Singapore-Based Shipbuilders Win Over $8 Billion in Drillship Orders from the Brazilians

Ocean Rig Poseidon, Photo courtesy of Statoil/Heine Melkevi

Singapore-based Sembcorp Marine announced today that they have secured contracts worth approximately USD $4 Billion from Sete Brasil ParticipacÇ’es S.A. (Sete Brasil), for the design and construction of five drillships based on Jurong Shipyard’s, Jurong Espadon drillship design.

This is the second $4 Billion order placed in as many days by Sete Brasil. Yesterday, they announced a similar contract with Keppel Offshore & Marine.

In addition to the order for 5 new drillships, Sembcorp Marine announced in early February that its wholly-owned Brazilian shipyard Estaleiro Jurong Aracruz Ltda, secured a US$792.5 million contract for the design and construction of a drillship with Guarapari Drilling B.V., Netherlands, a subsidiary of Sete Brasil.

All six drillships will be built based on the Jurong Espadon design, which represents the next generation of high-specification drillships with advanced capabilities for operational efficiency and ultra-deepwater operations worldwide. Each of the drillships will be equipped with state-of-the-art drilling facilities, a larger deck area, efficient deck arrangement and a large moon pool for enhanced drilling operations as well as DP-3 (Dynamic Positioning Class 3) capabilities and superior motion. The drillship will be capable of operating at 10,000 ft water depth and drilling to depths of 40,000 ft, with accommodation facilities for a crew of 180 personnel.

Scheduled for deliveries between 2Q 2015 to 2Q 2019, the six drillships will be among the first in a series of drillships to be built in Brazil to cater to the oil and gas discoveries in the offshore giant pre-salt fields of the Santos Basin. On delivery, the six drillships will be chartered to Petrobras for 15 years. Three of the drillships will be operated by Odfjell and the other three by Seadrill.

Mr Jose Carlos Ferraz, Chief Executive Officer of Sete Brasil said “We are pleased to sign the contracts for the design and construction of the five additional drillships with the Sembcorp Marine Group. With their established track record working in Brazil, we are confident that the high-specification drillships will be delivered on time and on quality. We are counting on Jurong Shipyard to be a vital partner in making the drillship program a success for our company and our country.”

Barring unforeseen circumstances, Sembcorp Marine expects a positive contribution to its earnings from the contracts. However, the contracts are not expected to have any material impact on the consolidated net tangible assets per share of Sembcorp Marine for the year ending December 31, 2012.

Estaleiro Jurong Aracruz Ltda, Sembcorp Marine’s first overseas Integrated New Yard Facility, is strategically located in the municipal of Aracruz in the state of Espirito Santo, Brazil. The wholly-owned locally incorporated 82.5-hectare new Brazilian shipyard, which broke ground in December 2011, is scheduled for full completion at end 2014. Planned shipyard facilities include a 380m x 120m drydock, a 1km berthing quay as well as ancillary piping facilities and steel fabrication workshops. On completion, Estaleiro Jurong Aracruz will have capabilities to undertake the construction of drillships, semi-submersible and jack-up rigs, platforms and supply vessels as well as FPSO integration and topside modules fabrication, in addition to traditional services in drilling rig repairs, ship repairs and modification and upgrade works.