strong in the decade ahead,” said David W. Williams, Chairman, President and Chief Executive Officer, Noble Corporation. “These units, capable of meeting the industry’s most stringent operating requirements, further support our continued commitment to increasing the technological and operational capabilities of our fleet. Furthermore, the previously announced Letter of Intent from Shell for one unit reduces the speculative risk and enhances future shareholder value.”

The rigs are based on a Hyundai Gusto P10000 hull design and are designed for operations in waters of up to 12,000 feet, although either may be outfitted for less depending on specific contract requirements. The units will have DP-3 station keeping abilities, the ability to handle two complete BOP systems, a heave compensated construction crane to facilitate deployment of subsea production equipment and accommodations for up to 200 personnel, in addition to a number of other operational enhancements beyond the shipyard’s base specifications.

January 19, 2011