Ocean Rig Pays Just $65 Million for Ultra Deepwater Drillship at Auction

Cerrado drillship. Photo: Schahin

In what could be considered the deal of the century, international offshore drilling contractor Ocean Rig has purchased an advanced ultra deepwater drillship at auction for just $65 million in cash.

Ocean Rig on Monday announced the acquisition of the drillship Cerrado, a sixth generation drillhip built by Samsung Heavy Industries in 2011. The design of the drillship is similar to Ocean Rig’s four existing sixth generation drillships, which were first ordered in June 2008 by DryShips, then majority owner of Ocean Rig, at Samsung Heavy Industries for about $800 million apiece when the price of crude was hovering around $140 per barrel.

The Cerrado drillship bought at auction was previously operated by a unit of the Brazilian firm Schahin Group, which in April 2015 filed for bankruptcy after racking up billions of dollars in debt. Schahin financers likely paid somewhere in the range of $600 to $700 million for the drillship when it was first ordered.

While it’s hard not to be impressed what an amazing deal Ocean Rig landed, it just goes to perilous state of the offshore drilling industry.

Ocean Rig says the transaction is still subject to judicial auction procedure, but upon delivery the rig will be renamed Ocean Rig Paros.

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