Maersk Drilling orders new ultra harsh jack-up backed by BP contract
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 Company said in a press release.
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.
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.
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.
Maersk Drilling has an ambition of becoming a significant and stable contributor to the A.P. Moller - Maersk Group with a profit (NOPAT) of USD 1bn by 2018, while conducting incident free operations. Maersk Drilling provides high-efficiency drilling services to oil companies around the world. In addition to the four drillships and four jack-up rigs in order, the modern fleet counts 16 drilling rigs including deepwater semi-submersibles and high-end jack-up rigs. Maersk Drilling was established in 1972 and employs an international staff of 3,600 people.