Keppel Offshore & Marine (Keppel O&M), the wholly-owned subsidiary of Keppel Corporation, has completed the modification works for four KFELSB Class jackup rigs on Oct 14.
The rigs, which will be deployed on bareboat charters in Saudi Arabia this month, are being chartered in pairs to Arabian Drilling Company (ADC) and ADES Saudi Limited Company (ADES) respectively. They are expected generate a total charter revenue of about $250 million over three to five years.
The four rigs and their bareboat charter agreements are part of Keppel O&M’s legacy rigs. They will be transferred to Asset Co upon the completion of the proposed merger between Keppel O&M and Sembcorp Marine (SembMarine).
The rigs that were chartered to chartered to ADC, ARABDRILL110 and ARABDRILL 120 were handed over on Oct 13. They are on bareboat charter contracts for three years with options for a year’s extension and will be deployed in Saudi Arabia to work for Saudi Aramco, the country’s national oil company.
“We are pleased that four of our rig assets are being put to productive work and will soon generate recurring income as they embark on their charter contracts with our valued customers ADC and ADES. The project teams at Keppel O&M have worked hard to expedite the rigs’ modification works, enabling these assets to start their charters on schedule in Saudi Arabia,” says Tan Leong Peng, managing director (new builds) of Keppel O&M.
“As utilisation and day rates continue to rise, we are seeing demand for modern, high specification jackup rigs grow. Riding on this growing demand, all our legacy KFELS B Class rigs have been contracted. Operationally ready rigs with good track records and stable cash flows are attractive assets that will enjoy a strong advantage with operators and investors. We are confident that our customers will appreciate the strong value proposition that Keppel’s high quality and cost-effective rig assets provide,” he adds.
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Shares in Keppel closed 8 cents lower or 1.18% down at $6.68 on Oct 14.
