Sembcorp Marine bags $384 million contract to build two jack-up rigs

Sembcorp Marine's subsidiary Jurong Shipyard (JSPL) said it secured orders of $384 million for two turnkey jack-up rigs with options for another four jack-up rigs from Seadrill.

In a statement, Sembcorp said the total estimated value of the six jack-up rigs, including the four jack-up rig options is expected to surpass the $1 billion mark. This contract with Seadrill will be the largest order of rigs to-date, reflecting the growing market segment for quality premium high specification jack-up rigs.

Scheduled for delivery in the fourth quarter of 2012 and the first quarter of 2013 respectively, the jack-up rigs represent the latest generation, high specification jack-up drilling rigs with greater capacities and capabilities than current conventional units.

These rigs will be built based on the Friede & Goldman JU2000E design and are suitable for operations world-wide, including the southern North Sea. On completion, these new rigs will be capable of operating in waters of 400 feet and drill to depths of 30,000 feet. They will offer improved drilling efficiencies with off-line pipe handling, simultaneous operations support and are equipped with increased accommodation capacity.

Mr Don Lee, Senior General Manager, JSPL’s Offshore Division said "We are pleased that Seadrill has again chosen to partner Jurong Shipyard in their fleet expansion strategy to be the world’s largest operator of modern high specifications rigs. These jack-up rigs will be the 6th and 7th rig orders that Seadrill has placed with JSPL, two of which are currently under construction in the shipyard.”

Mr Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS, said “We have selected Jurong Shipyard as a partner yard based on its proven track record and project execution capabilities. Jurong Shipyard has set many ‘first successes’ with Seadrill and we are confident that it will continue to perform. The newbuild rigs will further strengthen Seadrill’s status as a leading operator of modern, high quality premium drilling rigs. These orders will position us for additional growth in an increasingly important market segment that can provide further opportunities and earnings growth for Seadrill.”

The contract is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of Sembcorp Marine for the year ending December 31, 2010.