China’s Honghua Offshore has received a Letter of Award from Orion Engineering and Management Limited (“Orion”), for the construction of one semi-submersible drilling rig.
Orion plans to buy the rig for a total consideration of approximately US$320 million, excluding owner-furnished equipment.
According to the LOA, the Sales and Purchase Agreement (the “Agreement”) is expected to be executed within 60 days. At the same time, Orion has the option to purchase an additional 3 units of the same specification from Honghua Offshore under the same conditions at six-month intervals.
The rig and Option Units under the LOA will be equipped with Honghua Offshore’s in-house design and manufacture drilling package.
Meanwhile, Orion will contract a subsidiary of Opus Offshore Ltd. (“Opus Offshore”) to supervise the construction of the rig.
Zhang Mi, Chairman of Honghua commented, “We have always been emphasizing that Honghua must be innovative and develop its self-developed core equipment in offshore engineering sector. Signing the LOA symbolised that the Company has started a new chapter of its manufacturing business, and entered the offshore drilling equipment market.
“We believe that it demonstrates client and the market’s recognition on the Company’s equipment design and construction capability. Meanwhile, the construction of a series of semi-submersible drilling rigs will capitalize on the strengths of the extraordinary capability of Honghai Crane to fully achieve the innovative concept of ‘onshore manufacturing of offshore equipment’, thus reducing construction cost and production cycle time.
“The Company will continue to develop the offshore engineering business, continuously deepen the global business distribution, to provide inexhaustible momentum for the sustaining and stable development of the Group’s business.”