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Home Ocean Rig says demand for rigs is increasing and announces new deals.

Ocean Rig says demand for rigs is increasing and announces new deals.

23 July 2018 to 23: 57
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Ocean Rig announces new business
Ocean Rig announces new business

Ocean Rig announces new deals in light of increased demand. Namibia will be the new offshore challenge after signing a drilling contract.

Ocean Rig announces new business in the face of market demand in the offshore floating platforms sector is improving, the company's CEO said on Monday, revealing new contracts for its fleet. The Ocean rig announced on Monday that it has signed a new drilling contract with Chariot Oil & Gas for a one-well drilling program to drill offshore Namibia using the Ocean Rig Poseidon drillship.

The contract

The contract is expected to begin in direct continuation of the previously announced program with Tullow in the third quarter of 2018. In addition, Ocean Rig reported that it has entered into a Letter of Intent (“LOI”) with a major European oil company for a two-year program. firm wells plus two optional wells for offshore drilling in West Africa.

The contract is expected to commence in the direct continuation of the program with Chariot Oil & Gas Limited in the fourth quarter of 2018 and will also be performed by Ocean Rig Poseidon. Ocean Rig, which said nothing on dayrates, said the contract was subject to negotiation and execution of final documentation and other approvals. In addition, Swedish operator Lundin Petroleum, through its subsidiary Lundin Norway, declared its seventh option to extend the existing contract for the semi-submersible rig Leiv Eiriksson.

The Leiv Eiriksson is expected to have firm employment secured by December 2018. If Lundin exercises the remaining five options for a well, the rig could be employed by the third quarter of 2019. rig, the rig previously had a daily fee of around $150000. Last but not least, Ocean Rig said previously announced discussions with Total E&P Angola Block 32 for the Ocean Rig Skyros drilling contract have already been completed.

The result

The result is an amendment to the existing drilling contract that includes a provision that the day rate will remain fixed for the remainder of the contract at approximately $573.000/day. The deal with Total is the most important as it keeps the rig working at a substantial day for longer. Although Ocean Rig this time did not speak about the duration of the contract with Ocean Rig Skyros, the information found on its website shows that the rig should work for Total until mid-2021.

strategic relationship

Pankaj Khanna, President and CEO of the Company, commented: “We are pleased with the progress of the floating market and look forward to further developments in the coming months that could increase the utilization of the company's drilling rigs in 2019. The conclusion of the Skyros discussions eliminate any uncertainties regarding the company's estimated order backlog and solidify our strategic relationship with Total. "Currently, we see higher levels of research in the market which we expect will translate into increased utilization in the coming months for the global float fleet."

While demand may be increasing, levels are still far from strong. This was recently shown by Ocean Rig, which in June decided to postpone the delivery of an 8th generation drillship. The drilling company has agreed with Samsung Heavy Industry to delay delivery of Ocean Rig Crete from Q2019 2020 to September XNUMX, with an option to bring forward the date at Ocean Rig's option.

According to Bassoe Analytics, Ocean Rig has only two drilling rigs – Leiv Eiriksson and Ocean Rig Skyros. In addition to these rigs, Ocean Rig has 11 more rigs, of which two are under construction, six cold stacked and three hot stacked (including Poseidon). As stated above, Poseidon is about to start drilling at Tullow, after which it will drill at Chariot in Namibia.

Read also Petrobras says 4 more platforms will be working by October

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