Keppel O&M Secures Two More Charters for Legacy Rig Fleet

Singaporean rigbuilder Keppel O&M has secured charter contracts two more of its legacy rigs.

The latest contracts were awarded by ADES Saudi Limited Company for the barefoot charter of two jack-up rigs to be deployed in Saudi Arabia for a period of five years. The contracts are valued at around $112 million combined, which includes modification work to prepare the rigs for deployment some time in the first half of 2023. This brings the number of rigs on charter with ADES to four.

Legacy rigs refer to those ordered and built by Keppel but either abandoned or repossessed as a result of the prolonged offshore oil gas downturn beginning in 2015.

Keppel says the latest contracts mark the fifth and sixth bareboat charters secured by Keppel O&M this year.

The two rigs chartered are the KFELS B class Cantarell III and Cantarell IV jackup rigs, which were previously under bareboat charters with subsidiaries of Mexican-based Grupo R. The two rigs were delivered to Grupo R in 2019 as part of a sale and leaseback agreement which the company later defaulted on.

The rigs, which are currently in Mexico, will be renamed ADM685 and ADM686 and transported to Saudi Arabia for modification work before commencing their charters for ADES.

Mr Tan Leong Peng, Managing Director (New Builds) of Keppel O&M, said, “We are pleased to receive a repeat contract from ADES for the charter of another two of our jackup rigs. These high performance rigs have been operating successfully in Mexico and can be easily mobilsed to work in Saudi Arabia.

“All of our KFELS B Class legacy jackup rigs have secured bareboat charters or are on contract, which reflects the value our rigs bring to rig operators and increases their marketability for sale to potential buyers and investors. Utilization rates across both the jackup and floater segments have continued to trend upwards and we are confident our versatile and robust legacy rigs will be in demand across a variety of markets,” he added.

Rigs in Keppel’s legacy fleet are owned by a separate entity called Asset Co, which will be majority-owned by external investors on legal completion of Keppel’s proposed combination with Sembcorp Marine.

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