Maersk Drilling orders new ultra-harsh jackup rig backed by BP contract
COPENHAGEN -- Maersk Drilling has ordered a new ultra-harsh environment jackup 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 total project cost for the rig is $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 $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.
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 of $1bn by 2018.
The new rig is of the same class as the three ultra-harsh jackup 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 jackup rigs are based on the design of the Mærsk Innovator and the Mærsk Inspirer, the world’s largest and most advanced jackup 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.