A view of a Keppel Corporation shipyard in Singapore January 19, 2016. REUTERS/Edgar Su

Keppel O&M Secures Charters for Two Additional ‘Legacy Rigs’

Mike Schuler
Total Views: 950
May 24, 2022

Singaporean rigbuilder Keppel Offshore & Marine has signed bareboat charter contracts for two more of its “legacy” jackup rigs, the latest sign of improving conditions in the offshore driling market.

The KFELS B Class rigs rigs will be chartered to “an established drilling company” in the Middle East beginning in the fourth quarter of this year for a period of three years, with options for one-year extension, Keppel said. Total revenue from the charters, including options and modification work to prepare the rigs for the work, is expected to be up to S$120 million (~US$87 million).

The contracts come on the back of previously announced bareboat charters for two additional “legacy” jack-up rigs announced by Keppel O&M earlier this month.

Legacy rigs are ones that were initially being built for other customers, but never delivered and therefore still owned by Keppel. The legacy rigs used in these charters were attached shipbuilder orders dating back to 2013 and 2014, which Keppel O&M terminated this past April due to its customers’ failure to take delivery and make final payments.

The company said the contracts reflect the growing demand for its high-quality jackup rigs amid improving conditions in the oil and gas market.

“We have built a strong track record and trust in the industry for delivering rigs that are robust, versatile and capable of working in a wide variety of geographies. The multiple charter contracts that we have recently secured reflect the improving market sentiments, and attest to the value we are able to provide to rig operators with our proven KFELS B Class rigs,” said Chris Ong, CEO of Keppel O&M.

“With jackup utilisation rates increasing, we are also seeing demand for rig charters and sales enquiries improve. Putting the legacy rigs to work will improve the overall marketability of these assets while reducing holding costs. As we secure more bareboat charter contracts, our legacy rigs will become increasingly valuable to both rig operators as well as potential investors,” Ong added.

Similar to the previous two rigs, these latest two rigs will be transferred to “Asset Co.”, a seperate independent company, ahead of Keppel O&M’s merger with Singaporean rival Sembcorp Marine.

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