Keppel delivers another jack-up rig to Mexican operator

Singapore’s offshore rig builder Keppel Offshore & Marine has delivered the KFELS B Class jack-up rig, Cantarell III, to Mexico’s Grupo R.

Cantarell III jack-up rig
Cantarell III jack-up rig; Source: Keppel

Announcing the delivery on Friday, Keppel said that, as part of the deal, Grupo R had entered into a sale and leaseback arrangement for the rig with a wholly-owned subsidiary of Keppel O&M.

Keppel O&M will purchase the rig from Grupo R for about $190m which is the balance contract value of the rig. Keppel O&M had received 20% down payment of the original contract value for Cantarell III when the contract was signed in 2013.

Cantarell III will be leased back to Grupo R on a bareboat charter at competitive dayrates over ten years, and will be deployed to work in offshore Mexico on a charter which will start in 1Q 2020.

Under the bareboat charter, Grupo R has the right to purchase the rig at pre-agreed prices during the term of the bareboat charter. After the fifth year, Keppel O&M may, at its discretion, put the rig to Grupo R at a pre-agreed price.

Tan Leong Peng, Executive Director (New Builds) of Keppel O&M, said, “We are pleased to enter into a mutually beneficial arrangement which will enable Grupo R to deploy another high-performance rig for its operations in Mexico. At the same time, Keppel O&M is acquiring another quality asset which will generate regular and healthy returns from its charter. As Mexico seeks to increase oil production, demand for jack-up rigs has been rising.

“Our first sale and leaseback arrangement with Grupo R on the Cantarell IV has worked well. Cantarell IV, which was warm stacked in our yard from 2016 to the start of 2019, was able to go directly to the field upon delivery and achieve 99% uptime in its operations.”

More than 10 KFELS B Class units have been delivered to Mexico. Designed to operate in water depths of up to 400 feet and drill to depths of 30,000 feet, Cantarell III is equipped with a fully-automated high capacity rack and pinion jacking system, Self-Positioning Fixation System, and also has accommodation for 150 persons.

Cantarell III is equipped with Keppel’s proprietary RigCare Solution – a suite of digital services to support the rig’s lifecycle needs. Together with the Cantarell IV jack-up rig, which was delivered by Keppel to Grupo R earlier this year, they are the industry’s first drilling rigs with Smart Notations, according to Keppel.

Cantarell IV has been performing in the Xikin field for Pemex.

Jose Ramiro Garza, CEO of Grupo R added, “We are confident of the long-term outlook of the Mexican rig market with Pemex and international oil companies looking for additional jack-up rigs to support the country’s target to increase Mexico’s oil and gas production.”

Besides Cantarell III and IV, Keppel FELS also delivered Cantarell I and Cantarell II to Grupo R in 2016, which have been working for Pemex in Mexico.

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