Keppel FELS Limited (Keppel FELS) has been awarded contracts from Maersk Drilling Holdings Singapore Pte Ltd, a wholly owned subsidiary of A.P. Moller - Maersk A/S (Maersk), to build two Gusto MSC CJ70 harsh environment jackup rigs worth close to US$1 billion.
The first rig is scheduled for delivery near end-2013, with the second rig following seven months later. As part of the agreement, Maersk has the option to build an additional jackup unit with Keppel FELS.
Mr Tong Chong Heong, CEO of Keppel Offshore & Marine, said, "The Maersk-Keppel partnership, spanning decades, has achieved many significant milestones. We are pleased that our faithful customer, Maersk, has chosen Keppel to support them in the next phase of their rig expansion programme.
"These latest contracts reaffirm Maersk's confidence in Keppel's ability to deliver all types of complex offshore projects safely, on time and within budget in this win-win partnership. I am confident that the completed rigs will augment Maersk's premium fleet and position them at the forefront of harsh environment operations."
Mr Claus V. Hemmingsen, CEO of Maersk Drilling said, "We believe in continued strong demand for high capacity jack-up rigs on the Norwegian Continental Shelf, and have a strong track record since 1990 of operating in this challenging environment. Our commitment to build another two ultra harsh, high capacity rigs has been well received by our customers.
"The excellent performance and consistency, which Keppel FELS has demonstrated on the various projects we have had together, sealed our decision to entrust these important newbuilds to them."
The CJ70 rigs are especially suited for operation in the harsh environment of the North Sea at water depths up to 150 metres. The high capacity features include offline pipe handling and simultaneous operations as well as an enlarged cantilever reach, which will significantly increase the drilling efficiency compared to conventional units. The enhanced design also includes multi-machine control on the drill floor, which will allow for a degree of automation to ensure a safe operation and consistent performance. A total of 150 people can be accommodated on board in single cabins.
The above contracts are not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.