Singapore’s Keppel Corp could finally be poised to offload three much delayed jack-up drilling rig newbuildings.
Oslo-listed Borr Drilling, the company behind the original order, said it had signed a binding letter of intent with an unnamed buyer for the sale of the rigs.
The buyer has agreed to pay a total of $320m for the rigs which have been named as the Tivar, Huldra and Heidrun.
Borr Drilling said the funds would be used to pay the delivery instalments of the three rigs under construction at Keppel FELS.
The sale transaction is subject to customary closing conditions and procedures and is expected conclude within 30 days.
Borr Drilling said the rigs are expected to be employed by the prospective owner in a captive market and represent limited competition to its fleet.
After the deal is completed, Borr Drilling will still have two jack-up drilling rigs under construction at Keppel FELS.
However, the company said its ambition is to have all its rigs contracted by the end of 2022, benefiting from the fast-improving jack-up market.
In May, Keppel confirmed that it had secured bareboat charters for four legacy jack-up rig newbuildings in two separate deals worth a total of SGD 255m ($162.5m).
Two of the rigs will be bareboat chartered for five years to ADES Saudi Ltd for deployment in waters off Saudi Arabia.
The second pair of rigs have been fixed to an “established drilling company in the Middle East” for a period of three years, with options for a year’s extension.
“The multiple charter contracts that we have recently secured reflect the improving market sentiments,” said Keppel Offshore & Marine chief executive Chris Ong.
“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.”
Ownership of the legacy rigs is set to be transferred to a separate company as part of Keppel Corp’s recent deal to merge its O&M activities with those of Sembcorp Marine.
Keppel Corp will sell the legacy rigs and associated receivables for just over SGD 4bn to Asset Co which is jointly controlled Singapore-listed private equity fund company TIH Limited and Singapore sovereign wealth fund Temasek Holdings.
Keppel will hold a 10% equity interest in Asset Co and receive vendor notes and perpetual securities.
