Offshore drilling contractor Frigstad Offshore has decided to exit from an investment in Frigstad Deepwater’s newbuilds to position itself for the industry recovery, the company said on Tuesday.
Frigstad Deepwater Holding Ltd, a subsidiary of Frigstad Offshore Group, has decided to sell all of its shares in Frigstad Deepwater Ltd to a subsidiary of China International Maritime Containers Group (CIMC) with effect from December 6, 2016.
Frigstad Deepwater Ltd, which has been jointly owned by Frigstad Offshore Group and CIMC since 2012, has two 7th generation ultra deepwater drilling units of the Frigstad D90 design under construction at the Yantai CIMC Raffles shipyard in Shandong, China. The units, Frigstad Shekou and Frigstad Kristiansand, are scheduled for delivery in 1Q 2017 and 3Q 2017, respectively.
As a consequence of Frigstad Offshore’s exit, Frigstad Deepwater will become a wholly owned subsidiary of CIMC and be renamed “CIMC Bluewhale Rig Ltd”. The operational management of the rigs will be taken over by Bluewhale Offshore Pte Ltd, also a subsidiary of CIMC, and the rigs will be renamed Bluewhale I and Bluewhale II. A team from Frigstad Offshore, the current manager of the rigs, will continue to supervise the construction of the two rigs until completion, the company said.
Harald Frigstad, Chairman and founder of the Frigstad Group, says in a comment: “The ultra deepwater market has been extremely challenging for a while and we have agreed with CIMC that it is in the best interests of both parties that our group exit from the investment in Frigstad Deepwater Ltd at this moment. We are doing this on friendly terms and will remain a close partner of CIMC also in the future. Our exit from Frigstad Deepwater Ltd gives us a good foundation to position the Frigstad Group for the industry recovery which we believe will come.
“As part of this, we are reorganizing the group and strengthening the organization in key areas, which includes expansion at our office in Kristiansand, Norway. We are investing heavily in research and development, and will be launching the next generation of our ultra deep‐water semi‐submersible rig design in 2017 to keep up with industry requirements for new technology and higher efficiency. We strongly believe that offshore oil and gas will still play a very important role in the global energy supply for a long time, and we will be a part of this promising industry in the years to come, both as rig designer and drilling contractor.”