Saipem has exercised a purchase option for the seventh-generation ultra-deepwater drillship Santorini which is currently operating with the Italian giant on a long-term charter deal.

Saipem on Monday confirmed it has elected to exercise its purchase option for the drillship with South Korea’s Samsung Heavy Industries at a cost of $230 million.

“The Santorini, whose construction was completed in 2021, is a technologically advanced vessel, equipped with two seven-cavity blow out preventers, the highest standard for ultra-deepwater drillships and state-of-the-art operation automation systems,” Saipem noted.

The drillship is currently operating in the US Gulf of Mexico for Eni on a contract due to expire in the third quarter of 2023.

“After the Saipem 10000 and Saipem 12000, the fruitful collaboration with Samsung Heavy Industries is once again reaffirmed,” added Saipem.

Attractive returns

The Italian contractor said its investment decision for purchasing the Santorini “is based on an expected return on investment of more than 15%, with a payback period of five years estimated on the basis of the existing contract and the drillship’s commercial prospects”.

“The backlog of Saipem’s offshore drilling activity to date amounts to more than €1.5 billion ($1.483 billion), the highest value in the last six years,” the company said.

Saipem stated that the “significant growth of the deep-water market now offers interesting opportunities for the deployment of the fleet, both in markets where Saipem is traditionally present [such as Africa and the Mediterranean] and in segments where the supply of ultra-deepwater drilling rigs is already close to saturation [such as in the Gulf of Mexico]”.

Robust growth

The company added that dayrates for seventh-generation drillships continue to show a robust growth trend, with average market rates estimated at around $400,000 in 2022 and which are expected to grow to levels above $450,000 a day by 2025.

The seventh-generation drillship Santorini was originally ordered by ultra-deepwater drilling specialist Ocean Rig but it was cancelled in 2019 when Transocean acquired Ocean Rig.

Saipem signed a bareboat charter for the drillship with Samsung in 2021.

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