Seatrium has signed a contract for the construction of four offshore drilling rigs owned by RigCo, a subsidiary of Keppel, worth over 500 million Singapore dollars (390 million US dollars). This contract aims to complete a group of semi-finished drilling rigs amid improving demand for high-specification drilling units.
Contract Details and Types of Rigs
This agreement includes a seventh-generation drilling rig, a jack-up rig for harsh conditions, and two semi-submersible rigs designed for challenging operational conditions in Northwest Europe. The drilling rig is scheduled for delivery in 2027, and the jack-up rig will be ready for operation in 2028. The construction plan for the two semi-submersible rigs is still under evaluation, and the related work falls under the existing master service agreement between the two Singaporean companies.
Financial Resources and Future Outlook
RigCo will finance the construction using existing cash reserves, and the completed rigs will be prepared for leasing opportunities and transfer to the Keppel Offshore fund. Cindy Lim, Keppel's Infrastructure Director, has stated that demand for deep-water and harsh-condition drilling rigs is expected to increase in the coming years, creating favorable conditions for long-term leases of quality rigs.
This move is part of Keppel's 3.7 billion Singapore dollar (2.89 billion US dollars) plan announced in July, aimed at monetizing up to 10 old offshore rigs through a fund managed by the group and backed by major investor Apollo. Under this agreement, six operational jack-up rigs are planned for transfer to the fund, and four semi-finished rigs can also be added after completion.
Investors associated with Apollo have committed 1.5 billion dollars to the fund, and Keppel estimates that the transfer of four additional rigs could generate approximately 1.3 billion Singapore dollars (1 billion US dollars) in cash proceeds. Keppel has retained these rigs as old assets following the merger of its marine and offshore business with Sembcorp Marine to form Seatrium in 2023.
