Singapore’s Keppel Offshore & Marine has secured another set of multi-year contracts for two of its jack-up drilling rigs from its “legacy” fleet.

The legacy fleet comprises drilling rigs that were inherited by Keppel when their owners were unable to pay for them.

The 16 drilling rigs in the fleet consist of jack-ups, semi-submersibles and a drillship, all of which Keppel is trying to either sell or find bareboat charters for.

The legacy rigs are not a part of the merger agreement with Sembcorp Marine.

The latest agreement is for two KFels B Class rigs to be deployed in the Middle East.

The rigs will be chartered to an established drilling company in the Middle East for deployment in the fourth quarter this year for a period of three years, with options for a year’s extension.

Total revenue from the charters, including the options and modification works by Keppel O&M to prepare the rigs for on-site operations, is expected to be up to S$120 million.

These contracts come on the back of two bareboat charters by Keppel O&M revealed on 9 May 2022.

The two rigs to be used for these charters are from the terminated newbuild rig contracts with Clearwater Capital Partners and Fecon International that Keppel O&M announced on 13 April 2022.

Popular: the KFels B Class design jack-up drilling rig Photo: KEPPEL CORPORATION

Chris Ong, chief executive of Keppel O&M, said: “The multiple charter contracts that we have recently secured reflect the improving market sentiments, and attest to the value we are able to provide to rig operators with our proven KFels B Class rigs.

“With jack-up utilisation rates increasing, we are also seeing demand for rig charters and sales enquiries improve. Putting the legacy rigs to work will improve the overall marketability of these assets while reducing holding costs.

“As we secure more bareboat charter contracts, our legacy rigs will become increasingly valuable to both rig operators as well as potential investors.”

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