Keppel signs rig construction LOI worth US$ 4.12 billion

Keppel Corp, one of the worlds largest rig builders, has signed a letter of intent (LOI) for the construction of five semisubmersible rigs for Sete Brazil in a record-breaking deal worth US$ 4.12 billion. Sete Brazil had already made an order with Keppel for one semisubmersible rig in December of last year, worth US$ 809 million.

The rigs are due to be built in Keppel’s Brazilian yard and will be designed to operate in water depths of up to 3000 m and with a maximum drilling depth of 10 000 m – there are, at present, no delivery dates for this latest order.

This latest deal is part of a trend towards increasingly large investments in E&P operations offshore Brazil. Sete Brazil has outlined plans to spend US$ 27 billion on drilling units by the end of this decade. The Brazilian state player, Petrobras announced last year that it had was aiming to invest approximately US$ 224.7 billion over the coming four to five years as part of its project to access up to 50 billion bbls of oil situated in the Atlantic ocean.

A spokesman for Keppel stated that, “With six order, the yard in brazil will be busy, but we are looking at expanding.” The company’s order book currently stands at US$ 9.4 billion, with other contracts from companies such as Perforadora Central pushing delivery dates well into 2015.

However, the increased demand for new rigs is not a phenomenon connected solely to Brazil. High oil prices have given oil and gas companies an incentive to invest in E&P activities around the world, resulting in the purchase of additional equipment.

Edited from various sources by David Bizley

Read the article online at: https://www.oilfieldtechnology.com/exploration/16042012/keppel_signs_loi_worth_usd4billion/