A flurry of contract activities kept Sembcorp Marine (Sembmarine) busy over the last quarter of 2017, amid a lackluster global offshore market.
In December 2017 alone, Sembmarine inked a sale agreement, confirmed a contract and penned a letter of intent. Sembmarine’s wholly owned Jurong Shipyard signed an agreement to sell the semi-submersible rig West Rigel to a buyer for US$500M. The rig was originally contracted by North Atlantic Drilling and Seadrill, but both companies have applied for restructuring in the US.
In early December, Sembmarine subsidiary Sembcorp Marine Rigs & Floaters secured a US$490M contract from Statoil Petroleum on a turnkey engineering, procurement and construction (EPC) of a newbuild FPSO’s hull and living quarters. The contract follows the signing of a letter of intent between the two parties in November 2017.
Sembmarine has scheduled the EPC work to be completed in Q1 2020.
The FPSO will be deployed at the Johan Castberg field development in the Barents Sea, Norway. The vessel will be self-contained for harsh-environment operation, with living quarters accommodating up to 140 personnel.
Sembcorp Marine Rigs & Floaters has also signed a letter of intent with Shell Offshore Inc for the construction of the hull and topside as well as the integration of a Vito floating production unit (FPU). The Vito FPU is designed with a throughput capacity of 100,000 bpd of oil and 100 mmscfd of gas.
The bumper deal for Sembmarine, though, is an agreement sealed in October 2017 with Borr Drilling to sell nine Pacific Class 400 jack-up drilling rigs for approximately US$1.3Bn. The nine rigs sold include all six rigs from contracts that Sembmarine’s PPL Shipyard had earlier terminated with its original customers, and three rigs currently under various stages of construction completion.
Sembmarine noted that global exploration and production spending is showing signs of improvement. The recent stabilisation of drilling rigs day rates and utilisation levels, coupled with increased activities in secondary rigs sales, indicate the commencement of recovery in the drilling segment, it added.