THE wholly-owned subsidiaries of Keppel Offshore & Marine (Keppel O&M) have inked agreements for the utilisation of 2 jackup rigs to be deployed in Saudi Arabia.

These bareboat contracts are expected to generate about S$135 million in revenue for Keppel O&M, including modification works to prepare them for deployment, said Keppel Corp in a press statement on Monday (May 9) evening.

ADES Saudi Limited Company will charter the 2 rigs for 5 years, starting in Q4 2022.

Keppel O&M chief executive Chris Ong noted improving conditions in the oil and gas market, and said these charters “attest to the good demand for Keppel O&M’s proven state-of-the-art KFELS B Class rig in markets such as the Middle East”.

He added that the company continues to see strong demand for its rigs, and is actively pursuing more charters and sales opportunities.

“Our early success at securing new bareboat charters will not only enable us to start generating revenue and cash flows from the legacy assets, but also improve the overall marketability of our rigs as we build up their operational track records,” Ong said.

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On Apr 13, Keppel O&M announced the termination of newbuild rig contracts with certain customers. In turn, these will be used to fulfil the latest bareboat charter contracts.

The 2 rigs and their bareboat charter agreements are part of the company’s legacy rigs. They will be transferred to a separate Asset Co that is majority-owned by external investors upon the legal completion of the proposed combination of Keppel O&M and Sembcorp Marine.

Shares of Keppel Corp closed at S$6.69 on Monday, up S$0.10 or 1.5 per cent, before the latest filing was made.