Malaysia’s UMW Oil & Gas has placed an order for two new jack-up drilling rigs, hoping to benefit from the high demand for such units in the region.
The company has ordered the rigs from Tianjin Haiheng Shipbuilding & Offshore Engineering Service Co. The acquisition price has been set at $434 million, or USD 217 million each. The rigs will be built by China Merchants Industry Holdings Co., Ltd.
In a filing to the Bursa Malaysia, UMW said that the deal is in line with the company’s plan to enhance the asset fleet for expansion in Malaysia and Asia Pacific region as well as to improve financial performance over the coming years.
The company said it expects high demand for jack-up rigs in Malaysia and Asia-Pacific region in the coming years.
“This is due to an increase in activities and spending for Exploration and Production (“E&P”) in the region in 2014, with forecast increase of 6% worldwide and 3% in Asia-Pacific as reported by Barclays Research,” UMW said.
UMWOG currently has four drilling rigs in operations, namely NAGA 1, NAGA 2, NAGA 3 and UMW NAGA 4 with one more premium jack-up rig to be delivered in May 2014.