Seadrill subsidiary places $568 million semi order at Jurong

Sembcorp Marine’s subsidiary Jurong Shipyard has secured a US$568 million contract to build a harsh-environment ultra-deepwater semi-submersible rig from North Atlantic Drilling Limited, a 74 percent owned subsidiary of Seadrill Limited.

According to Seadrill, total estimated project costs for the new rig, including a turnkey contract with the shipyard, project management, drilling and handling tools, spares, capitalized interest and operations preparations, is estimated to be approximately US$650 million, with 20 percent of the yard price payable at contract signing, and the remaining 80 percent at delivery. The first installment has been financed by proceeds from a private placement which was completed on March 27, 2012.

The new rig will be constructed based on the Moss Maritime CS60 design – an enhancement of the Moss Maritime CS50E MKII harsh-environment ultra-deepwater semi-submersible rigs West Pegasus (pictured at left) and West Leo which were delivered by Jurong Shipyard to Seadrill in March 2011 and January 2012 respectively.

Delivery is scheduled no later than the first quarter of 2015.

This new ultra-deepwater harsh-environment semi-submersible rig will be built for a water depth rating of 10,000 feet with a maximum drilling depth of 40,000 feet. It will be an N-Class compliant sixth generation rig capable of maintaining position dynamically in deepwater and with thruster assisted mooring in shallow water in the North Sea and the Barents Sea. The rig is also engineered and winterized to carry out year-round drilling operations in such areas.

The rig will have accommodation capacity for up to 150 people in Norway, whereas internationally the capacity will be 180. In order to meet the highest safety and operational standards, the rig will be outfitted with a six ram blow out preventer (BOP) stack and have the capacity for storing and handling of a second BOP.

Mr. Don Lee, Jurong Shipyard’s Senior General Manager of Offshore Division, said: “We are very pleased to partner with North Atlantic Drilling in their drive to be the leading harsh-environment drilling company with high-quality premium drilling rigs. This Moss Maritime harsh-environment ultra-deepwater CS60 rig is an enhancement of the two Moss Maritime CS50E rigs that Jurong Shipyard recently delivered to Seadrill. In addition, we have successfully delivered to Seadrill four units of turnkey ExD Friede & Goldman Millennium Class ultra-deepwater semi-submersible rigs and a Gusto MSC CJ70 harsh-environment jack-up rig.”

“With offshore drilling moving towards deeper waters and harsher environments, we are confident of leveraging on these emerging opportunities with our proven track record in the building of high-specification ultra-deepwater rigs. We are fully committed to the timely delivery of this Moss Maritime CS60 harsh-environment semi-submersible entrusted to us while meeting stringent quality, safety, health and environmental standards. We will continue to build on this strong partnership to achieve win-win synergy going forward.”

Mr Alf C. Thorkildsen, Chief Executive Officer in North Atlantic Management AS and Chairman of the Board of North Atlantic Drilling Ltd, said: “We are pleased to have entered into this arrangement with our proven and trusted partner Jurong Shipyard to grow our fleet of harsh-environment rigs. The combination of historical high oil prices and significant exploration successes for our customers in mature as well as frontier areas has increased the demand for quality high specification rigs. This environment has created a dynamic investment opportunity for our company to grow its activities and create further value for its shareholders.”
The contract is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of Sembcorp Marine for the year ending December 31, 2012.

North Atlantic Drilling is an offshore harsh environment drilling company in which Seadrill currently holds a 74 percent ownership interest. The company has following this latest harsh environment semi-submersible newbuild order, a fleet of six harsh environment units in operation and two newbuilds under construction. North Atlantic Drilling is currently listed on the N-OTC list in Norway, but has initiated the process of listing its shares in the U.S. with a targeted commencement of trading during third quarter 2012.

April 2, 2012