United Arab Emirates based Lamprell is among the first yard operators benefiting from a turnaround in the newbuild jack up segment after the Macondo drilling incident.
Mr Nigel McCue CEOc of Lamprell said that newbuild jack up enquiries mostly came from the national oil companies during the H1 of this year. In May, Lamprell was awarded a contract from Abu Dhabi based National Drilling Company for two Le Tourneau Super 116E jack up drilling units each valued at around USD 160 million. The deal carries options for two further newbuild rigs at the same price.
The UAE yard group is geographically well placed to capture other orders from Middle Eastern national oil companies or NOC linked outfits looking to make the most of lower yard construction costs to build their fleets and help militate against higher rig charter day rates in the next upswing.
Mr McCue said that Saudi Aramco is said to be prepared to build up to 5 more jack ups after signing on a new build order for a single unit with KeppelFels earlier this year. However, the market has made a surprising turn and Lamprell is now seeing a huge interest from the international rig community fuelled by improved dayrates for premium jack up rigs.
Day rates for jack up rigs jumped to USD 140,000 per day to USD 150,000 per day an industry player has said in a September interview with Upstream, USD 40,000 higher than 12 months ago.
Lamprell has finalized a USD 210 million contracts with Moscow based Eurasia Drilling for the construction of a LeTourneau Super 116E jack up rig. The price falls outside the USD 160 million to USD 190 million range recently transacted for new build jack up rigs but is said to also include costs to transport the components for reassembly at a yard in the Caspian region.
However, Mr McCue also conceded rig contracts are moving towards a 20:80 payment structure as financing remains a challenge amid a slow recovery in debt and equity markets. He said that the difficulty in raising project financing also translates to less interest from short term speculators but more enquiries flowing in from drilling contractors.
Mr McCue said that as of August, Lamprell has USD 320 million in the bid pipeline for newbuild jack up rigs but the figure is expected to be significantly higher with the recent surge in rig building interest.
The National Drilling Company and Eurasia jack ups are expected to be built at Lamprell's 250 square meters new yard at the Hamriyah Free Zone. He expects the Hamriyah yard to be ready to take on refurbishment and construction of semi submersible rigs and refurbishment of drill ships from next year.
(Sourced from Upstream Online)
