Keppel O&M to commence charters for four rig assets in Saudi Arabia

KEPPEL Offshore & Marine (O&M) has completed the modification works on four KFELS B Class jackup rigs, which will be deployed on bareboat charters in Saudi Arabia in October, Keppel Corp announced on Friday (Oct 14).

In a bourse filing, the company said the rigs will be chartered in pairs to Arabian Drilling Company (ADC) and ADES Saudi Limited Company respectively, and will yield total charter revenue of about S$250 million over three to five years.

ADC’s rigs were handed over to the company on Oct 13 and will be deployed for three years in Saudi Arabia to work for Saudi Aramco, the country’s national oil company, with an option for a year’s extension.

The two rigs deployed to ADES will similarly be deployed for Saudi Aramco for five years.

All four rigs are capable of operating in water depths of 400 feet and drill to a depth of 30,000 feet.

“As utilisation and day rates continue to rise, we are seeing demand for modern, high-specification jackup rigs grow,” managing director of new builds for Keppel O&M Tan Leong Peng said, adding that all of the company’s legacy KFELS B Class rigs have been contracted.

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Notably, the four rigs and their bareboat charter agreements form part of Keppel O&M’s legacy rigs and will be transferred to Asset Co, which is majority-owned by external investors, upon the completion of the proposed merger between Keppel O&M and Sembcorp Marine.

Keppel shares closed 1.2 per cent or S$0.08 lower at S$6.68 on Friday, before the announcement was made.