Maersk Drilling Orders New Jack-Up Rig in South Korea

Maersk Drilling has ordered a new ultra harsh environment jack-up rig, XL Enhanced 4, to be built at the Daewoo Shipbuilding and Marine Engineering (DSME) shipyard in South Korea.

The rig is scheduled for delivery in mid-2016. The total project cost for the rig is USD 650m including a turnkey contract with the yard, owner furnished equipment, project management and capitalised interest. The contract with DSME includes priced options for delivery of up to two additional units with delivery in 2016/2017.

The rig order is backed by a 5-year contract with BP Norway for plug and abandonment work on the Valhall field in the Norwegian North Sea. The estimated value of the contract with BP Norway for the firm 5-year period is USD 812m including mobilisation from South Korea to Norway, but excluding cost escalation. BP Norway has options to extend the contract up to a total duration of 10 years. The rig will have the capability to be electrically powered from shore via the Valhall complex, which has significant environmental benefits.

“We are very pleased with the contract award from BP Norway extending the strong global relationship we have with BP. With this latest contract we now have four rigs contracted to BP, two in Norway, one in Egypt and one in Azerbaijan in the Caspian Sea. Furthermore, this is our first rig order placed with DSME – a top quality yard having solid experience with construction of offshore rigs, and we look forward to take delivery of the rig in 2016,” says Claus V. Hemmingsen, CEO of Maersk Drilling and member of the Executive Board of the A.P. Moller – Maersk Group.

The order is in line with Maersk Drilling’s strategy of growing its business within the ultra harsh environment market segment and will contribute to the achievement of Maersk Drilling’s financial target of delivering a profit (NOPAT) of USD 1bn by 2018.

“Norway is a strategic focus area for Maersk Drilling, and this latest contract further solidifies our market leading position in the Norwegian jack-up market. Opportunities continue to emerge in the Norwegian market and we will continue to evaluate opportunities for further growth in this market,” says Claus V. Hemmingsen.

Facts about the new ultra harsh environment jack-up rig

The new rig is of the same class as the three ultra harsh jack-up rigs, XL Enhanced 1-3, ordered in February 2011 and May 2012 currently under construction at Keppel FELS in Singapore. The four XL Enhanced ultra harsh environment jack-up rigs are based on the design of the Mærsk Innovator and the Mærsk Inspirer, the world’s largest and most advanced jack-up drilling rigs. The four rigs will be delivered from the yards in 2014 to 2016 and have all secured long term contracts. The four rigs are designed to operate in the harsh environment found in the North Sea and comply with all rules and regulations in the strictly regulated Norwegian sector.

Press Release, September 25, 2013

 

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