Singapore’s Keppel O&M has secured bareboat charters for two more of the jack-ups left on its hands due the termination of newbuild charters during the downturn im the oil and gas sector. The two latest charters are for KFELS B Class rigs to be deployed in the Middle East.
They will be chartered to an established drilling company in the region for deployment in fourth 2022 for a period of three years, with options for a year’s extension. Total revenue from the charters, including the options and modification works by Keppel O&M to prepare the rigs for on-site operations, is expected to be up to SGD 120 million (about US$88 million).
These contracts come on the back of two bareboat charters by Keppel O&M announced on May 9. 2022, reflecting the growing demand for high-quality jack-up rigs in improving oil and gas market.
Chris Ong, CEO of Keppel O&M, said, “We have built a strong track record and trust in the industry for delivering rigs that are robust, versatile and capable of working in a wide variety of geographies. The multiple charter contracts that we have recently secured reflect the improving market sentiments, and attest to the value we are able to provide to rig operators with our proven KFELS B Class rigs.
“With jack-up utilization rates increasing, we are also seeing demand for rig charters and sales enquiries improve. Putting the legacy rigs to work will improve the overall marketability of these assets while reducing holding costs. As we secure more bareboat charter contracts, our legacy rigs will become increasingly valuable to both rig operators as well as potential investors.”
As part of the definitive agreements Keppel Corporation has signed in connection with the proposed combination of Keppel O&M and Sembcorp Marine, these two rigs and their bareboat charter agreements are part of Keppel O&M’s legacy rigs and will be transferred to an asset company that is majority-owned by external investors on legal completion of the merger.